ProShares is partnering with Rob Arnott's Research Affiliates (RAFI) to launch an absolute return ETF based on RAFI's fundamental indexing methodology.

In essence, the vehicle will try to go long deep-value equities while selling short positions in shares of companies the model identifies as trendy stock market darlings that RAFI's models deem overpriced.

In contrast to the popular 130/30 long/short strategies employed by several investment managers (including ProShares) this ETF will allocate equal amounts to its long and short positions. The goal is to generate an absolute return over a full market cycle that looks very much like a market neutral fund with zero beta.

RAFI's strategy relies on fundamental measures of company size such as sales, dividends, cash flow and book value rather than security price in selecting and weighting the portfolio.

Michael Sapir, president and CEO of ProShares, says he thinks the fund may appeal to advisors and investors seeking low correlations to the broader market and steady returns over time.