VettaFi to buy RAFI Indices as thematic ETF demand grows

VettaFi announced on June 11 that it will acquire RAFI Indices in a transaction expected to close in the coming weeks. The purchase will expand VettaFi’s index-linked ETF assets from about $90 billion to more than $260 billion.

The deal will roughly triple VettaFi’s index capabilities and add RAFI’s fundamentally weighted indexes. Those indexes are used in ETFs issued by firms including Invesco and PIMCO. Todd Rosenbluth, head of research at VettaFi, said fundamentals such as valuation and quality have taken on greater weight in index and portfolio construction as markets shift away from the largest market-cap names.

Rosenbluth pointed to the Invesco RAFI US 1000 ETF (PRF) as an example of a fund that tracks a fundamentally weighted index and has delivered strong returns in the current market environment. He also highlighted the Victory Shares Free Cash Flow ETF (VFLO), a VettaFi-linked index product that does not hold any of the largest technology companies yet has outperformed the S&P 500 since its launch about three years ago.

Interest in thematic ETFs has risen in 2026, Rosenbluth said, with focused strategies tied to artificial intelligence drawing particular attention while other niche themes also attract flows. He cited the Procure Space ETF (UFO) for space-related exposure, the ROBO Global Robotics and Automation Index ETF (ROBO) for robotics and automation, and the Alerian MLP ETF (AMLP) for energy infrastructure exposure.

Rosenbluth described growing appetite for international ETF exposure as well, spanning both passive and active approaches. He urged investors to check fund composition carefully because regional factors can produce very different returns. He referenced recent political instability in the U.K. as an example of a factor that leads some investors to seek funds that exclude certain markets or use strategies such as currency hedging, noting the WisdomTree Europe Hedged Equity Fund (HEDJ) as an example that hedges currency risk.

VettaFi said it collects index licensing fees for products tied to its indexes, including VFLO, ROBO, AMLP and UFO, but it does not issue or sponsor those ETFs and holds no obligation or liability for their issuance or trading. The company described the RAFI acquisition as a way to expand its index business and broaden its product lineup in response to growing investor interest in fundamentally weighted and thematic strategies.