ETFs based on tech index launched

Tracking the performance of approximately 100 U.S.-listed securities, the new ETF offered by PowerShares Capital Management LLC of Wheaton, Ill., is the first based on technical analysis in the Dorsey Wright Technical Leaders Index, according to a statement from the NYSE.

The modified equal-dollar weight index is comprised of approximately 100 U.S. companies from a broad universe of large-cap and mid-cap stocks and is based on the proprietary selection process of Dorsey Wright & Associates Inc. of Richmond, Va.

“A primary feature of the Dorsey Wright Technical Leaders Index is that it will adapt over time to changes in market leadership, whether those leadership changes are based upon market capitalization, style, industry sector, or other factors,” Tom Dorsey, president of Dorsey Wright & Associates said in a statement.

Various studies have indicated “relative strength” is a powerful stock selection methodology, he said.

“Relative strength is unique in that it does not rely on a company’s financial information, which can easily be manipulated by management,” Mr. Dorsey said.