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The Invesco Dorsey Wright SmallCap Momentum ETF seeks to track the performance of the Dorsey Wright SmallCap Technical Leaders Index. This fund typically invests at least 90% of its total assets in equity securities of small-capitalization companies that comprise this index. The index itself consists of approximately 200 companies chosen from the NASDAQ US Benchmark Index through a proprietary selection methodology from Dorsey, Wright & Associates, LLC. This process identifies companies demonstrating strong relative strength based on their market performance. Both the fund and the index…
Is DWAS's expense ratio expensive, average, or a steal for its category?
Pro reveals the verdict on a 5-tier spectrum calibrated against ICI 2025 industry averages, with strategy-aware bands so the comparison is meaningful.
Strong returns in U.S. stocks, particularly over the past two plus years, have led investors to question the relative lack of companies going public via the IPO process — as well as the potential implications for the IPO market in the long term. According to active equity managers, a combination of increased public market regulation, a reduced pipeline of potential offerings following the prior boom, the rising role of large private asset managers in capital raising, and near-term uncertainty surrounding government policy are all contributing factors. At Russell Investments, we think investors benefit from taking a long-term view.
The Invesco Dorsey Wright SmallCap Momentum ETF has a strong growth profile but has underperformed other small-cap momentum funds like XSMO and USVM since 2021. DWAS focuses on U.S. small-cap companies with strong relative performance, heavily weighted towards industrials and technology sectors, and has a high turnover rate. Despite outperforming the Russell 2000 index over time, DWAS has higher volatility, lower liquidity, and higher expense ratios compared to peer funds.
XSMO: Outperforming For A Few Years, Unconvincing In The Long Run
The new year is poised for a resurgence in tech IPOs, as lower interest rates and an investor shift to small- and mid-cap companies combine to create a more welcoming market for debuts. The current environment presents the most favorable conditions for the recovery of IPOs in the past three years. The S&P 400 Midcap Index and the S&P 600 Index have outperformed the S&P 500 Index since the US election Nov. 5.
DWAS offers exposure to small- and mid-cap names with convincing momentum characteristics. Yet, its strategy of capitalizing on SMID stocks that were on a tear did not translate into meaningful and consistent outperformance in the past. Its historical risk-adjusted returns are much weaker than those of IVV and IJR, owing to its volatility, which, in turn, is likely influenced by soft quality.