DWAS: A Small-Cap Momentum Fund Lagging Peers
The Invesco Dorsey Wright SmallCap Momentum ETF has a strong growth profile but has underperformed other small-cap momentum funds like XSMO and USVM since 2021. DWAS focuses on U.S. small-cap companies with strong relative performance, heavily weighted towards industrials and technology sectors, and has a high turnover rate. Despite outperforming the Russell 2000 index over time, DWAS has higher volatility, lower liquidity, and higher expense ratios compared to peer funds.
DWAS: Excessively Risky SMID Strategy With Bleak Returns
DWAS offers exposure to small- and mid-cap names with convincing momentum characteristics. Yet, its strategy of capitalizing on SMID stocks that were on a tear did not translate into meaningful and consistent outperformance in the past. Its historical risk-adjusted returns are much weaker than those of IVV and IJR, owing to its volatility, which, in turn, is likely influenced by soft quality.
3 Small-Cap Growth ETFs With Standout Long-Term Performance
Rate cuts are coming, it seems, with the U.S. economy slowing down precipitously in July. Market watchers are increasingly seeing a potential 50 basis point (bps) cut in September with potentially even more cuts after that.
DWAS: High-Risk/High-Reward Small-Cap ETF
Invesco Dorsey Wright SmallCap Momentum ETF holds 199 small caps selected and weighted based on a proprietary momentum score. The DWAS ETF is overweight in industrials and healthcare, but well-diversified across holdings. Based on quality metrics and price history, DWAS has a high-risk/high-reward profile.
