This new ETF uses Relative Strength
Type in PDP below:
Listing Today, March 1, 2007
The Power of Relative Strength
Relative strength analysis-which measures a stock's performance in relation to its peers'-has been in existence through various forms for nearly 100 years, but Dorsey, Wright & Associates (DWA) believes it has refined this investment criteria, creating a robust tool for sector rotation stock selection and portfolio management. This is accomplished by harnessing the power of a state-of-the-art Point & Figure charting methodology that identifies "technical leaders" within the marketplace.
According to DWA, relative strength:
Improves upon the technical foundation of basic trend following
Relies on unbiased, unemotional and objective data, rather than biased forecasting and subjective research.
Helps answer the question of when to buy and sell.
The Point & Figure methodology used by DWA:
Seeks to provide the investment knowledge necessary to identify both the strongest and weakest investment trends.
Analyzes the relative strength of more than 3,000 individual stocks from various broad industry sectors and sub-sectors.
Has allowed DWA to identify major market shifts such as the technology move in the late 1990s, and the energy, real estate, and basic materials moves during the past couple of years.
PowerShares DWA Technical Leaders Portfolio
Investors now have access to DWA's methodology through the PowerShares DWA Technical Leaders Portfolio (Symbol: PDP) which is based on the Dorsey Wright Technical Leaders™ Index.
DWA Technical Leaders™ Index Construction
DWA uses proprietary research to select constituents for the Technical Leaders Index. The Index includes NYSE, AMEX and Nasdaq companies that are considered to demonstrate powerful relative strength characteristics.
DWA proprietary methodology takes into account, among other factors, the performance of each of the 3,000 companies in the eligible universe as compared to a benchmark index and the relative performance of industry sectors and sub-sectors.
Approximately 100 stocks are selected for inclusion in the Technical Leaders Index. The modified equally weighted index is rebalanced and reconstituted quarterly.
Dorsey, Wright & Associates
Founded in 1987, Dorsey, Wright & Associates is an independent and privately owned registered investment advisor that supplies its clients with state-of-the-art investment research and tools that are vital to the creation of a quantitatively derived enhanced index. In addition, DWA has published numerous books on the Point & Figure methodology, trading strategies and navigating financial markets. DWA research is conducted along technical lines, adhering to the relationship between supply and demand. DWA believes this simple but accurate economic theory is manifested as a constant battle between these two forces for control of the equity vehicle. It is this objective, logical approach which helps reduce uncertainty in the market. We believe the research and methodology behind the DWA Technical Leaders™ Index will greatly improve your probability of investment success.
PowerShares Capital Management LLC
301 West Roosevelt Road
Wheaton, IL 60187