If you follow the ETF industry you know that actively managed ETFs are much closer to reality than they were in the past. PowerShares has recently launched an emerging market product with a strategy that, while compelling, might be better suited if the manager had the freedom to reshuffle the holdings more frequently.The PowerShares DWA Emerging Markets Technical Leaders Portfolio (PIE) screens potential constituents (stocks from just about every emerging market) for relative strength, as index provider Dorsey Wright and Associates sees it, and builds a portfolio of 100 stocks that will hopefully outperform the iShares MSCI Emerging Markets Index Fund (EEM).
| A Strong Lineage
The PowerShares Dorsey Wright Technical Leaders Portfolio has outperformed the S&P since inception.
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| Backtest of PIE
Dorsey Wright's methodology appears to add value in emerging markets, too.