Among the ways to leverage the work of Dorsey Wright is through the Unit Investment Trusts that we construct for First Trust. We have been managing these UITs since early 2011 and have been happy with their results over time. For clients who are looking for a disciplined way to get exposure to a systematic relative strength strategy, we believe that these UITs may be a good solution. A brief introduction to both series of UITs is given below:
The Dorsey Wright Relative Strength Top 50 Series is a unit investment trust which invests in stocks selected by Dorsey Wright and is designed to be held over the fixed 15-month term of the trust.
Portfolio Selection Process
Through the selection process, we seeks to identify those companies that we believe are technical leaders within the marketplace. We begin with the companies listed in the S&P; 900 Index. All of the securities in the universe are scored on several measures of relative strength. The next step in the process is to determine the portfolio’s sector exposure. The sector weightings are determined by a combination of current market weights and the relative strength ranking of the securities within each sector. The goal is to acheive a portfolio of high relative strength securities with an overall sector weighting close to current market weights. The final step is to select the top 50 companies for the portfolio based on relative strength. The stocks are equally-weighted within the portfolio.
Portfolio holdings of the most recent trust are shown below:
The Dorsey Wright Relative Strength Dividend Portfolio is a unit investment trust which invests in stocks selected by Dorsey Wright and is designed to be held over the fixed 15-month term of the trust.
Portfolio Selection Process
Through the selection process, we seeks to identify those companies that we believe will meet the dividend objective of the portfolio. We begin with the companies listed in the S&P; 900 Index. All of the securities in the universe are scored on several measures of relative strength. The next step in the process is to determine the portfolio’s sector exposure. The sector weightings are determined by a combination of current market weights, the relative strength ranking and those with the highest dividend yield of the securities within each sector. The goal is to acheive a portfolio of high relative strength securities with an overall sector weighting close to current market weights. The final step is to select the top 50 companies for the portfolio based on relative strength and dividend yield. The stocks are equally-weighted within the portfolio.
Portfolio holdings of the most recent trust are shown below:
To receive fact sheets, see www.ftportfolios.com.
An investment in this unmanaged unit investment trust should be made with an understanding of the risks involved with owning common stocks, such as an economic recession and the possible deterioration of either the financial condition of the issuers of the equity securities or the general condition of the stock market. Past performance is not indicative of future results. Potential for profits is accompanied by possibility of loss. A relative strength strategy is NOT a guaranteee. There may be times where all investments and strategies are unfavorable and depreciate in value. A list of all holdings over the past 12 months is available upon request.
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