Robert Arnott, chairman of Research Affiliates, has won a U.S. patent for his fundamental indexing methodology, based on the size of a company rather than its market capitalization.

Research Affiliates’ more than 100 indexes eschew traditional indexes, which overweight what it says are often “overpriced” securities and underweight “underpriced” securities, thereby costing investors 2% to 4% lower returns annually.

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