(DWSH) DORSEY WRIGHT SHORT ETF
NAV as of 7/30/2021
$8.71
1 Day NAV Change as of 7/30/2021
$0.04
DWSH
Overview
Markets can easily move in any direction and an investment portfolio can easily follow suit. Similar to insuring the most valuable and important possessions in life, incorporating a hedge into an equity allocation can provide an effective means of delivering protection to an investment portfolio during unexpected market downturns. Such a specialized approach to long/short diversification requires a specialized skill set from a manager with a deep expertise in navigating all aspects of the equity market.
The AdvisorShares Dorsey Wright Short ETF (Ticker: DWSH) is managed by Nasdaq Dorsey Wright a firm renowned for relative strength investing. Relative strength investing involves buying securities that have appreciated in price more than the other securities in their investment universe and holding those securities until they exhibit sell signals. In implementing DWSH’s shorting strategy to its core philosophy of relative strength investing, Dorsey Wright identifies and short sells those securities with the highest relative weakness within an investment universe primarily comprised of large-capitalization U.S.-traded equities. DWSH’s investment process is purely systematic and removes any human emotion from the day-to-day decision making.
| Symbol | Exchange | Inception Date | CUSIP | Indicative Value | Leverage Exposure |
|---|---|---|---|---|---|
| DWSH | Nasdaq | 7/10/2018 | 00768Y529 | DWSH.IV | No |
<strong>Why Invest in DWSH?</strong>
- Hedging Investment Tool – DWSH can be implemented as part of a long/short strategy to provide an investor with a “buy and hold” alternative to hedge their long domestically-traded equity exposure.
- Alpha-Seeking Exposure – DWSH’s systematic and selective approach offers the potential opportunity to add alpha to an investment portfolio, especially during a bear market. At certain technical levels during severe market downturns, the strategy can allocate its short exposure more broadly to the domestic equity market – by shorting individual ETFs or futures contracts – seeking to enhance its total return.
- For Manager Diversification – Through an established portfolio manager, spreading your investment risk among equities not correlated to the broader market can help diversify and mitigate your overall portfolio risk. DWSH differs considerably from inverse ETF investment strategies, which are subject to daily resets and blindly sell short the top companies within a market-cap weighted index such as the S&P 500.
- For Strategy Diversification – The systematic portfolio management process seeks to limit unnecessary risk and maximize exposure to the momentum factor. If a security becomes too large as a percentage of the portfolio it is trimmed to bring it back in line with the other security weights. The process also seeks to similarly spread out allocations within its stock model. The objective sell discipline represents an important component of the portfolio construction process.
<strong>Where Can DWSH Fit in a Traditional Portfolio?</strong>
DWSH can provide a satellite equity holding to a broad-based equity allocation that may be used to hedge volatility and risk for similar long equity exposure, seeking positive returns in a declining equity market.
<strong>Key Attributes</strong>
- Dedicated Short Portfolio of Weakest Companies – DWSH typically has a portfolio of 75 – 100 equities that begin with a modified equal weighting, demonstrating the highest relative weakness characteristics according to Dorsey Wright’s proprietary individual stock rotation methodology.
- Systematic Approach – DWSH’s investment process is entirely systematic and is designed to remove human emotion from the decision process. This approach allows the portfolio manager the ability to continually execute their proven investment process through all types of different markets. The process also allows the portfolio manager the ability to analyze a large number of securities that may become very different over time.
- Relative Strength/Weakness Analysis – DWSH uses a core philosophy of relative strength investing, which compares price performance within a universe of stocks. Relative strength investing provides a repeatable process both to identify and to identify and select the leaders, as well as conversely to identify and select the laggards through relative weakness to sell short.
- Disciplined Sell Process – Securities are automatically sold from the portfolio when they surpass a predetermined rank threshold. The sell rank is determined when the security is purchased and is not adjusted for different market scenarios. The sell process is entirely based on technical, systematic ranks and does not allow for any portfolio manager discretion or overrides.
<strong>About the Portfolio Manager</strong>
John G. Lewis, CMT, Senior Portfolio Manager
John Lewis is a Senior Portfolio manager with Nasdaq Dorsey Wright. In this role, Mr. Lewis is responsible for the investment strategies used in various different indices and models.
