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For every stock that enters an index such as the S&P 500 or Russell 1000, another must exit the stage. You might assume these "deletions" are a sorrowful bunch whose demotion to the B-team means they're no longer worthy of your portfolio. Yet Rob Arnott, founder of Research Affiliates and a longtime champion of "smart beta," discovered that many of these rejects tend to perform better after being dropped from the indexes. On this episode of Trillions, Eric Balchunas and Joel Weber speak with Arnott about his new ETF, $NIXT, which holds dozens of such stocks with equal-weighting. They discuss how the ETF — Arnott's first launch — complements an investor's portfolio, what's behind the performance, how the portfolio rebalances and why smart beta has endured. See omnystudio.com/listener for privacy information. |