We speak a bit about recent options and fund flows in the largest U.S. Small-Cap Equity oriented ETF today, IWM (iShares Russell 2000, Expense Ratio 0.28%) in our Options recap this morning, and this presents an opportunity to examine a lesser known Small Cap focused fund that has just come off an impressive 2013 in terms of performance.
DWAS (PowerShares DWA SmallCap Technical Leaders Portfolio, Expense Ratio 0.60%) eclipsed the $40 mark late last year for the first time since this product’s inception back in July of 2012, and was among the leaders of all Small-Cap focused funds in terms of returns last year.
DWAS tracks the Dorsey Wright SmallCap Technical Leaders Index, which encompasses 200 companies selected out of a universe of approximately 2,000 companies. Dorsey Wright is clearly a familiar name among advisors as they are well-known in the technical analysis world, and increasingly so in terms of technical analysis and ETFs by building a presence there over the past five years or so.
DWAS measures companies by their technical relative strength and at last check the fund had top end exposure to companies like KapStone Paper and Packaging Corp (1.60%), Conn’s Inc. (1.51%), Virtus Investment
Partners Inc. (1.45%), Sinclair Broadcast Group Inc. (1.42%), and Akorn Inc. (1.42%), none of these exactly household names, although Virtus will strike a chord with those in the ETF managed portfolio and/or Mutual fund space since they are a powerhouse there.
Put these holdings head to head with the market cap weighted benchmark, the Russell 2000, and they bear little resemblance (Russell 2000 top holdings are PCYC, OCN, STWD, GWR, DDD), so DWAS is set up as a stock picker’s type ETF, one with a clear technical bent.
Granted the live performance of the fund having debuted in mid-2012 is very limited and some may want to see a full three if not five years live performance through various market cycles before allocating positions to the fund, but that has not thwarted the fund from raising more than $633 million in assets under management in a relatively short amount of time as well as now averaging greater than 175,000 shares traded on an average daily basis.
PowerShares DWA SmallCap Momentum Portfolio
For more information on Street One ETF research and ETF trade execution/liquidity services, contact Paul Weisbruch at pweisbruch@streetonefinancial.com.
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