First Trust Debuts Dorsey Wright 'People's' ETF

ETF issuer transforms its VIX tail-hedge fund into a relative-strength strategy fund.
Reviewed by: Staff
Edited by: Staff

Today First Trust is repurposing an existing ETF, transforming it into a fund that will rotate among two large-cap strategies and Treasury exposure.

The First Trust Dorsey Wright People’s Portfolio ETF (DWPP) was originally the First Trust CBOE S&P 500 VIX Tail Hedge Fund (VIXH), which launched in 2012 but never gathered significant assets. Today, VIXH makes the transition to become DWPP.

“The idea behind [DWPP’s name] is that Tom Dorsey, the intellectual capital behind the idea, believes it is a strategy everyone could or should participate in. It’s just a simple, easy-to-understand strategy that makes sense in a number of different types of investors’ portfolios,” said Ryan Issakainen, exchange-traded fund strategist and vice president at First Trust.

The newly incarnated DWPP comes with an expense ratio of 0.60% and is listed on the Nasdaq stock exchange.

The Strategy

DWPP’s strategy is based on Dorsey Wright’s point-and-figure relative-strength methodology. Essentially the fund’s methodology will use the relative-strength approach to determine whether the portfolio should be in U.S. equities or U.S. Treasuries.

If equities are selected, the relative-strength approach is again used to determine whether the fund should be allocated toward a market-cap-weighted strategy in the form of the Nasdaq US 500 Large-Cap Index or an equal-weighted strategy represented by the Nasdaq US Large Cap Equal Index. Both equity indexes include the same components and simply weight them differently, the prospectus said.

“It’s not a very complicated strategy, but it has that built-in risk management,” Issakainen said, noting that Dorsey Wright’s relative-strength approach is based on price signals and on the supply-and-demand concept.

The index is rebalanced every six months as long as it is allocated to equities, but the prospectus notes the relative-strength analyses are done on an ongoing basis.

First Trust offers three other products in the U.S. that track Dorsey Wright’s relative-strength strategies, including the $2.4 billion First Trust Dorsey Wright Focus 5 ETF (FV).

Contact Heather Bell at [email protected] is the single source for ETF intelligence. We provide real-time ETF news and analysis to educate investors and drive financial knowledge in the space. Our personalized and accurate information, alongside industry-leading financial tools, are depended upon to develop winning investment and financial decisions. At, we strive to serve both the individual investor as well as the professional financial advisor to educate and grow the ETF community.