Published on: November 16th, 2021 • Duration: 57 minutes
In this episode of Real Visionaries, guest host Jim Bianco sits down with Rob Arnott, the “Godfather of Smart Beta," to discuss the impact of narratives on the market and analyze growth vs. value
stocks. Arnott explains that value’s poor performance can potentially be attributed to the Fed’s accommodation and the widely accepted narrative that tech companies will dominate the world. “Of course, they're brilliant disruptors. But disruptors get disrupted, and people forget that. The big issue and the really interesting part is that value relative to growth has gotten cheaper and cheaper and cheaper, by any measure price to book price to sales, price earnings, you name it, and has gotten cheaper by a wider margin than its underperformance,” says Arnott. With a natural pull towards research, Rob Arnott shares that he has always been curious and had a strong desire to question commonly held ideas and test theories. Following his passion in 2002, Arnott started Research Affiliates, the $180 billion asset management company that he jokingly states doesn’t manage assets but instead acts as an extension to other companies’ R & D capabilities. Research Affiliates is currently offering a complimentary Asset Allocation Interactive web tool that analyzes current relative valuation and allows investors to create model portfolios that will help estimate potential portfolio returns. The tool may be accessed at https://interactive.researchaffiliates.com/smart-beta#!/strategies.