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."

WisdomTree said its new offerings provide products not available elsewhere in the market. In particular, the firm's International SmallCap Dividend Fund, which will trade on the New York Stock Exchange under the symbol DLS, is the first international small-cap ETF listed in the U.S. The company also plans to offer the first family of ETFs tracking foreign high-yielding equity funds: the DIEFA High Yielding Equity Fund, the Europe High-Yielding Equity Fund, the Japan High-Yielding Equity Fund and the Pacific ex-Japan High-Yielding Equity.

The company plans to focus on marketing to "the community that has already embraced indexing," says Bruce Lavine, WisdomTree president and chief operating officer. The company said it will promote its strategies to pension managers, plan sponsors and endowments.

The focus on dividend-paying stocks also will help the company capture the benefits of demographic changes taking place in the U.S., a WisdomTree representative said. In particular, the company wanted to generate interest in its products from retiring baby boomers who wanted investment income as well as capital gains.