FTSE RAFI Index Series exceeds US$5bn in ETF-linked AUM

12 June 2013

  • Leading global alternative indices hit milestone AUM
  • Index series breaks link between price and weight
  • Successful 8 year partnership between FTSE and Research Affiliates

FTSE Group (“FTSE”), the global index provider, is pleased to announce that the ETF assets linked to the FTSE RAFI® Index Series reached US$US5 billion in assets under management, as of 31 May 2013. In total, more than US$176 billion of ETF assets are benchmarked to FTSE indices worldwide.

Launched in 2005, the FTSE RAFI Index Series was one of the first index series to break the relationship between (float adjusted) market capitalisation and index weight. The FTSE RAFI methodology selects and weights index constituents according to fundamental measures of company size, namely: total cash dividends, free cash flow, total sales and book equity value. Since launch, the index series has expanded to include a wide range of global, regional and single country indices and has been adopted worldwide as a foundation for the creation of exchange traded products, and as an investable strategy index for institutional mandates. Total assets linked to the FTSE RAFI Index series including ETFs, mutual funds and institutional mandates globally exceed US$30 billion as of 31 May 2013.

ETFs tracking FTSE RAFI indices trade on 9 exchanges across North America, Europe and Asia.

Jonathan Horton, President of FTSE Americas and Head of FTSE’s ETP Service Unit, said: FTSE was an early pioneer of alternative weighted indices and we continue to lead the market with the longest live track record and widest product range of any index provider. This important milestone underscores our position as the leading provider of innovative tradable index concepts, as well as highlighting increasing investor interest in accessing new forms of passive exposure. We look forward to working with Research Affiliates to build further on this success.”

Michael Larsen, Director, Global Head of Affiliate Relations for Research Affiliates, said: “Investors around the world are increasingly turning to Smart Beta solutions, such as the FTSE RAFI Index Series, as a way to capture potential outperformance while retaining the benefits of traditional market-cap weighted indices - transparency, broad economic representation, and liquidity at a relatively low cost. As the industry leader in developing Smart Beta solutions, we are pleased with the success of the FTSE RAFI Index Series and in our partnership with FTSE.”

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