VettaFi announced that it has signed a definitive agreement to acquire RAFI Indices, a pioneer in fundamental indexing, expanding its suite of index solutions and strengthening its capabilities in smart beta investing.
The acquisition combines RAFI Indices’ research and intellectual property with VettaFi’s Index Factory technology platform and distribution network. Upon completion of the transaction, VettaFi’s asset base is expected to exceed $260 billion.
RAFI Indices powers several widely used smart beta exchange-traded funds, including the Schwab Fundamental U.S. Large Company Index ETF (NYSEARCA: FNDX), which manages approximately $25 billion in assets, and the Invesco RAFI 1000 ETF (NYSEARCA: PRF), which oversees about $10 billion.
Founded by Research Affiliates, RAFI developed an indexing methodology that weights companies using fundamental measures rather than market capitalization. The approach helped establish the foundation for the smart beta category and broadened the range of index-based investment strategies available to asset managers and investors.
Following the acquisition, VettaFi plans to integrate RAFI’s institutional research capabilities with its technology infrastructure to deliver additional data-driven investment products. The transaction is expected to close in the coming weeks, subject to customary closing conditions.
VettaFi is a wholly owned subsidiary of TMX Group and provides indexing, analytics, and digital distribution solutions to the asset management industry.
KEY QUOTES:
“RAFI Indices has long set the gold standard for fundamental indexing. By integrating RAFI’s deep, institutional-grade research with our modern technology infrastructure, we are uniquely positioned to deliver an even broader suite of innovative, data-driven investment solutions. We are excited to welcome the brilliant minds of the RAFI team into the VettaFi family as we continue to build what’s next in index ETFs, together.”
Tom Hendrickson, President of VettaFi
“Today we begin an exciting new chapter in the RAFI story. Our simple idea of creating an index strategy that selects and weights using fundamental measures of size, rather than price or market value, advanced the state of the art for equity investing. With TMX VettaFiʼs resources and our shared vision, they will be properly equipped to take RAFI, and our newer strategies in cap-weighted core and growth investing, to new levels of global success.”
Rob Arnott, Founding Partner and Board Chair of Research Affiliates
