I have lately seen a lot of discussions on how indexes (especially in the US market) are overbought, and how it may be that annualized returns for S&P500 the next 10 years may be super low (even 0%) if they are based on Forward P/E ratios. Which makes me wonder, why an ETF that is based on market capitalization instead of weighing based on valuation metrics, assuming value investors expect reverting to mean in the future via overvalued companies falling prices and undervalued companies rising prices?
Or how about a combination of both in one's portfolio?
I don't see so many available value-based ETFs, but what do you people think? Is there something I'm missing?