DWMC: 4th Quarter 2021 Portfolio Review
Strategy
Performance
Holdings
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 % |
| CALX | CALIX INC | 2.32% |
| KRNT | KORNIT DIGITAL LTD | 1.48% |
| SPLP | STEEL PARTNERS HOLDINGS LP | 1.42% |
| CAMT | CAMTEK LTD | 1.36% |
| DAC | DANAOS CORP | 1.33% |
| VRTV | VERITIV CORP | 1.27% |
| 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.
Sector
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.
Respectfully,
John G. Lewis
Nasdaq Dorsey Wright
AdvisorShares Dorsey Wright Micro Cap ETF (DWMC) Portfolio Manager
Past Manager 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. The Fund is subject to a number of risks that may affect the value of its shares, including the possible loss of principal. Stock prices of microcap companies are significantly more volatile, and more vulnerable to adverse business and economic developments, than those of larger companies. Micro-cap stocks may also be thinly traded, making it difficult for the Fund to buy and sell them. There is no guarantee that the Fund will achieve its investment objective. 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.