Since joining the firm in 2002, Mr. Lewis has developed strategies for the firm’s Systematic Relative Strength series of separate accounts, the Technical Leaders Index methodology, global asset allocation strategies, and multiple series of UITs. His work is technically driven and focuses on relative strength and momentum as the main factors in the investment process.
One of the foremost experts on relative strength investing, Mr. Lewis has authored several original research papers on the subject. He is a Chartered Market Technician (CMT) and a member of the Market Technician’s Association and the American Association of Professional Technical Analysts. Mr. Lewis earned an M.B.A. in Finance from the University of Southern California and a B.A. from the University of San Diego.
Fund
Price History
As of 7/30/2021
| NAV | $8.71 | Closing Price | $8.74 |
| Change | $0.04 | Close Change | $0.06 |
| Shares Outstanding | 3,140,000 | Volume | 4,038 |
| 4PM Bid/Offer Midpoint | $8.73 | Premium Discount | $0.01 |
| Assets Under Management | $26,779,981.05 | 30-Day Median bid-ask Spread | - |
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.
FUND
Performance
As of 6/30/2021
| NAV | Market Price Return | S&P 500 Index | |
|---|---|---|---|
| 1 Month | -2.17 | -2.62 | 2.33 |
| 3 Months | -7.55 | -7.56 | 8.55 |
| YTD | -25.22 | -25.17 | 15.25 |
| 1 Year | -55.58 | -55.79 | 40.79 |
| Since Inception (7/10/2018, Annualized) | -30.13 | -30.21 | 17.74 |
As of 6/30/2021
| NAV | Market Price Return | S&P 500 Index | |
|---|---|---|---|
| 1 Month | -2.17 | -2.62 | 2.33 |
| 3 Months | -7.55 | -7.56 | 8.55 |
| YTD | -25.22 | -25.17 | 15.25 |
| 1 Year | -55.58 | -55.79 | 40.79 |
| Since Inception (7/10/2018, Annualized) | -30.13 | -30.21 | 17.74 |
Performance data quoted represents past performance and is no guarantee of future results. All Fund data and performance data quoted is believed to be accurate, and unless otherwise stated, is sourced from the Fund administrator, the Advisor’s or Sub-Advisor’s proprietary data, and Morningstar. 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.
| Date | Account Symbol | Stock Ticker | Security Number | Security Description | Shares/Par (Full) | Price (Base) | Traded Market Value (Base) | Portfolio Weight % | Asset Group |
|---|---|---|---|---|---|---|---|---|---|
| 07/30/2021 | DWSH | VST | 92840M102 | VISTRA CORP | (16,580.00) | 19.15 | (317,507.00) | -1.16% | S |
| ROL | 775711104 | ROLLINS INC | (8,014.00) | 38.33 | (307,176.62) | -1.12% | S | ||
| HOLX | 436440101 | HOLOGIC INC | (4,057.00) | 75.04 | (304,437.28) | -1.11% | S | ||
| JKHY | 426281101 | JACK HENRY & ASSOCIATES INC | (1,707.00) | 174.09 | (297,171.63) | -1.09% | S | ||
| PRGO | G97822103 | PERRIGO CO PLC | (6,138.00) | 48.03 | (294,808.14) | -1.08% | FS | ||
| PAYC | 70432V102 | PAYCOM SOFTWARE INC | (732.00) | 400.00 | (292,800.00) | -1.07% | S | ||
| FISV | 337738108 | FISERV INC | (2,515.00) | 115.11 | (289,501.65) | -1.06% | S | ||
| GWRE | 40171V100 | GUIDEWIRE SOFTWARE INC | (2,502.00) | 115.20 | (288,230.40) | -1.05% | S | ||
| WEC | 92939U106 | WEC ENERGY GROUP INC | (3,050.00) | 94.14 | (287,127.00) | -1.05% | S | ||
| CONE | 23283R100 | CYRUSONE INC | (4,012.00) | 71.27 | (285,935.24) | -1.05% | S | ||
