By Carl Delfeld of the Chartwell ETF Advisor
Powershares continues to introduce new and innovative exchange-traded funds with two that follow the Dorsey Wright point and figure charting and selection and weight based on relative strength. The ETFs hit most likely begin trading on markets on December 28th.
The PowerShares DWA Developed Markets Technical Leaders Portfolio (PIZ) is based on the Dorsey Wright Developed Markets Technical Leaders™ Index. This Index includes approximately 100 companies domiciled in developed countries.
The PowerShares DWA Emerging Markets Technical Leaders Portfolio (PIE) is based on the Dorsey Wright Emerging Markets Technical Leaders™ Index. This Index includes approximately 100 companies domiciled in emerging market countries.
Relative strength measures a stock's performance in relation to its peers'. Relative strength analysis has been in existence through various forms for nearly 100 years, but DWA believes it has refined this investment strategy, creating a robust tool for stock selection and portfolio construction.
DWA tracks multiple technical market indicators through a state-of-the-art Point & Figure charting methodology that identifies "technical leaders" within the marketplace. DWA selects approximately 100 of these technical leaders to include in each of its Technical Leaders™ Indexes. The PowerShares portfolios seek to replicate these indexes, giving investors easy access to the DWA investment strategy.
I think that the emerging market ETF is quite intriguing and may add it to some of Chartwell ETF's model portfolios to complement market cap weighted emerging market ETFs like the iShares (EEM).
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