Invesco PowerShares, the money management firm best known for
its Nasdaq-100 ETF (NasdaqGM:QQQ) today rolled out another Dorsey
Wright-linked fund, this one a small-cap U.S. equities ETF that
looks to expand on the success of its large-cap predecessor, the
PowerShares DWA Technical Leaders Portfolio (NYSEArca:PDP)
The PowerShares DWA SmallCap Technical Leaders Portfolio
(NYSEArca:DWAS) tracks the Dorsey Wright SmallCap Technical Leaders
Index and invests in 200 small-cap companies selected from a pool
of 2,000 based on Dorsey Wright & Associates' "relative
strength" scoring.
The mix is a modified equally weighted portfolio that costs 0.60
percent and is rebalanced quarterly. DWAS follows its large-cap
predecessor, the PowerShares DWA Technical Leaders Portfolio
(NYSEArca:PDP), which applies the same methodology to the U.S.
large-cap segment, and has attracted $560 million since its 2007
inception.
Investors have grown to embrace small-cap strategies as part of
their overall equities exposure and fund providers have been quick
to cater to that demand. In the U.S. today, there are at least 60
small-cap U.S. equity ETFs, including leveraged and inverse
strategies, that vie for investor attention.
Small-cap stocks are particularly attractive at certain times of
an economic cycle such as at the beginning of expansions when
smaller-cap stocks tend to outperform larger-cap equities. DWAS'
relative strength methodology looks to hone in on the ones that
stand out relative to their peers.
The new ETF would be PowerShares' fourth ETF to tap into Dorsey
Wright's expertise. The company also has an emerging markets fund
and one focused on developed markets that apply the same
methodology.
The PowerShares DWA Developed Markets Technical Leaders
Portfolio (NYSEArca:PIZ) has gathered $50 million in assets, while
the PowerShares DWA Emerging Markets Technical Leaders Portfolio
(NYSEArca:PIE) has $162 million in assets.
Health care is DWAS' largest sector allocation, representing
22.4 percent of the portfolio, followed by an 18.5 percent
allocation to financials and 16 percent to information technology.
At launch, eight sectors were represented in the mix, according to
information provided by the company on its website.
Top holdings include the likes of Jazz Pharmaceuticals, Pier 1
Imports, Clean Harbors and Dollar Thrifty Automotive.
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