Exchange traded funds (ETFs) based on fundamental indexes are proliferating, but they are having a difficult time garnering assets.

Assets among 69 ETFs based on fundamental indexes totaled just over $7 billion at the end of 2007, the same year most were launched, according to Morningstar. Among all 629 ETFs, assets total more than $600 billion, according to the Investment Company Institute.

Fundamental indexes are those that use some measure other than market capitalization to determine company weightings. The study conducted by Morningstar focused in on three fundamental indexers: PowerShares, Rydex and WisdomTree, reports David Hoffman for Investment News.

Considering that fundamental ETFs haven’t been around for long – WisdomTree, the largest such provider launched its first fundamentally based ETF last April – investor reluctance is natural. We have yet to see proof from a performance standpoint that fundamental indexing performs.