Rob Arnott is the founder of Research Affiliates, a global leader in innovative investing and asset allocation strategies. The firm is perhaps best known for its role in developing fundamentally-weighted indexes that utilize the RAFI methodology. This strategy involves selecting and weighting securities by fundamental measures of company size, as opposed to market capitalization. The methodology captures many of the benefits of passive investing—such as transparency, objectivity, broad economic representation, and diversification—with less exposure to pricing errors and fads. Several ETFs are linked to RAFI indexes, including several PowerShares products and a long/short ETF from ProShares. Rob recently sat down with ETF Database to talk about some of the limitations of traditional cap weighting methodologies, why alternatives have been slow to catch on, and what fundamental indexing can bring to the bond space: ETF Database (ETFdb): Why do you think market-cap weighting is the dominant force in the equity ETF [...] Click here to read the original article on ETFdb.com. Related Posts: Bond ETF Ideas: Room For Growth In Fixed Income Arena Recapping Impressive Innovation In Bond ETF Space Russell, RAFI Team Up On Fundamental Indexes RAFI ETF Turns Five, Celebrates Results For ETF Investors, The Details Matter