Masters in Business: Rob Arnott

Barry Ritholtz is a Bloomberg View columnist. He founded Ritholtz Wealth Management and was chief executive and director of equity research at FusionIQ, a quantitative research firm. He blogs at the Big Picture and is the author of “Bailout Nation: How Greed and Easy Money Corrupted Wall Street and Shook the World Economy.”
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Rob Arnott turned the world of passive index investing upside down. He is best known for creating indexes that aren't weighted along traditional methods of market capitalization. Rather, he looks at fundamentals such as sales, profits, book value and dividends to weigh a company relative to the economy.

This approach has come to be called "smart beta." Funds running Arnott's models manage almost $200 billion, and assets in smart-beta strategies increased by 59 percent last year. Rob Arnott is chairman and chief executive officer at Research Affiliates and author of "The Fundamental Index: A Better Way to Invest." Listen to the full interview with Arnott here.

This is the second episode in our new series "Masters in Business" that I've created with Bloomberg Radio and Bloomberg View. Our goal is to turn the usual Wall Street interview show upside down by ignoring short-term market concerns and focusing instead on how some of the modern masters in business and finance developed their personal philosophies and strategies.

You can listen to "Masters in Business" on Bloomberg AM on weekends and nationally on Sirius XM channel 119. Listen to last week's interview with Jeff Gundlach on SoundCloud, and check back next week for a chat with Arthur Levitt.

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

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Barry L Ritholtz at