"Investors with courage should load up on emerging markets stocks and sell off the U.S. ones," says Rob Arnott, Founder and CEO of Research Affiliates and a leader in asset-allocation investing and "smart beta" portfolios.
The 63-year old goes by "The Godfather of Smart Beta" due to his role in enhanced smart-beta index funds for clients like Pimco, Invesco PowerShares, and Charles Schwab. The approach for smart-beta funds is often one of passive management, and utilizes value, low volatility, and momentum to outpace long-term returns from market-weighted strategies.
Arnott built portfolios that challenge norms, and he is guided by one mantra: buy cheap assets and sell expensive ones. Right now, U.S. stocks are overpriced and emerging market stocks look cheap.
Read more at Barron's.