Dorsey, Wright & Associates

Dorsey, Wright & Associates

Founded in 1987 by Tom Dorsey and Watson Wright, the firm began as a registered investment advisor specializing in technical analysis research. Dorsey had trained at Merrill Lynch in the 1970s under the tutelage of point-and-figure practitioners, a charting discipline that filters out minor price fluctuations and focuses solely on significant supply-and-demand shifts. The firm spent its first two decades distributing research to financial advisors and institutional clients, building a subscriber base that relied on its daily point-and-figure chart books and relative strength rankings. The core methodology ranks a broad universe of securities by momentum and relative strength, then constructs portfolios favoring the highest-ranked names. The firm's signal moment came in 2007 when it licensed its methodology to Nasdaq for the creation of the PowerShares DWA Technical Leaders Portfolio, an ETF now trading as PDP. The strategy selects roughly 100 stocks demonstrating persistent outperformance and high relative strength scores, rebalancing quarterly. Beyond the flagship ETF, Dorsey Wright's relative strength rankings underpin separate accounts, SMAs, and model portfolios distributed through platforms including Envestnet, TD Ameritrade, and Charles Schwab. The firm also publishes sector-level and international relative strength rankings, extending the framework across global equities. The firm was acquired by Nasdaq in 2015 for $225 million (per Nasdaq, January 2015), folding the research operation into Nasdaq's Global Indexes division. That acquisition embedded Dorsey Wright's methodology directly into Nasdaq's index-and-ETF ecosystem, accelerating the distribution of factor-based momentum products. Richmond, Virginia remains the primary operational hub. The integration with Nasdaq unlocked broader asset-management distribution, though the brand continues to operate under the "Nasdaq Dorsey Wright" banner, with Dorsey remaining a public-facing voice for the strategy well after the acquisition. What structurally differentiates the firm from generic technical research shops is the depth of the index licensing relationship with Nasdaq—an exchange operator that had the distribution pipes to take a niche rules-based methodology and scale it into an ETF product category with over $4 billion in linked AUM across multiple funds. The firm's intellectual property is embedded not merely in research subscriptions but in the construction rules of live benchmarks, making the shift from independent research provider to a core component of a major exchange's index business the defining arc of its corporate story.