AdvisorShares Debuts New Micro Cap, Short ETFs
This article was originally published on ETFTrends.com.
AdvisorShares, a Bethesda, Maryland-based investment firm that offers ETF solutions, debuted two new ETFs on Wednesday--the AdvisorShares Dorsey Wright Micro Cap ETF (NASDAQ: DWMC) and the AdvisorShares Dorsey Wright Short ETF (NASDAQ: DWSH) .
Both ETFs launched with expense ratios of 0.99% on the Nasdaq stock exchange.
"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, CEO 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."
DWMC hopes to capitalize on companies with a market capitalization of less than $1 billion. Microcap equities, as reflected in the Russell Microcap Index, have seen an 11% increase year-to-date.
DWMC invests in microcap equities with favorable relative strength characteristics that meet or exceed Dorsey Wright's proprietary methodology for selection. The microcap portfolio will consist of 150 holdings that takes advantage of strong performers and avoids underperformers.
Related: Small Cap ETFs are Unlikely Market Leaders
DWSH's strategy scours the markets for underperformers and short sells securities that demonstrate the highest relative weakness. Securities selected will primarily be large-capitalization U.S. equities, consisting of a short equity portfolio with about 75-100 holdings that begin with a modified equal weighting. When capital markets experience a downturn, DWSH's 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 and effectively hedging long equity exposure.
DWMC and DWSH will both be actively managed by Nasdaq Dorsey Wright--best known for their core philosophy of relative strength investing. This investment strategy involves purchasing securities that have appreciated in price more than other securities and then holding those securities until they exhibit sell signals. Furthermore, both ETFs will use technical, systematically-driven investment approaches that avoid fundamental company data and remove human emotions from day-to-day management.
"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."
Related: ETFs In Focus: Targeting 7-9% Shareholder Yields; Small Caps To Continue Outperforming
DWMC and DWSH add to AdvisorShares' current ETF roster, bringing their total to 18 ETF solutions available.
"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."
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