Keep pulling the thread on Rob Arnott.
A backtest of the Research Affiliates Growth Index methodology showed it would have outperformed the Russell Growth index by 4.5% per year over the last 30 years.
In less than a year of live tracking since March of the previous year, the Research Affiliates Growth Index has outperformed the Russell Growth index by 13 percentage points.
NVIDIA's growth in sales or profits has accounted for 10% of the total aggregate growth for the entire US economy.
The original Research Affiliates Fundamental Index (RAFI) has delivered 2% to 2.5% of annual value-add in live performance over the past 20 years.
Market cap-weighted indexes like the S&P 500 are leading to increased market concentration in a small number of stocks, including the MAG7.
Research Affiliates has developed the Research Affiliates Growth Index, which is different from both cap-weighted and equal-weight ETFs.
The Research Affiliates Growth Index is not yet available as an investable product.
The Research Affiliates Growth Index selects companies based on an average of their growth rates in sales, profits, and R&D spending.
To be included in the Research Affiliates Growth Index, a company's growth rate must be in the top 25% of the market.
Amazon is not included in the Research Affiliates Growth Index because its growth rate is not fast enough to meet the inclusion criteria.
Microsoft is not included in the Research Affiliates Growth Index because its growth rate is not fast enough to meet the inclusion criteria.
NVIDIA is one of the largest holdings in the Research Affiliates Growth Index, with a weight of slightly over 10%.