On March 1, 2006, the Dynamic Market Intellidex (DYI) completed a quarterly rebalance through a posting made at 8:18 a.m. on the American Stock Exchange's Amextrader Web page:

• http://www.amextrader.com

Click on "Daily Lists," then "Indexes," then enter the date "0/3/01/2006." Scroll down to the Indellidex symbol DYI.

• http://www.powershares.com/holdingsm.asp

DYI always holds 100 stocks selected quarterly by a proprietary rules-driven model. On 3/1/06, a fairly high number of components, 69, turned over (i.e., 69 new stocks were added and 69 were deleted). The rules that drive DYI rebalancing events assure that each sector of the U.S. economy is represented in the index in approximately the same weight as the S&P 500. (DYI performance is driven by individual stock selection, not sector selection.)

The Amex publishes the weightings of each component as a number of shares held in a hypothetical portfolio. On 3/1/06, for example, the index's two largest holdings were Exxon Mobile (108,225 shares) and Burlington Resources (71,746 shares), each representing about 3.5% of index weight. In terms of market cap, component size ranged from Exxon Mobile's $370 billion down to AMN Healthcare Services' $590 million.

Investors who buy PWC, the PowerShares ETF paired with DYI, have the potential to participate in a dynamic core U.S. equity index portfolio that can (and has) outperformed the S&P 500 – similar to investors in a successful actively managed mutual fund. But PWC investors have one key advantage that mutual fund investors don't – real time transparency. On any given day, investors can see which 100 stocks their portfolios hold and the weightings of each. They are posted for the index and paired ETF here:

• Index: www.amex.com, then "Other Products" and "Product Information" and "Indexes." Scroll down to DYI.
• ETF:www.powershares.com/

  holdingsm.asp

PWC is a convenient way to participate in DYI, with a high degree of index tracking. However, this level of transparency also raises other possibilities, especially for purposes of constructing separate accounts based on groupings of DYI components. It seems clear that financial advisors may not build separate accounts consisting of all 100 stocks and then offer these to their clients as an index-tracking portfolio. (DYI currently is licensed for index-tracking purposes to PowerShares.) However, it is less clear how advisors may utilize DYI components as a "universe" of stocks for purposes of further analysis and refinement in offering managed separate account portfolios to clients. In effect, Amex is breaking new ground by publishing results of a proven and powerful stock selection model on the Web for free.

Stay tuned for major innovations!