AdvisorShares Dorsey Wright FSM All Cap World ETF (DWAW) seeks to track global equity markets using the Dorsey Wright FSM All Cap World Index, which applies momentum-based relative strength analysis to select outperforming stocks across developed and emerging markets worldwide.
How It Works
DWAW employs an actively managed approach using Dorsey Wright's proprietary relative strength methodology to identify stocks showing superior price momentum across global markets. The strategy ranks securities based on technical indicators and momentum signals, concentrating holdings in companies demonstrating the strongest relative performance trends. Portfolio composition and weightings adjust based on ongoing momentum analysis rather than market capitalization, with rebalancing occurring as momentum signals change.
Key Features
- Applies momentum-based stock selection globally, potentially capturing outperforming equities across developed and emerging markets using technical analysis
- Actively managed strategy allows for tactical positioning based on relative strength signals rather than passive index tracking
- Zero expense ratio structure makes this momentum strategy accessible without typical active management fees
Risks
- This ETF can lose value when momentum strategies fail during market reversals, as previously strong stocks may underperform significantly
- Active management decisions based on technical analysis may result in concentrated positions that amplify losses during adverse market conditions
- Global equity exposure means losses during worldwide market downturns, potentially declining 40-50% in severe bear markets across multiple regions
Who Should Own This
Best suited for tactical satellite positions (5-15% of equity allocation) for investors with high risk tolerance and 1-3 year time horizons seeking momentum exposure. Appropriate for sophisticated investors comfortable with active management volatility and global market risks who want alternative factor exposure.