A Surging Smart Beta Small-Cap ETF

Small-caps, though, can still navigate through a slowly rising rate environment. Smaller companies, which focus on U.S. markets, are less exposed to a stronger U.S. dollar as rates rise, which would more negatively affect larger corporations with a global footprint. Additionally, periods of rising rates also coincide with expanding economies, which often benefit smaller companies.

DWAS holds almost 200 stocks with an average market capitalization of $1.5 billion. The ETF is heavily allocated to three sectors as healthcare, technology and financial services combine for nearly two-thirds of its weight. Industrial and consumer discretionary names combine for another 26.3%.

As a momentum-based strategy, it is not surprising that about 58% of DWAS’s holdings are considereed growth stocks. The remainder are split between small-cap blend and value names. Over the past year, DWAS has topped the Russell 2000 Index by about 250 basis points.

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