DWAW: 2nd Quarter 2024 Portfolio Review
Strategy
The AdvisorShares Dorsey Wright FSM All Cap World Equity ETF’s (DWAW) uses relative strength to allocate towards the strongest performing areas of Global Markets including size, style, broad market, and factor ETFs. The strategy implements Dorsey Wright’s proprietary Fund Scoring Method, FSM, which is built around relative strength and momentum. The top two scoring funds at each seasonal quarterly evaluation are selected as the holdings. The strategy is not constrained to holding a set allocation to any sector, style, cap, or factor. This allows the portfolio to over or underweight markets to concentrate on areas of strength in the global market, often pushing the portfolio to vary dramatically from a standard broad market benchmark.
Performance
DWAW greatly benefitted from its heavy overweight in growth and technology in the second quarter quarter posting a return of 5.44% (NAV). DWAW’s strong second quarter outpaced its benchmark, the MSCI ACWI Index by more than 285 bps. DWAW did make a change in May as it sold the Invesco QQQ Trust (QQQ) to buy the iShares Morningstar Growth ETF (ILCG). This was a relatively small change given the similarities between QQQ and ILCG, but it was a slight tilt away from technology. Leadership has been consistent since the middle of the fourth quarter of 2023 which has helped momentum and relative strength strategies like DWAW along with its holding MTUM.
Holdings
The portfolio continues to be allocated to securities that displayed favorable relative strength characteristics during the fund’s last evaluation. As mentioned previously, DWAW has a hefty growth and technology exposure. The portfolio is made up of two ETFs, both of which have shown high relative strength versus the broad market. DWAW now holds the iShares MCSI USA Momentum Factor ETF (MTUM) and iShares Morningstar Growth ETF (ILCG).
Top Holding(s)
| Ticker | Security Description | Portfolio Weight % |
| ILCG | ISHARES MORNINGSTAR GROWTH E | 50.41% |
| MTUM | ISHARES MSCI USA MOMENTUM FA | 49.47% |
As of 6.30.2024. Cash not included.
Top 10 Underlying Stock Exposure
| Security Description | Ticker | Portfolio Weight % |
| NVIDIA Corporation | NVDA | 9.67% |
| Microsoft Corporation | MSFT | 7.04% |
| Amazon.com, Inc. | AMZN | 6.11% |
| Eli Lilly and Company | LLY | 4.50% |
| Broadcom Inc. | AVGO | 3.91% |
| Meta Platforms Inc Class A | META | 3.55% |
| Apple Inc. | AAPL | 3.22% |
| JPMorgan Chase & Co. | JPM | 2.17% |
| Costco Wholesale Corporation | COST | 1.94% |
| Advanced Micro Devices, Inc. | AMD | 1.90% |
As of 6.30.2024.
Sector
With the rotation into ILCG, DWAW has slightly less exposure to technology and consumer discretionary. Information Technology exposure went from 45% to 40% due to the swap of QQQ for ILCG. Communication Services, Consumer Discretionary, Health Care, and Industrials each have roughly a 10% allocation. Real Estate, Utilities, Energy, Financials, and Materials each make up less than 5% of sector exposure.
As of 6.30.2024.
Respectfully,
Nasdaq Dorsey Wright
AdvisorShares Dorsey Wright FSM All Cap World ETF (DWAW) Portfolio Model Manager
Past Commentary
Before investing you should carefully consider the Fund’s investment objectives, risks, charges and expenses. This and other information is in the prospectus or summary prospectus, a copy of which may be obtained by visiting www.advisorshares.com. Please read the prospectus carefully before you invest. Foreside Fund Services, LLC, distributor.
Investing Involves risk including possible loss of principal. The Advisor’s judgment about the markets, the economy, or companies may not anticipate actual market movements, economic conditions or company performance, and these factors may affect the return on your investment. Foreign investing involves special risks, such as risk of loss from currency fluctuation or political or economic uncertainty. Investments in emerging or offshore markets are generally less liquid and less efficient than investments in developed markets and are subject to additional risks, such as risks of adverse governmental regulation and intervention or political developments. The market value of debt securities held by the Fund typically changes as interest rates change, as demand for the instruments changes, and as actual or perceived creditworthiness of an issuer changes.
Shares are bought and sold at market price (closing price) not 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.
Holdings and allocations are subject to risks and to change. The views in this commentary are those of the portfolio manager and may not reflect his views on the date this material is distributed or anytime thereafter. These views are intended to assist shareholders in understanding their investments and do not constitute investment advice.