DWMC: 4th Quarter 2021 Portfolio Review
The portfolio is currently comprised of 157 companies that range in market cap from $57 million to $5,887 million. Traditionally, micro-cap companies are below $300 million in total market capitalization. Once a security is included in the portfolio, we will not sell it unless it falls significantly out of favor in our ranks. This means that at times, we may own companies that are more traditionally defined as small, mid, or large cap stocks. This allows the portfolio to fully capitalize on securities that are exhibiting strong momentum characteristics. Currently, our top 10 holdings are comprised of companies that have appreciated to a larger allocation over time in the portfolio; the top 10 holdings comprise 13.9% of the overall portfolio.
Throughout the quarter, the positions in the top half of the weights made positive contributions to the return, while those in the bottom half posted negative contributions. The top 2 deciles (roughly 40 stocks in this case) added a combined 6.33% to the overall quarterly performance. This is a good sign for the portfolio as positions with higher weights tend to be those with good momentum (as they’ve grown from equal weight to their current weighting).
Top 10 Holdings
|Ticker||Security Description||Portfolio Weight %|
|KRNT||KORNIT DIGITAL LTD||1.48%|
|SPLP||STEEL PARTNERS HOLDINGS LP||1.42%|
|ATLC||ATLANTICUS HOLDINGS CORP||1.24%|
|IDT||IDT CORP-CLASS B||1.22%|
|AMR||ALPHA METALLURGICAL RESOURCE||1.17%|
|ASPN||ASPEN AEROGELS INC||1.14%|
As of 12.31.2021. Cash is not included.
The strategy is positioned to overweight or underweight sector allocations dependent on the relative strength of the investable universe and the portfolio allocation. The sector weight is entirely determined by the strength of the individual names in the portfolio and those that are selected based on the strategies technical buy process.
The portfolio again saw a significant number of changes this quarter. Many of these came from Health Care as it was the biggest laggard in the portfolio for the quarter. Health Care is underweighted relative to the benchmark though so it didn’t hurt as much as it otherwise could have. The portfolio focused its buying in Industrials, Information Technology, Financials, and Consumer Discretionary which were all positive contributors in Q4. Consumer Discretionary, in particular, accounted for 2.2% of the overall gain (nearly half of the total) and is overweighted in the portfolio. Industrials and Materials are other significant overweights, with Health Care remaining the most significant underweight by far.
As of 12.31.2021.
John G. Lewis
Nasdaq Dorsey Wright
AdvisorShares Dorsey Wright Micro Cap ETF (DWMC) Portfolio Manager
Past Manager Commentary