Dorsey Wright indices, which employ a relative strength methodology, are being used by a rising number of ETFs. Last month, PowerShares, which has long-standing relationship with Dorsey Wright, transitioned 10 of its ETFs, including nine sector funds to, Dorsey Wright indices.[PowerShares Details Portfolio Changes]
The Dorsey Wright Focus Five Index “is rebalanced periodically so each position is equally weighted. DWA believes the design of the index allows them to identify major themes in the market, have exposure to those sectors whose price action is superior to others in the universe and eliminate exposure to those sectors whose price action is sub-par relative to others in the universe,” according to the statement.
Other new ETFs launched by First Trust this year include the First Trust NASDAQ Rising Dividend Achievers ETF (NasdaqGS: RDVY), First Trust High Income ETF (NasdaqGM: FTHI) and the First Trust Low Beta Income ETF (NasdaqGM: FTLB).
ETF Trends editorial team contributed to this post.