| OLED | 91347P105 | UNIVERSAL DISPLAY CORP | (1,217.00) | 234.49 | (285,374.33) | -1.04% | S | ||
| FDS | 303075105 | FACTSET RESEARCH SYSTEMS INC | (793.00) | 357.28 | (283,323.04) | -1.04% | S | ||
| MKTX | 57060D108 | MARKETAXESS HOLDINGS INC | (594.00) | 475.17 | (282,250.98) | -1.03% | S | ||
| CABO | 12685J105 | CABLE ONE INC | (149.00) | 1,887.99 | (281,310.51) | -1.03% | S | ||
| VRSK | 92345Y106 | VERISK ANALYTICS INC | (1,480.00) | 189.94 | (281,111.20) | -1.03% | S | ||
| CSGP | 22160N109 | COSTAR GROUP INC | (3,153.00) | 88.85 | (280,144.05) | -1.02% | S | ||
| BFAM | 109194100 | BRIGHT HORIZONS FAMILY SOLUT | (1,871.00) | 149.50 | (279,714.50) | -1.02% | S | ||
| CTXS | 177376100 | CITRIX SYSTEMS INC | (2,776.00) | 100.75 | (279,682.00) | -1.02% | S | ||
| ATO | 049560105 | ATMOS ENERGY CORP | (2,836.00) | 98.59 | (279,601.24) | -1.02% | S | ||
| GPN | 37940X102 | GLOBAL PAYMENTS INC | (1,434.00) | 193.41 | (277,349.94) | -1.01% | S | ||
| BKI | 09215C105 | BLACK KNIGHT INC | (3,340.00) | 82.81 | (276,585.40) | -1.01% | S | ||
| BF/B | 115637209 | BROWN-FORMAN CORP-CLASS B | (3,896.00) | 70.92 | (276,304.32) | -1.01% | S | ||
| RGA | 759351604 | REINSURANCE GROUP OF AMERICA | (2,506.00) | 110.18 | (276,111.08) | -1.01% | S | ||
| AXS | G0692U109 | AXIS CAPITAL HOLDINGS LTD | (5,426.00) | 50.87 | (276,020.62) | -1.01% | FS | ||
| LOPE | 38526M106 | GRAND CANYON EDUCATION INC | (2,975.00) | 92.37 | (274,800.75) | -1.01% | S | ||
| TTWO | 874054109 | TAKE-TWO INTERACTIVE SOFTWRE | (1,581.00) | 173.42 | (274,177.02) | -1.00% | S | ||
| LMT | 539830109 | LOCKHEED MARTIN CORP | (737.00) | 371.67 | (273,920.79) | -1.00% | S | ||
| BAH | 099502106 | BOOZ ALLEN HAMILTON HOLDINGS | (3,191.00) | 85.81 | (273,819.71) | -1.00% | S | ||
| DLTR | 256746108 | DOLLAR TREE INC | (2,742.00) | 99.79 | (273,624.18) | -1.00% | S | ||
| SVC | 81761L102 | SERVICE PROPERTIES TRUST | (24,567.00) | 11.13 | (273,430.71) | -1.00% | S | ||
| NFLX | 64110L106 | NETFLIX INC | (528.00) | 517.57 | (273,276.96) | -1.00% | S | ||
| ICUI | 44930G107 | ICU MEDICAL INC | (1,341.00) | 203.29 | (272,611.89) | -1.00% | S | ||
| CTSH | 192446102 | COGNIZANT TECH SOLUTIONS-A | (3,700.00) | 73.53 | (272,061.00) | -1.00% | S | ||
| WEX | 96208T104 | WEX INC | (1,432.00) | 189.73 | (271,693.36) | -0.99% | S | ||
| KMT | 489170100 | KENNAMETAL INC | (7,492.00) | 36.25 | (271,585.00) | -0.99% | S | ||
| PG | 742718109 | PROCTER & GAMBLE CO/THE | (1,907.00) | 142.23 | (271,232.61) | -0.99% | S | ||
| CHD | 171340102 | CHURCH & DWIGHT CO INC | (3,130.00) | 86.58 | (270,995.40) | -0.99% | S | ||
| BWXT | 05605H100 | BWX TECHNOLOGIES INC | (4,717.00) | 57.43 | (270,897.31) | -0.99% | S | ||
| FGEN | 31572Q808 | FIBROGEN INC | (20,789.00) | 13.00 | (270,257.00) | -0.99% | S | ||
| K | 487836108 | KELLOGG CO | (4,260.00) | 63.36 | (269,913.60) | -0.99% | S | ||
| CDK | 12508E101 | CDK GLOBAL INC | (5,618.00) | 47.99 | (269,607.82) | -0.99% | S | ||
| CHDN | 171484108 | CHURCHILL DOWNS INC | (1,451.00) | 185.80 | (269,595.80) | -0.99% | S | ||
| NEU | 651587107 | NEWMARKET CORP | (852.00) | 315.91 | (269,155.32) | -0.98% | S | ||
| FIS | 31620M106 | FIDELITY NATIONAL INFO SERV | (1,800.00) | 149.05 | (268,290.00) | -0.98% | S | ||
