First Trust Revamps An ETF For The People

The First Trust CBOE S&P 500 VIX Tail Hedge ETF, which debuted in 2012, is no more. That ETF has been rebranded into the First Trust Dorsey Wright People’s Portfolio ETF DWPP.

DWPP tracks the Nasdaq Dorsey Wright People's Portfolio Index. That ETF always one of the three following positions: All the component securities in the Nasdaq US 500 Large Cap Index, all of the component securities in the Nasdaq US 500 Large Cap Equal Weight Index or all the component securities in the Nasdaq US T-bill Index,” according to First Trust.

DWPP currently holds nearly stocks, none of which account for more than a quarter of a percent of the ETF's weight, and has $3.88 million in assets under management.

Relative Strength

As is the case with many ETFs that follow Dorsey Wright indexes, DWPP features a relative strength component.

“Relative strength, or momentum, reflects the price performance of a security compared to the market average, another security or a universe of securities and is a way of recording historic price performance patterns.

“The relative strength reading improves if it rises more than the benchmark in an uptrend or if it decreases less than the benchmark in a downtrend. Basically, it is a way of picking out high-flying stocks that fly even higher,” according to ETF Trends.

DWPP's holdings have a median market capitalization of $20.7 billion. The ETF's price-to-earnings ratio is just over 22.

Sector Selections

DWPP allocates about 30 percent of its combined weight to technology and financial services stocks. The consumer discretionary and healthcare sectors combine for almost 27 percent of the ETF's roster. Industrial and consumer staples names combine for 19.5 percent.

“The point and figure relative strength analysis between these indexes and T-bills is conducted daily. This may result in a high portfolio turnover rate,” according to First Trust.

DWPP charges 0.6 percent per year, or $60 on a $10,000 stake.

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