PowerShares DWA SmallCap Technical Leaders Portfolio (NYSEArca: DWAS), an index-based ETF that incorporates elements of active management, recently celebrated its first birthday with performance that trounced the Russell 2000.
DWAS has posted a total return of 45.7% for the year ended July 23, while the iShares Russell 2000 (NYSEArca: IWM) gained 37.2%, according to Morningstar performance data. DWAS listed on July 19, 2012.
Invesco PowerShares manages a suite of DWA Technical Leaders funds that investors can use to “efficiently tap the alpha-seeking potential of momentum factor-based ETFs globally,” said Andrew Schlossberg, head of global ETFs at the company. “As the leading provider in smart beta ETFs, we see a lot of potential for focused factor-based strategies to help investors achieve their goals, whether it’s seeking to enhance returns, reduce risk, or both.”
Earlier this month, PowerShares said its family of fundamental ETFs passed $5 billion in assets. [PowerShares Fundamental ETFs Hit $5 Billion]
DWAS tracks an index maintained by Dorsey, Wright & Associates designed to identify companies that demonstrate powerful relative strength characteristics. The benchmark is comprised of about 200 companies selected from a small-cap universe of approximately 2,000 of the smallest U.S. companies. [PowerShares Lists Small-Cap ETF Based on Relative Strength]
There are many ETFs tied to fundamentally weighted benchmarks that attempt to outperform traditional indices that weight individual stocks by market capitalization. These ETFs blur the line between active and passive management. The funds mimic strategies used by active fund managers, but in a rules-based index.