| WMT | 931142103 | WALMART INC | (1,882.00) | 142.55 | (268,279.10) | -0.98% | S | ||
| BLL | 058498106 | BALL CORP | (3,316.00) | 80.88 | (268,198.08) | -0.98% | S | ||
| ECL | 278865100 | ECOLAB INC | (1,214.00) | 220.83 | (268,087.62) | -0.98% | S | ||
| SPLK | 848637104 | SPLUNK INC | (1,885.00) | 141.98 | (267,632.30) | -0.98% | S | ||
| EIX | 281020107 | EDISON INTERNATIONAL | (4,897.00) | 54.50 | (266,886.50) | -0.98% | S | ||
| AEP | 025537101 | AMERICAN ELECTRIC POWER | (3,027.00) | 88.12 | (266,739.24) | -0.98% | S | ||
| SIRI | 82968B103 | SIRIUS XM HOLDINGS INC | (41,226.00) | 6.47 | (266,732.22) | -0.98% | S | ||
| DHC | 25525P107 | DIVERSIFIED HEALTHCARE TRUST | (68,079.00) | 3.90 | (265,508.10) | -0.97% | S | ||
| ETR | 29364G103 | ENTERGY CORP | (2,579.00) | 102.92 | (265,430.68) | -0.97% | S | ||
| SAGE | 78667J108 | SAGE THERAPEUTICS INC | (6,048.00) | 43.73 | (264,479.04) | -0.97% | S | ||
| FLR | 343412102 | FLUOR CORP | (15,819.00) | 16.66 | (263,544.54) | -0.96% | S | ||
| VIAC | 92556H206 | VIACOMCBS INC - CLASS B | (6,434.00) | 40.93 | (263,343.62) | -0.96% | S | ||
| KMB | 494368103 | KIMBERLY-CLARK CORP | (1,939.00) | 135.72 | (263,161.08) | -0.96% | S | ||
| SGEN | 81181C104 | SEAGEN INC | (1,710.00) | 153.39 | (262,296.90) | -0.96% | S | ||
| CL | 194162103 | COLGATE-PALMOLIVE CO | (3,299.00) | 79.50 | (262,270.50) | -0.96% | S | ||
| T | 00206R102 | AT&T INC | (9,348.00) | 28.05 | (262,211.40) | -0.96% | S | ||
| PCG | 69331C108 | P G & E CORP | (29,780.00) | 8.79 | (261,766.20) | -0.96% | S | ||
| INTC | 458140100 | INTEL CORP | (4,862.00) | 53.72 | (261,186.64) | -0.96% | S | ||
| DISCA | 25470F104 | DISCOVERY INC - A | (8,998.00) | 29.01 | (261,031.98) | -0.96% | S | ||
| NBIX | 64125C109 | NEUROCRINE BIOSCIENCES INC | (2,781.00) | 93.21 | (259,217.01) | -0.95% | S | ||
| EXEL | 30161Q104 | EXELIXIS INC | (15,355.00) | 16.85 | (258,731.75) | -0.95% | S | ||
| NI | 65473P105 | NISOURCE INC | (10,440.00) | 24.77 | (258,598.80) | -0.95% | S | ||
| OGE | 670837103 | OGE ENERGY CORP | (7,651.00) | 33.75 | (258,221.25) | -0.94% | S | ||
| CMS | 125896100 | CMS ENERGY CORP | (4,168.00) | 61.79 | (257,540.72) | -0.94% | S | ||
| FLT | 339041105 | FLEETCOR TECHNOLOGIES INC | (996.00) | 258.22 | (257,187.12) | -0.94% | S | ||
| KAR | 48238T109 | KAR AUCTION SERVICES INC | (15,605.00) | 16.48 | (257,170.40) | -0.94% | S | ||
| EXAS | 30063P105 | EXACT SCIENCES CORP | (2,377.00) | 107.84 | (256,335.68) | -0.94% | S | ||
| CHE | 16359R103 | CHEMED CORP | (538.00) | 476.02 | (256,098.76) | -0.94% | S | ||
| MSGS | 55825T103 | MADISON SQUARE GARDEN SPORTS | (1,563.00) | 162.74 | (254,362.62) | -0.93% | S | ||
| ERIE | 29530P102 | ERIE INDEMNITY COMPANY-CL A | (1,375.00) | 184.89 | (254,223.75) | -0.93% | S | ||
| MKC | 579780206 | MCCORMICK & CO-NON VTG SHRS | (2,959.00) | 84.17 | (249,059.03) | -0.91% | S | ||
| VZ | 92343V104 | VERIZON COMMUNICATIONS INC | (4,437.00) | 55.78 | (247,495.86) | -0.91% | S | ||
| FLO | 343498101 | FLOWERS FOODS INC | (10,470.00) | 23.56 | (246,673.20) | -0.90% | S | ||
| BLUE | 09609G100 | BLUEBIRD BIO INC | (9,667.00) | 25.41 | (245,638.47) | -0.90% | S | ||
| GIS | 370334104 | GENERAL MILLS INC | (4,167.00) | 58.86 | (245,269.62) | -0.90% | S | ||
