Rob Arnott

Rob Arnott is the founder and chairman of Research Affiliates, which pioneered "fundamental indexation" — a method of constructing equity indexes based on fundamental measures of company size (sales, book value, dividends, cash flow) rather than market capitalization. This approach was commercialized through the RAFI (Research Affiliates Fundamental Index) family of indexes. Arnott argued that market-cap-weighted indexes systematically overweight overvalued companies and underweight undervalued ones, creating a "return drag" compared to fundamentally-weighted alternatives. The RAFI methodology became foundational for the smart beta ETF movement and influenced trillions of dollars in index product development. He is also known for research on expected returns, valuation, and asset allocation.