New York investment management firm WisdomTree set forth plans Tuesday to become the latest company to jump on the exchange-traded fund bandwagon, announcing a new family of ETFs set to launch Friday.

The firm plans to offer 20 ETFs, including three Japan-specific funds and four funds specializing in high-yielding equities outside the U.S. The funds, set to be traded on the New York Stock Exchange, will track "fundamentally weighted" dividend indices, rather than the market cap-weighted indices often used for ETFs.

"We believe our research demonstrates that we have found a better way to index," said Jonathon Steinberg, WisdomTree CEO, on a conference call Tuesday.

Steinberg said the company is seeking to capitalize on recent research that demonstrated dividends have traditionally composed the lion's share of returns to equity investors.

Jeremy Siegel, a professor at the University of Pennsylvania's Wharton School and WisdomTree's senior investment strategist, said the indices calculate a weighting by using a company's dividend and its number of shares outstanding.

"WisdomTree's indexes are based on the premise that market cap-weighting is only justified if stocks are always priced rationally, which isn't always the case," Siegel said in a statement. "I believe WisdomTree has developed an effective strategy to exploit these mispricings."

The company used back testing -- calculating how an index might have performed if it had existed in the past -- to test the WisdomTree indices. That testing showed that the indices outperformed cap-weighted indices in "virtually all markets," WisdomTree said.

"Our historical studies were extremely favorable and we were very impressed, and we thought we could develop investment products so much better than those offered by the rest of the industry," said Siegel on the call.

He said the bubble years of the late 1990s disturbed him as overvalued tech companies became increasingly overweighted in index funds.

"I was unhappy about what was happening to my index funds," Siegel said on the call. "I didn't want to be overweighted in tech socks."

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