DWAW: 3rd Quarter 2022 Portfolio Review

Performance data quoted represents past performance and is no guarantee of future results. Current performance may be lower or higher than the performance data quoted. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than original cost. Returns less than one year are not annualized. For the fund’s most recent standardized and month-end performance, please click www.advisorshares.com/etfs/dwaw.

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 & Holdings

2022 has been a tough year for most domestic and international equity benchmarks with the MSCI ACWI Index finishing the third quarter down -6.82%. DWAW fared about the same in the third quarter relative to its benchmark with a loss of -7.45%. DWAW entered the year with a heavy growth tilt which led to underperformance during the start of the year after a rough January. In February, both holdings were sold, and the new holdings shifted focus from US large cap growth to US large cap value. The fund continued to move more defensively in the second quarter as it picked up low volatility exposure in May. Then in August, DWAW rotated out of low volatility and into large blend which still leaves the portfolio with an overweight towards large cap value.

​Top Holding(s)

The portfolio continues to be allocated to securities that displayed favorable relative strength characteristics during the fund’s last evaluation. The portfolio is made up of two ETFs, both of which have shown high relative strength versus the broad market. This past quarter has brought a change in leadership which led the fund to change its holdings in August to a large cap value tilt.

Ticker Security Description Portfolio Weight %
RPV INVESCO S&P 500 PURE VALUE ETF 49.98%
RSP INVESCO S&P 500 EQUAL WEIGHT 48.66%

Top Underlying Stock Exposure

Security Description Ticker Portfolio Weight %
Cigna Corporation CI 1.41%
Marathon Petroleum MPC 1.38%
Berkshire Hathaway Inc. Class B BRK.B 1.22%
Valero Energy Corporation VLO 1.17%
Allstate Corporation ALL 1.11%
MetLife Inc. MET 1.06%
Archer-Daniels-Midland Company ADM 1.05%
CVS Health Corporation CVS 0.95%
Prudential Financial, Inc. PRU 0.91%
Everest Re Group, Ltd. RE 0.90%

As of 09.30.2022. Cash is not included.

Geographic & Sector Allocations

The portfolio’s universe of funds to choose from includes domestic, emerging, and developed markets, but is currently allocated only to the domestic equity market.


As of 09.30.2022.

Given the overweighting of value in DWAW, financials is the highest weighted sector at 22.00%. Given the rotation out of low volatility, exposure to consumer staples and utilities fell in the third quarter but consumer staples still have a notable allocation of 8.52%. Healthcare is now the second-highest weighted sector with 12.84% of the overall allocation. Real estate and communication services have the lowest weightings of the eleven major sectors.


As of 09.30.2022.

Respectfully,

John Lewis
Nasdaq Dorsey Wright
AdvisorShares Dorsey Wright FSM All Cap World ETF (DWAW) Portfolio Strategist

 

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, 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.