Markets can be beaten, argue active fund managers. Passive managers take the stance that index-linked returns are safer. Addressing this polarisation, Robert Arnott, founder of US-based Research Affiliates, has developed an index based on determinants of a share's value - the Research Affiliates Fundamental index (RAFI), which it uses to manage US$60bn of assets in 35 countries.
RAFI is used in a number of funds in SA, including two unit trusts the Old Mutual RAFI 40 Tracker Fund (OMR40) managed by Dibanisa Fund Managers, and Plexus Asset Management's Plexus RAFI Enhanced SA Strategy Fund.
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