FTSE Rafi smart beta indices launched

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Index provider FTSE Russell and smart beta strategy provider Research Affiliates LLC have launched a new series of smart beta indices, the FTSE RAFI Equity Income Index Series.

The benchmark indices will track high dividend-paying stocks which are screened to target sustainable income. They are weighted according to fundamental measures, as opposed to market capitalisation.

Source will be the first ETF provider to license the index series, and a family of ETFs linked to the benchmarks is set to be launched by Source later this year in Europe.

The FTSE RAFI Equity Income Index Series builds on the existing smart beta partnership between FTSE Russell and Research Affiliates, which dates back to 2005.

Jason Hsu, co-founder and vice chairman at Research Affiliates, said: “For a good number of investors, accessing sustainable, high income remains an unmet need. Yields in fixed income remain historically low, while within the equity space, existing high dividend strategies tend to tilt toward low growth sectors or poor quality stocks. To address this gap in the market, Research Affiliates and FTSE Russell are introducing these new smart beta indexes, which we built in close collaboration with Source.

As of 31 March 2015, investable products linked to indexes developed by FTSE Russell and Research Affiliates have approximately $75bn (€69.7bn) of AUM.

Mona Dohle
Mona Dohle speaks German and Dutch, she is DACH & Benelux Correspondent for InvestmentEurope. Prior to that, she worked as a journalist in Egypt and Palestine. She started her career as a journalist working for a local German newspaper. Mona graduated with an MSc in Development Studies from SOAS and has completed the CISI Certificate in International Wealth and Investment Management.

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