"I'm a huge fan of Ben Graham. I view him as one of the first quantitative managers," Gambla said.

Nobody can really argue with that claim, since Graham died in 1976. But like those that've tried in the past, Gambla points to a wealth of writings left behind by Graham as well as reviews of his work by a legion of others.

"Graham looked at data in a very rigorous manner," Gambla said. "He was very objective and consistent in his analysis."

These days, quant managers upload huge amounts of data and use computers to crunch and sort out patterns. Graham didn't have such access to computers. But he ranked stocks based on certain metrics for various types of businesses.

Essentially, Graham's process wasn't a whole lot different than today's quant managers use, Gambla says. The biggest change in today's modern quant world has been the amount of data and speed that an automated process can add to the basic Graham methodology, he adds.

Not All Are Disciples

But some aren't so sure. Count financial author and advisor Richard Ferri as highly skeptical about the new indexing approach.

"This was bound to come along at some point," said the chief executive at Portfolio Solutions LLC. "We'll probably see the same thing with an ETF replicating the work of Warren Buffett at some point."

Ferri says he doubts that computers can fully capture what Graham or Buffett went through in picking stocks.

"Real humans making subjective decisions—that element just can't be replicated by computers," he said. "If it were that simple, a lot of people would be rich by now. But it's great marketing—something with sizzle that brokers can try to peddle to their clients."

Murray Coleman is managing editor of IndexUniverse.com. He can be reached at: This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

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