Invesco PowerShares’ small-cap momentum ETF delivers strong first year

Jul 26th, 2013 | By | Category: Equities

Invesco PowerShares, a leading global provider of exchange-traded funds (ETFs), has celebrated the one-year anniversary of the PowerShares DWA SmallCap Technical Leaders Portfolio (DWAS).

Invesco PowerShares’ small-cap momentum ETF delivers strong first year

Tom Dorsey, President of Dorsey, Wright & Associates, the creators of the DWA Technical Leaders methodology.

Since inception on July 19 last year, the ETF, which is part of a broad suite of DWA Technical Leaders ETFs, has outperformed the Russell 2000 Index market-cap weighted benchmark by a margin of 9.44%, achieving a total return of 41.84% over the one-year period compared to 32.40% for the Russell 2000.

The NYSE Arca-listed fund is linked to the Dorsey Wright SmallCap Technical Leaders Index, a proprietary index designed to identify companies that possess strong relative-strength characteristics compared to their peers and industry benchmarks. These companies are known as ‘Technical Leaders’.

Relative strength is a quantitative measure of a stock’s performance in relation to the rest of the market. Numerous studies have demonstrated that relative strength, which reflects a stock’s momentum, may be a powerful tool for stock selection.

The index includes approximately 200 companies from a small-cap universe of approximately 2,000 of the smallest US companies. Major holdings include Jazz Pharmaceuticals, Virtus Investment Partners, Conn’s, KapStone Paper and Packaging Corp and Pier 1 Imports.

Andrew Schlossberg, head of global ETFs at PowerShares, said: “The PowerShares DWA SmallCap Technical Leaders Portfolio (DWAS) is the small-cap complement to the PowerShares DWA Technical Leaders Portfolio (PDP). Together with the PowerShares DWA Emerging Markets Technical Leaders Portfolio (PIE), and PowerShares DWA Developed Markets Technical Leaders Portfolio (PIZ) investors can efficiently tap the alpha-seeking potential of momentum factor-based ETFs globally.”

He added: “As the leading provider in smart beta ETFs, we see a lot of potential for focused factor-based strategies to help investors achieve their goals, whether it’s seeking to enhance returns, reduce risk, or both.”

Tom Dorsey, president and CEO of Dorsey, Wright & Associates, said: “We are proud to partner with Invesco PowerShares on momentum factor–based ETFs, and look forward to a long lasting relationship as we expand our global presence.”

The fund has more than $260 million in assets and comes with an expense ratio of 0.61%.

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