BETHESDA, Md., July 12, 2018 /PRNewswire/ — AdvisorShares, a leading sponsor of actively managed exchange-traded funds (ETFs), announced that the AdvisorShares Dorsey Wright Micro Cap ETF (Ticker: DWMC) and the AdvisorShares Dorsey Wright Short ETF (Ticker: DWSH) began trading on July 11, 2018.
DWMC and DWSH are actively managed by Nasdaq Dorsey Wright who are renowned for their core philosophy of relative strength investing, which involves buying securities that have appreciated in price more than the other securities in their investment universe and holding those securities until they exhibit sell signals. Both DWMC and DWSH follow this core philosophy and use technical, systematically-driven approaches that refrain from using fundamental company data and remove any human emotion from the day-to-day decision making. Dorsey Wright also utilizes their proprietary relative strength approach as the portfolio manager for the AdvisorShares Dorsey Wright ADR ETF (Ticker: AADR), which carries a five-star Morningstar rating for its overall risk-adjusted performance and ranks among the top-performing international equity strategies among both mutual funds and ETFs.1
DWMC seeks long-term capital appreciation by investing in exchange-listed micro cap equities with sufficient liquidity that have a market capitalization of less than $1 billion. DWMC invests in the micro cap securities that demonstrate the most favorable relative strength characteristics according to Dorsey Wright’s proprietary methodology, resulting in a portfolio of approximately 150 holdings that aims to allow its winners to run while avoiding laggards. Some of the largest companies in the world began as micro caps and DWMC seeks to capitalize on the significant, upside growth potential of the most attractive, smallest-sized companies today as they work to become future market leaders.
Conversely, the short equity DWSH seeks to turn laggards into winners. DWSH identifies and short sells securities that demonstrate the highest relative weakness from an investment universe primarily comprised of large-cap U.S.-traded equities. DWSH’s dedicated short equity portfolio typically has 75-100 holdings that begin with a modified equal weighting. At certain technical levels during severe market downturns, the strategy can allocate its short exposure more broadly to the domestic equity market – by shorting individual ETFs or futures contracts – seeking to enhance its total return. DWSH’s systematic and selective approach can serve as a hedge to long, domestic equity exposure, while offering the potential opportunity to add alpha to an investment portfolio especially during a bear market.
“We’re pleased to again partner with Dorsey Wright and deliver their proprietary micro cap strategy and short equity strategy as fully-transparent, operationally-efficient ETFs,” said Noah Hamman, chief executive officer of AdvisorShares. “We’ve witnessed tremendous success with AADR and we believe that advisors will also discover DWMC and DWSH as compelling offerings to consider for their clients’ long-short equity allocations.”
“ETFs represent an expanding frontier of innovation and investment accessibility for financial advisors,” said Tom Dorsey, founder of Nasdaq Dorsey Wright. “As pioneers of technical analysis and relative strength investing, we’re pleased to again share our portfolio management expertise through AdvisorShares with these fully-transparent ETFs that advisors may use to potentially benefit their investment practice.”
“DWMC and DWSH represent Dorsey Wright firsts, where we are managing micro cap equity and short equity investment strategies that follow our core relative strength philosophy,” said John Lewis, CMT, senior portfolio manager at Nasdaq Dorsey Wright and the portfolio manager of AADR, DWMC and DWSH. “We believe that our technical, systematic approach can apply successfully across a multitude of investment strategies and this includes DWMC and DWSH, which also provide the structural benefits of fully-transparent ETFs.”
A leading provider in the actively managed ETF marketplace, AdvisorShares offers 15 active ETFs with $880 million of assets under management (as of July 1, 2018).
The Fund is subject to a number of risks that may affect the value of its shares, including the possible loss of principal. Stock prices of microcap companies are significantly more volatile, and more vulnerable to adverse business and economic developments, than those of larger companies. Micro cap stocks may also be thinly traded, making it difficult for the Fund to buy and sell them. There is no guarantee that the Fund will achieve its investment objective.
The Fund is subject to a number of risks that may affect the value of its shares, including the possible loss of principal. Short sales are transactions in which the Fund sells a security it does not own. To complete the transaction, the Fund must borrow the security to make delivery to the buyer. The Fund is then obligated to replace the security borrowed by purchasing the security at the market price at the time of replacement. If the underlying security goes down in price between the time the Fund sells the security and buys it back, the Fund will realize a gain on the transaction. Conversely, if the underlying security goes up in price during the period, the Fund will realize a loss on the transaction. Any such loss is increased by the amount of premium or interest the Fund must pay to the lender of the security. Likewise, any gain will be decreased by the amount of premium or interest the Fund must pay to the lender of the security. Because a short position loses value as the security’s price increases, the loss on a short sale is theoretically unlimited. Short sales involve leverage because the Fund borrows securities and then sells them, effectively leveraging its assets. The use of leverage may magnify gains or losses for the Fund. As with any fund, there is no guarantee that the Fund will achieve its investment objective.
Shares are bought and sold at market price (closing price) not net asset value (NAV) and are not individually redeemed from the Fund. Market price returns are based on the midpoint of the bid/ask spread at 4:00 pm Eastern Time (when NAV is normally determined) and do not represent the return you would receive if you traded at other times.
1 Overall Morningstar rating is derived from a weighted average of the fund’s three-, five-, and 10-year (if applicable) risk-adjusted returns as of May 31, 2018. AADR is in the Foreign Large Growth category, which consists of 345 funds in three-year, 307 in five-year, and 216 in 10-year.
The Morningstar Rating™ for funds, or “star rating,” is calculated for managed products with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product’s monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of products in each product category receive five stars, the next 22.5% receive four stars, the next 35% receive three stars, the next 22.5% receive two stars, and the bottom 10% receive one star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three- and five-year Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns.
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This article provided by NewsEdge.