This portfolio tracks W.E. Donoghue’s Power Dividend Index. The Power Dividend Index is a rules-based index calculated by Standard and Poor’s Custom Indexes. The index is predicated upon the SDOGXTR index of 50 stocks derived from the S&P 500 Index. The Power Dividend Index employs an intermediate-term tactical overlay to determine whether to be in a bullish posture or defensive posture. When in a bullish posture, the index methodology selects the five stocks in each of the ten Global Classification Standard (“GICS”) sectors that make up the S&P 500 which offer the highest dividend yields as of the last trading day of November. The index will be divided into the following ten GICS sectors: Communication Services, Consumer Discretionary, Consumer Staples, Energy, Financials, Health Care, Industrials, Information Technology, Materials, and Utilities. The sectors and the stocks selected for inclusion in the index are equally weighted so that each of the ten sectors is given an equal weight and each of the five stocks in each sector is given an equal weight. All constituents of W.E. Donoghue’s Power Dividend Index while in its bullish posture must be constituents of the S&P 500 index. Technical indicators are utilized as an overlay to shift the index to a defensive posture should the market conditions warrant to attempt to mitigate losses during equity market downturns. When in a defensive posture, the index will be invested in S&P U.S. Treasury Bond 1-3 Year Index. When in a bullish posture, the index will rebalance the individual stock holdings quarterly.
The Power Dividend Index had a value at inception of 1000, on its inception date of December 31, 1999. Index values are disseminated in US dollars via the Chicago Mercantile Exchange using the following tickers:
Price Index Ticker or Symbol is: PWRDXPX
Total Return Index Ticker or Symbol is: PWRDXTR
The Power Dividend Index Portfolio as a standalone strategy is appropriate for investors with a high risk tolerance. The portfolio is suitable for investors with a time horizon of five years or longer, as it can exhibit short-term volatility equal to or potentially greater than the overall stock market.