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If you're interested in broad exposure to the Small Cap Blend segment of the US equity market, look no further than the PowerShares DWA SmallCap Momentum Portfolio (DWAS), a passively managed exchange traded fund launched on 07/19/2012.
The fund is sponsored by Invesco Powershares. It has amassed assets over $295.38 M, making it one of the average sized ETFs attempting to match the Small Cap Blend segment of the US equity market.
Why Small Cap Blend
There's a lot of potential to investing in small cap companies, but with market capitalization below $2 billion, that high potential comes with even higher risk.
Typically holding a combination of both growth and value stocks, blend ETFs also demonstrate qualities seen in value and growth investments.
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for this ETF are 0.60%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.23%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Healthcare sector--about 26.60% of the portfolio. Industrials and Financials round out the top three.
Looking at individual holdings, Madrigal Pharmaceuticals Inc (MDGL) accounts for about 1.81% of total assets, followed by Axogen Inc (AXGN) and On Assignment Inc (ASGN).
The top 10 holdings account for about 14.86% of total assets under management.
Performance and Risk
DWAS seeks to match the performance of the Dorsey Wright SmallCap Technical Leaders Index before fees and expenses. The Index Provider determines a company's relative strength characteristics based on that company market performance. The Index Provider selects approximately 200 companies for inclusion in the Underlying Index from a small-cap universe of approximately 2,000 of the smallest U.S. companies selected from a broader set of 3,000 companies.
The ETF has added about 1.09% so far this year and was up about 22.72% in the last one year (as of 04/05/2018). In the past 52-week period, it has traded between $39.11 and $52.76.
The ETF has a beta of 1.09 and standard deviation of 18.18% for the trailing three-year period, making it a high risk choice in the space. With about 199 holdings, it effectively diversifies company-specific risk.
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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PWRSH-DWA SC MO (DWAS): ETF Research Reports
AxoGen, Inc. (AXGN) : Free Stock Analysis Report
On Assignment, Inc. (ASGN) : Free Stock Analysis Report
Madrigal Pharmaceuticals, Inc. (MDGL) : Free Stock Analysis Report
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