Trump said he doesn't see a recession after the bond market spooked investors and the Dow suffered its worst day of the year last week.Marketsread more
The U.K. prime minister prepares to meet his German and French counterparts this week.Europe Politicsread more
Amazon is raising seller fees for thousands of small and medium-sized businesses in France because of a new digital tax passed by the French government.Technologyread more
U.S. stock index futures point to a higher open on Monday morning as the White House sought to calm investors over growing concerns about the U.S. economy.US Marketsread more
Ahead of the deadline, U.S. President Donald Trump told reporters that Huawei was a national security threat.Technologyread more
Bianco Research's James Bianco suggests Wall Street is desperately looking for a signal that a 50 basis point cut is coming next month.Trading Nationread more
Baidu is gearing up to release its second-quarter earnings on Monday with the market expecting a sharp decline in profit.Technologyread more
Americans now say they approve of free trade by 64%-27%, a margin of better than two to one. That's up from 57%-37% early in Trump's presidency, and 51%-41% near the end of...Politicsread more
Stocks in Asia rose on Monday as U.S. Treasury yields bounced higher after plunging last week.Asia Marketsread more
The problem with tanking equities lies elsewhere, writes Michael Ivanovitch, because traders see no end to America's unfolding trade disputes with Europe and China.World Economyread more
Beijing wants to use reforms to support a slowing economy.China Marketsread more
Rob Arnott, the founder and chief executive officer of Research Affiliates, shares his market views in an exclusive interview for CNBC PRO with Mike Santoli.
On why fundamental indexing outperforms: "You're getting the return from re-balancing. You're contra-trading against the market's most extravagant bets. When the market says, here's a company that's a wonderful company with great growth prospects. You're basically saying that's probably true, but it's already in the price," Arnott said.
"You're already pre-paying for all the future growth you're expecting. So thanks for those lovely gains, I'm just going to re-weight it back down ... As the market is constantly changing its mind. You're turning that volatility into excess return," he added.
Fundamental indexing strategies rebalance positions according to valuation measures instead of the market cap-weighted allocations typically used by passive index funds. As a result, the holdings tend to overweight undervalued companies and underweight overvalued companies.
He is known as one of the earliest advocates of fundamental indexing. The investor is also the portfolio manager of the PIMCO All Asset and All Asset All Authority funds.
Approximately $179 billion of assets are managed using strategies developed by Research Affiliates as of March 2017, according to the company website. The firm's RAFI Developed index generated 4.85 percent annual returns in the last decade compared to the MSCI All Country World index's 4.27 percent return.
He also discusses:
The interview is exclusively for CNBC PRO subscribers.