.jpg)
FTSE Group (FTSE), the global index provider, and Research Affiliates, the creator of RAFI™ (Research Affiliates Fundamental Index), today announce that they have issued a license to Charles Schwab Investment Management, Inc. to be the exclusive provider of non-ETF equity mutual funds in the US based on the award winning FTSE RAFI™ Index Series.
Fundamental indexing offsets the risks of overexposure to inflated or understated stock valuations inherent in market capitalization weighting, improving the potential for higher investment returns and lower volatility. Unlike traditional market capitalization-weighted indexes, the FTSE RAFI™ Index Series selects and weights stocks based on four fundamental financial measures that better reflect underlying company strengths and potential for future performance: sales, cash flow, book value and dividends. The FTSE RAFI Index Series was awarded the William F. Sharpe Indexing Achievement Award in 2005 for “The Most Innovative Benchmark.”
Total returns for the FTSE RAFI™ Index Series -- the FTSE RAFI™ Global ex US 1000, FTSE RAFI™ US 1000, and the FTSE RAFI™ US Mid Small 1500 indexes – show significant outperformance of their US peer indexes for 12 month, 3-, 5- and 10-year timeframes:
|
YTD |
12mo | 3 year | 5 year | 10 year | |
| GLOBAL | |||||
| FTSE RAFI(TM) Developed ex US 1000 Index | 5.03% | 24.25% | 22.66% | 19.23% | 12.85% |
| FTSE All-World Series Developed ex-US | 4.05% | 21.95% | 21.18% | 16.83% | 9.39% |
| MSCI EAFE | 4.26% | 22.13% | 20.78% | 16.25% | 8.72% |
| NORTH AMERICA | |||||
| FTSE RAFI(TM) US 1000 Index | 1.82% | 15.00% | 13.34% | 9.43% | 12.21% |
| S&P 500 | 0.76% | 11.27% | 10.23% | 6.29% | 7.98% |
| Russell 1000 | 1.29% | 11.35% | 10.91% | 6.94% | 8.36% |
| FTSE RAFI(TM) US Mid Small 1500 Index | 2.99% | 8.45% | 15.21% | 15.60% | 15.73% |
| Russell 2000 | 1.72% | 5.81% | 12.36% | 10.89% | 10.00% |
| FTSE US Small Cap | 3.77% | 8.00% | 13.82% | n/a | n/a |
Total returns through 03/29/2007
Jerry Moskowitz, President, FTSE Americas commented: “We are pleased to be partnering with Charles Schwab, a true pioneer in the investment industry. Just as FTSE strives to provide innovative indexes for the global marketplace, Schwab Funds continually delivers innovative products for US investors.”"The FTSE RAFI™ Index Series is an exciting alternative approach to indexing. Conventional cap-weighting ties the amount invested directly to the amount that a company is over- or under-valued; most of an investor’s money is therefore in overvalued stocks,” said Rob Arnott, Chairman of Research Affiliates. “We’re proud of the early and rapid success of the FTSE RAFI™ Index Series. It’s a privilege to work with Charles Schwab, which embraced the idea as the basis of their newest mutual funds."
The Schwab Fundamental International Large Company Index Fund (benchmarked to the FTSE RAFI™ Developed ex US 1000 Index), the Schwab Fundamental US Large Company Index Fund (benchmarked to the FTSE RAFI™ US 1000 Index), and the Schwab Fundamental US Small-Mid Company Index Fund (benchmarked to the FTSE RAFI™ US Mid Small 1500 Index) are available beginning today to US investment advisors.
More information about the FTSE RAFI™ Index Series, one of FTSE’s Investment Strategy Index offerings, is available at www.ftse.com/rafi.
