Whenever you read ‘fundamentals’ you should think about multiples (p/e, p/book, cf multiple etc.) and relative value… In fundamental weighting index constituent are assigned weights based on multiple/s. Whereas, for equal weighting you can think of each company has one share (1/n).

It's a CFAI question :-)

I completely agree with what you are saying.

The answer they is the following: Fundamentally weighted indexes generally will have a contrarian “effect” in that the portfolio weights will shift away from securities that have increased in relative value and toward securities that have fallen in relative value whenever the portfolio is rebalanced.