TMX Group has agreed to acquire RAFI Indices from Research Affiliates for US$490 million, adding the fundamental-indexation franchise to its TMX VettaFi indexing and analytics business. The transaction is expected to close by the end of the third quarter of 2026.
RAFI Indices is the index business built around the fundamental-indexation methodology developed at Research Affiliates by Rob Arnott and colleagues, first published in the Financial Analysts Journal in 2005. The approach weights index constituents by measures of economic footprint – sales, cash flow, book value and dividends – rather than by market capitalisation, and is widely regarded as the original fundamental-index strategy. The acquisition adds RAFI’s index methodology and associated licensing arrangements to VettaFi’s existing index-construction, ETF-data and digital-distribution capabilities.TMX reports that RAFI Indices carries pro forma run-rate revenue of approximately US$49 million and adjusted EBITDA of approximately US$38 million as at 31 March 2026. The company notes that these figures are compiled from Research Affiliates management accounts and are unaudited.
Extending VettaFi
The purchase follows TMX’s full acquisition of VettaFi, completed at the start of 2024 for a total of US$1.03 billion across the staged purchase of the business. TMX set out its rationale for that earlier move when it took its initial stake in VettaFi in early 2023, describing itself as a financial information business and pointing to custom indices, thematics and the services ETF issuers require as the opportunity it was pursuing. The company has said the VettaFi acquisition was intended to increase the proportion of group revenue derived from its Global Solutions, Insights and Analytics segment and from recurring sources.
The RAFI purchase extends VettaFi’s index coverage into fundamental and factor-based strategies, a segment of the indexing market in which the RAFI methodology has an established presence. Index licensing of this kind generates revenue through fees tied to assets benchmarked to or tracking a given methodology, a model that has underpinned the recurring-revenue case TMX has made for its data and analytics expansion.
TMX has not detailed how RAFI will be integrated into VettaFi or whether the methodology will anchor new product launches. Further detail on the combined business is likely to follow completion, currently expected by the end of the third quarter of 2026.
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