This series is republished with permission from Market Realist. Editor Peter Barnes of Market Realist interviews two Nasdaq Global Information Services leaders: Dave Gedeon, Head of Research and Product Development, Nasdaq Global Information Services and Tom Dorsey, Founder of Dorsey, Wright & Associates, a Nasdaq Company.
PART 15 OF 18
Market Realist: I’d like to speak about how you were acquired by Nasdaq. How have investors benefited from this acquisition?
Tom: Nasdaq brings credibility to Dorsey Wright. I think that for probably half of the tenure of DWA, we had five people here. And then we grew to 20 people, but that’s all we’ve ever had. Nasdaq has a very large global presence. We are now in a different ballgame – the Big League.
Market Realist: Where do you see the smart beta universe headed and the total AUM, and where do you see Nasdaq fitting into that?
Tom: We’re already changing the landscape of smart beta. We’ve developed two ETFs with risk management embedded into the fund. Now the advisor does not have to take it upon himself or herself to raise cash due to market fluctuations as the product will already raise cash inside the wrapper, so we are already taking smart beta into a whole new realm. In this new realm, you have everything locked up into one wrapper.
Or, you can even take our tactical tilt product. This product embraces modern portfolio theory and DWA’s philosophy of relative strength. In my opinion, this is the final solution where a total portfolio, no matter how large, can be managed in one wrapper with a rules-based system. We will continue creating more unique products that make it easier for the advisor to use and easier for compliance to accept.
Market Realist’s View: Tactical tilt products minimize risks
The DWA Tactical Tilt portfolios seek to balance risk management demands and wealth accumulation needs for investors using six macro asset classes in a dynamic fashion. The portfolio can be positioned offensively during risk-on market trends and afforded flexibility to conversely “Tilt” in a more defensive manner during risk-off situations.
As the graph above shows, an example offensive environment using a Moderate Tactical Tilt Strategy could invest up to 75% toward equities and as little as 20% toward bonds. In a defensive environment, by contrast, the same portfolio could allocate up to 75% toward non-equity investments (Cash, Bonds and Alternatives) in an effort to preserve wealth during potential bear markets.
For more information about Nasdaq’s Smart Beta offering, please visit our website or contact us here.
Dorsey, Wright & Associates, LLC, a Nasdaq Company, is a registered investment advisory firm.Neither the information within this article, nor any opinion expressed shall constitute an offer to sell or a solicitation or an offer to buy any securities, commodities or exchange traded products. This article does not purport to be complete description of the securities or commodities, markets or developments to which reference is made.
The relative strength strategy is NOT a guarantee. There may be times where all investments and strategies are unfavorable and depreciate in value. Relative Strength is a measure of price momentum based on historical price activity. Relative Strength is not predictive and there is no assurance that forecasts based on relative strength can be relied upon.
Past performance, hypothetical or actual, does not guarantee future results. In all securities trading there is a potential for loss as well as profit. It should not be assumed that recommendations made in the future will be profitable or will equal the performance as shown. Investors should have long-term financial objectives. Advice from a financial professional is strongly advised.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
