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What does this say when RA (the ultimate non-market-cap indexer with RAFI) comes out with a cap-weighted index & ETF RAUS? OK, there is a fundamental screen first & then cap-weighting. It's a way for enhanced market-cap indexing - screen(s) can be applied before or after. LinkedIn https://rafietfs.com/raus-etf/
I'm trying to understand how adding a screen reduces turnover as claimed. Since the proprietary index starts with the investible US equity universe and filters out the 14% least fundamentally sound securities, it seems to me that any turnover comparison should be against a US total market fund.
VTSMX has a reported turnover of 2.00% (as of 12/31/24). It's hard to see how turnover could get much lower (okay, there is LEXCX). And if the filter has any impact, it's going to affect which companies get included/excluded year by year (reconstitution). That would seem to increase turnover.
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VTSMX has a reported turnover of 2.00% (as of 12/31/24). It's hard to see how turnover could get much lower (okay, there is LEXCX). And if the filter has any impact, it's going to affect which companies get included/excluded year by year (reconstitution). That would seem to increase turnover.