The Power Dividend Index Fund (PWDIX, PWDAX & PWDCX) tracks the W.E. Donoghue Power Dividend Total Return Index (PWRDXTR). The W.E. Donoghue Power Dividend Total Return Index uses a proprietary methodology to trigger allocations between an equally weighted portfolio of dividend paying stocks and money markets. The PWRDXTR methodology employs a systematic approach to identify the five stocks in each of the ten S&P 500 Global Industry Classification Standard (GICS) sectors with the highest dividend yields. The ten GICS sectors are consumer discretionary, consumer staples, energy, financials, health care, industrials, information technology, materials, telecommunication services and utilities. This methodology is designed to convey the potential benefits of high dividend yield, sector diversification, equal weighting and risk reduction. Technical indicators are utilized as an overlay for allocating between either stocks or money markets, should market conditions warrant, to attempt to mitigate losses during equity market downturns.
The technical indicators employed are a tactical overlay based on exponential moving average crossovers utilized to determine whether the Index, and therefore the Fund, will either be in a bullish or bearish position. When in a bearish position the underlying equity portfolio of 50 stocks are rebalanced on a quarterly basis to bring the holdings back to an equally weighted portfolio. The rebalance is done at the close of trading on the third Friday of the last month of each calendar quarter.