AI TRENDS | Research Affiliates’ Arnott Says Mega IPOs May Divert Billions From Existing Stocks

Research Affiliates founder Rob Arnott said mega initial public offerings such as SpaceX, Anthropic PBC, and OpenAI could divert tens of billions of dollars from existing stocks and weigh on the broader stock market for years. According to Odaily, Arnott said the diversion effect may take time to appear after S&P Dow Jones Indices decided not to quickly add these large new listings to its indexes. Arnott said he expects the impact to take longer to spread to other parts of the market as these companies’ index weights rise gradually. He added that the process is already affecting capital markets. Arnott is known for research on fundamental indexing, which sets index constituent weights based on measures such as earnings and cash flow. He is also described as a pioneer of smart beta investing, and Research Affiliates’ strategies have been used by institutions including Pimco and Invesco.