| VRTX | 92532F100 | VERTEX PHARMACEUTICALS INC | (1,199.00) | 201.58 | (241,694.42) | -0.88% | S | ||
| ED | 209115104 | CONSOLIDATED EDISON INC | (3,269.00) | 73.77 | (241,154.13) | -0.88% | S | ||
| INCY | 45337C102 | INCYTE CORP | (3,114.00) | 77.35 | (240,867.90) | -0.88% | S | ||
| D | 25746U109 | DOMINION ENERGY INC | (3,213.00) | 74.87 | (240,557.31) | -0.88% | S | ||
| ALSN | 01973R101 | ALLISON TRANSMISSION HOLDING | (6,006.00) | 39.91 | (239,699.46) | -0.88% | S | ||
| NKTR | 640268108 | NEKTAR THERAPEUTICS | (14,947.00) | 15.79 | (236,013.13) | -0.86% | S | ||
| RGLD | 780287108 | ROYAL GOLD INC | (1,919.00) | 121.52 | (233,196.88) | -0.85% | S | ||
| CLX | 189054109 | CLOROX COMPANY | (1,289.00) | 180.89 | (233,167.21) | -0.85% | S | ||
| GILD | 375558103 | GILEAD SCIENCES INC | (3,329.00) | 68.29 | (227,337.41) | -0.83% | S | ||
| RNR | G7496G103 | RENAISSANCERE HOLDINGS LTD | (1,484.00) | 152.69 | (226,591.96) | -0.83% | FS | ||
| BDX | 075887109 | BECTON DICKINSON AND CO | (885.00) | 255.75 | (226,338.75) | -0.83% | S | ||
| MRK | 58933Y105 | MERCK & CO. INC. | (2,862.00) | 76.87 | (220,001.94) | -0.80% | S | ||
| CPB | 134429109 | CAMPBELL SOUP CO | (5,031.00) | 43.72 | (219,955.32) | -0.80% | S | ||
| BAX | 071813109 | BAXTER INTERNATIONAL INC | (2,831.00) | 77.35 | (218,977.85) | -0.80% | S | ||
| LVS | 517834107 | LAS VEGAS SANDS CORP | (5,159.00) | 42.35 | (218,483.65) | -0.80% | S | ||
| TREE | 52603B107 | LENDINGTREE INC | (1,116.00) | 195.22 | (217,865.52) | -0.80% | S | ||
| COG | 127097103 | CABOT OIL & GAS CORP | (13,604.00) | 16.00 | (217,664.00) | -0.80% | S | ||
| IONS | 462222100 | IONIS PHARMACEUTICALS INC | (5,794.00) | 37.14 | (215,189.16) | -0.79% | S | ||
| HRL | 440452100 | HORMEL FOODS CORP | (4,617.00) | 46.38 | (214,136.46) | -0.78% | S | ||
| BMRN | 09061G101 | BIOMARIN PHARMACEUTICAL INC | (2,735.00) | 76.73 | (209,856.55) | -0.77% | S | ||
| SRPT | 803607100 | SAREPTA THERAPEUTICS INC | (2,971.00) | 67.78 | (201,374.38) | -0.74% | S | ||
| OXY/WS | 674599162 | OCCIDENTAL PETE WT | (8,342.00) | 10.73 | (89,509.66) | -0.33% | W | ||
| OGN | 68622V106 | ORGANON & CO | (250.00) | 29.01 | (7,252.50) | -0.03% | S | ||
| HOLD | 00768Y651 | ADVISORSHARES SAGE CORE RESE | 100,000.00 | 98.64 | 9,864,000.00 | 36.09% | MF | ||
| CASH | 17,934,460.65 | 100.00 | 17,934,460.65 | 65.61% | CA | ||||
| X9USDISLQ | INVESCO GOVT AGENCY INSTL 1901 | 25,776,579.32 | 1.00 | 25,776,579.32 | 94.31% | MM |
FUND
Characteristics
As of 6/30/2021
DWSH Performance During Market Drawdowns
DWSH Sector Change
DWSH Sector Allocation
DWSH Market Cap
FUND
Documents
FUND
Fees & Expenses
| Management Fee | 0.75% |
| Other Expenses | 2.81% |
| Acquired Fund Fees | 0.11% |
| Gross Expenses Ratio | 3.67% |
| Net Expense Ratio | 3.67% |
Advisor has contractually agreed to reduce its fees and/or reimburse expenses to keep net expenses (excluding amounts payable pursuant to any plan adopted in accordance with Rule 12b-1, interest expense, taxes, brokerage commissions, acquired fund fees and expenses, other expenditures which are capitalized in accordance with generally accepted accounting principles, and extraordinary expenses) from exceeding 1.25% of the Fund’s average daily net assets for at least one year from the date of the Prospectus. “Other Expenses” is comprised of 1.71% is short interest expense and 0.80% in remaining expenses.
