A smart-beta pioneer, Rob Arnott of Research Affiliates warns that these investment vehicles are in a bubble, says an article in last week’s Bloomberg.

Smart-beta ETFs organize securities based on quantitative factors like volatility or “cheapness”, and the article explains that Arnott’s position is nothing new (he publicly battled with Cliff Asness on the topic a year ago). In fact, his firm’s website (Research Affiliates specializes in “cheap-stock” ETFs) offers investors a tool to gauge which funds are “about to pop” and has created a line of indexes that adjust holdings based on variables such as valuation.

According to the article, Arnott’s belief is that “the only reason most smart-beta ETFs succeed is because people rushed into them and inflated their value. His thinking goes that with no structural or economic justification for the factor’s advance, it’s destined to revert to its mean and burn millions of investors in the process.”

Arnott has published several papers on the topic beginning last February, but his advice seems to be falling on deaf ears. The article explains his view that, “Investors accept the delusion that the past is key to predicting the future in smart beta, leading to performance chasing where factors like low-volatility can become dangerously expensive.”

While Arnott doesn’t advocate completely selling out of expensive strategies, the article says he believes “investors could juice their returns by adjusting their portfolios based on valuations.”