DWAW: 3rd 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’s strong first half slowed in the third quarter and underperformed its benchmark, the MSCI ACWI Index. DWAW made changes to both of its holdings in the third quarter which pushed the portfolio towards US large cap blend exposure. While not a major change to the holdings from last quarter, the subtle shift from growth to blend highlights the broader participation in the market since the start of the second half of the year. A big rally from Chinese equities helped push DWAW’s global benchmark, the MSCI ACWI, higher while DWAW maintained its exclusively US exposure. Despite its underperformance in the third quarter, DWAW finished in positive territory with a return of 0.33% (market).
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 rotated out of its heavy overweight towards growth and into a more blended exposure. While there were changes to the holdings, DWAW is still exclusively allocated to the large cap US market. The portfolio is made up of two ETFs, both of which have shown high relative strength versus the broad market. DWAW now holds the SPDR S&P 500 ETF Trust (SPY) and iShares Morningstar U.S. Equity ETF (ILCB).
Top Holding(s)
| Ticker | Security Description | Portfolio Weight % |
| SPY | SPDR S&P 500 ETF TRUST | 62.86% |
| ILCB | ISHARES MORNINGSTAR U.S. EQU | 36.92% |
As of 9.30.2024. Cash not included.
Top 10 Underlying Stock Exposure
| Security Description | Ticker | Portfolio Weight % |
| Apple Inc. | AAPL | 6.99% |
| Microsoft Corporation | MSFT | 6.45% |
| NVIDIA Corporation | NVDA | 5.94% |
| Amazon.com, Inc. | AMZN | 3.53% |
| Meta Platforms Inc Class A | META | 2.52% |
| Alphabet Inc. Class A | GOOGL | 1.96% |
| Berkshire Hathaway Inc. Class B | BRK.B | 1.69% |
| Alphabet Inc. Class C | GOOG | 1.67% |
| Broadcom Inc. | AVGO | 1.61% |
| Tesla, Inc. | TSLA | 1.46% |
As of 9.30.2024.
Sector
With the rotation into the blend style box, DWAW has less exposure to technology and consumer discretionary. Information Technology exposure went from 40% to 31% due to the swap of ILCG (iShares Morningstar Growth ETF) for ILCB (iShares Morningstar U.S. Equity ETF). Financials and Health Care, and Industrials each have over a 10% allocation. Real Estate, Utilities, Energy, and Materials each make up less than 5% of sector exposure.
As of 9.30.2024.
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.