DWTR: new Tactical Sector Rotation ETF by PowerShares

Invesco PowerShares Capital Management, LLC, begun trading the PowerShares DWA Tactical Sector Rotation Portfolio (Nasdaq: DWTR) on Friday, October 9, 2015.



Symbol: DWTR    Exchange: NASDAQ
Name: PowerShares DWA Tactical Sector Rotation Portfolio Net Expense Ratio: 0.75%


The PowerShares DWA Tactical Sector Rotation Portfolio seeks investment results that generally correspond (before fees and expenses) to the price and yield of the Dorsey Wright Sector 4 Index.


The Dorsey Wright Sector 4 Index is composed of up to 4 PowerShares ETFs from an eligible universe of 9 PowerShares ETFs, each of which is designed to seek to track separate sector-specific underlying indexes. Each PowerShares ETF’s underlying index also is compiled and maintained by the Index Provider. The PowerShares ETFs that are eligible for inclusion in the Underlying Index represent the 9 macroeconomic sectors of the U.S. equity markets:
PowerShares DWA Basic Materials Momentum Portfolio, PowerShares DWA Consumer Cyclicals Momentum Portfolio, PowerShares DWA Consumer Staples Momentum Portfolio, PowerShares DWA Energy Momentum Portfolio, PowerShares DWA Financial Momentum Portfolio, PowerShares DWA Healthcare Momentum Portfolio, PowerShares DWA Industrials Momentum Portfolio, PowerShares DWA Technology Momentum Portfolio and PowerShares DWA Utilities Momentum Portfolio.

The Underlying Index seeks to gain exposure to the sectors of the U.S. equity markets that display the strongest relative strength, as evaluated on a monthly basis. “Relative strength” is the measurement of a security’s performance in a given universe as compared to the performance of all other securities in that universe. Therefore, at any given time, the components of the Underlying Index are those PowerShares ETFs that the Index Provider believes offer the greatest potential to outperform each other eligible PowerShares ETF.

Using its proprietary methodology, the Index Provider calculates the relative strength of each economic sector by analyzing the monthly change in prices of securities within each sector in the equity markets, and then ranks each sector by the strongest increase in prices during that period as compared with the other sectors. The Underlying Index is composed of up to 4 eligible PowerShares ETFs that invest in the representative economic sectors that have the highest relative strength ranking.

The Underlying Index is equal weighted, with each constituent PowerShares ETF representing 25% of its weight. However, during market periods when fewer than 4 eligible PowerShares ETFs demonstrate sufficient relative strength (that is, when most sectors represented by the PowerShares ETFs are out of favor), the Underlying Index will hold a cash position, represented by 1- to 6-month U.S. Treasury Bills, in an amount equal to the weight of the missing PowerShares ETF(s) (for example, at times when, pursuant to its methodology, the Underlying Index only holds two PowerShares ETFs, it will invest 50% of its weight in Treasury Bills). During periods when equity securities as a whole are out of favor, the Underlying Index may hold a 100% cash position. The Index Provider evaluates the Underlying Index constituents monthly and Underlying Index changes are transacted using a replacement method (an Underlying Index constituent that represents a sector that has fallen out of favor is replaced by the PowerShares ETF representing a sector demonstrating relative strength), and the Underlying Index is rebalanced only when a position drifts materially from its targeted equal-weight allocation. The Fund generally invests in each constituent PowerShares ETF comprising the Underlying Index in proportion to its weighting in the Underlying Index.


Holdings (10/13/2015):

PowerShares DWA Consumer Staples Momentum Portfolio (PSL) 28.14%
PowerShares DWA Consumer Cyclicals Momentum Portfolio (PEZ) 26.78%
PowerShares DWA Healthcare Momentum Portfolio (PTH) 23.73%
PowerShares DWA Technology Momentum Portfolio (PTF) 21.35%


Useful Links:
DWTR Home Page



Category: Equities> Regions> USA> US Sectors/Industries> US Sector Strategy

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