A Slow Evolution in Indexing for Sovereign Debt ETFs
Tom Lydon submits:
A prominent figure in the exchange traded fund world describes a RAFI fundamental index evolution, which will help achieve greater returns at lower risks. However, there is a caveat. ETF traders will have to see this slow change over the next 10 years.
Olivier Ludwig for IndexUniverse asked Rob Arnott, founder of Research Affiliates and the Father of Fundamental Indexing, about his thoughts on the future of ETFs. Arnott sees that indexes in the bond ETF market will start to shift more toward weighting bonds according to an issuer’s capacity to service debt instead of the current weighting to the size of the issuer’s debt.
