Thomas Dorsey, founder of Dorsey Wright & Associates, credits the idea for his firm to a moment he had during the 2008 financial crisis. While millions were losing their retirements, he was looking out an office building’s window, transfixed by a nameless landscape crew member mowing the lawn. “I saw him and I thought, who helps this guy?” Dorsey said. “He has maybe a few thousand dollars in savings; he’s not going to go to a big broker and getting expensive advice; so who helps him?”
Dorsey took the idea and ran with it, founding an asset management firm and research platform now valued at $12 billion. The company offers ‘the People’s Portfolio,’ a fund that was designed, according to Dorsey, to be “so simple a fourth grader could do it.” The company was acquired by Nasdaq in 2015, and the portfolio, which was recently launched in an ETF format, as the First Trust Dorsey Wright People’s Portfolio ETF.
The construction is valuable to small investors, because it doesn’t try and out-perform the market with active management. Instead, it rotates between tracking the broader market, an equal-weighted version of the same market, and ultra-safe Treasurys, in times of crisis. As a result, the portfolio tends to flatline, rather than drop, during financial dives.
“This is not a trading vehicle where you’re looking at short-term performance,” says Dorsey. “This is designed to be bought and held for the rest of your life.”