“If you look around the world, you get a better feeling for what’s going on.”

Fundamental indexing has been one of the hottest investment ideas in the mutual fund world. But early returns from one of the most prominent fundamental indexing shops, New York-based WisdomTree Investments Inc., are less than groundbreaking.

Conventional index funds aim to match market results, betting that, with the help of razor-thin costs, they will be able to beat most stock-picking mutual funds over time. Recently, however, a number of high-profile index-fund critics have surfaced, arguing that these funds are flawed because traditional indexes weight companies by their market capitalization, or the total value of their outstanding shares _ a factor that reflects a big dose of market sentiment _ rather than more ‘fundamental’ criteria such as company’s earnings or dividends. Read more

Original post by The Associated Press