I have been browsing around ETFs for low-cost 'Value' funds, which I must say are quite limited. I happened across a whole range of RAFI Indices (Research Affiliates Fundamental Index) which are quite curious, and I have not seen discussed here before.
RAFI-based ETFs are available for a wide range of countries although I have only had a look at the UK and US. Here is a link to the fundamental basis of these Indices http://www.rallc.com/rafi/index.htm which are constructed on the basis of 'fundamental value' rather than Cap-weight.
"According to our research, the Fundamental Index approach has generated added value of 2% to 4% per year over cap-weighted indexes for large company stocks in developed markets, based on long-term simulations. For less efficient parts of the market, such as emerging market equities, the opportunity to add value is greater."
Here is a link to the FTSE RAFI website http://www.ftse.com/Indices/FTSE_RAFI_Index_Series/Index_Rul...
"Using fundamental measures of company size, such as sales and dividends, the RAFI methodology represents a company's economic footprint...."
Seems this type of Index gets away from the problems associated with standard index funds where overvalued, high PE stocks can skew the index in times of, say, the Tech-Stock bubble.
I'll cross-post this to the ETF Board as well.
Thanks
De1b0y