In the battle between exchange traded funds (ETFs) based on proprietary index methodology and those based on traditional indexing, the clear winner is…

No one, really.

Andy Mayo of Seeking Alpha breaks it down by taking a look at four proprietary funds (two from PowerShares, two based on Morningstar’s index methodology) and four traditional (two apiece from Russell and Vanguard).

For the last six months of 2007, the best performing of those funds was a PowerShares large cap, followed by a Vanguard large growth. The worst performer of the group in that time frame? Also a PowerShares fund.

All eight funds are in negative territory off the market high of October 9, but the large caps outperformed the small caps. However, off the market low of November 26, things have aligned a little more, with the small caps outperforming ever so slightly.

What does all of this mean? Mayo raises some good questions: has the market discounted a coming recession and small caps are poised to surge? Or is it all just a sign that small caps were oversold? And what about the types of indexing? Will we ever see a clear winner?

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.