The Nasdaq-100 Dorsey Wright Momentum Index saw its first evaluation earlier this month, leading to 8 new names added to the 21 member portfolio.

In May, we announced the launch of the Nasdaq-100 Dorsey Wright Momentum Index. As a brief refresher, the Nasdaq-100 Dorsey Wright Momentum Index is composed of 21 equal-weighted stocks within the Nasdaq-100 universe with superior Relative Strength/momentum characteristics. The index is evaluated and reconstituted/rebalanced quarterly on a Jan/Apr/Jul/Oct cycle. To construct the index, we utilize the Nasdaq-100 Total Return RS Matrix located under the “Premade Matrices” section of the NDW Research Platform. Like many of our matrix-based strategies, we start by buying the top 21 ranked names in the Nasdaq-100 RS Matrix and only sell them once they fall significantly out of favor to reduce turnover. Once a position moves low enough in the matrix to warrant its removal, we sell it and then buy the highest-ranked security that we do not already own to replace it. In this way, we consistently rotate the portfolio out of relative underperformers and into relative outperformers over time. To read more about the approach behind the index, click here to read our whitepaper titled, “Applying Momentum to the Nasdaq-100 Index.”

The Index saw its first evaluation earlier in the month of July, which resulted in eight names being sold and eight new names being added. These new additions saw the exposure toward technology lose the most of any sector, however, the sector remains overweight within the portfolio at over 42% of the index. Healthcare saw the largest gain of any sector, increasing over 14% to an allocation of 23.81% following the latest evaluation. Each of the current index holdings can be found below, along with the breakdown of sector weights within the index.