Last Ten
Fund Distributions
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- 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 the Fund’s website at 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. Short sales are transactions in which the Fund sells a security it does not own. To complete the transaction, the Fund must borrow the security to make delivery to the buyer. The Fund is then obligated to replace the security borrowed by purchasing the security at the market price at the time of replacement. If the underlying security goes down in price between the time the Fund sells the security and buys it back, the Fund will realize a gain on the transaction. Conversely, if the underlying security goes up in price during the period, the Fund will realize a loss on the transaction. Any such loss is increased by the amount of premium or interest the Fund must pay to the lender of the security. Likewise, any gain will be decreased by the amount of premium or interest the Fund must pay to the lender of the security. Because a short position loses value as the security’s price increases, the loss on a short sale is theoretically unlimited. Short sales involve leverage because the Fund borrows securities and then sells them, effectively leveraging its assets. The use of leverage may magnify gains or losses for the Fund. As with any fund, there is no guarantee that the Fund will achieve its investment objective.
Definitions
Alpha: One of the most commonly quoted indicators of investment performance, alpha, is defined as the excess return on an investment relative to the return on a benchmark index.
Short: A short, or a short position, is created when a trader sells a security first with the intention of repurchasing it or covering it later at a lower price.
- 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 the Fund’s website at 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. Short sales are transactions in which the Fund sells a security it does not own. To complete the transaction, the Fund must borrow the security to make delivery to the buyer. The Fund is then obligated to replace the security borrowed by purchasing the security at the market price at the time of replacement. If the underlying security goes down in price between the time the Fund sells the security and buys it back, the Fund will realize a gain on the transaction. Conversely, if the underlying security goes up in price during the period, the Fund will realize a loss on the transaction. Any such loss is increased by the amount of premium or interest the Fund must pay to the lender of the security. Likewise, any gain will be decreased by the amount of premium or interest the Fund must pay to the lender of the security. Because a short position loses value as the security’s price increases, the loss on a short sale is theoretically unlimited. Short sales involve leverage because the Fund borrows securities and then sells them, effectively leveraging its assets. The use of leverage may magnify gains or losses for the Fund. As with any fund, there is no guarantee that the Fund will achieve its investment objective.