Seasonal FSM models have been updated; one of those is the DWAW ETF that is based on the CoreSolution All Cap World model.

The seasonal FSM models were evaluated based on market data through the close of Monday, Nov. 2nd, with model alerts sent out Tuesday morning, Nov. 3rd.  These models have been updated with new holdings and rebalanced to their target weights.  To see all of the FSM model changes, visit our model listing page and select FSM under Methodology and New Activities under the filter section.  While there, be sure to click on the bell icon for any models you wish to receive alerts and stay up to date when any changes are made in the future.

One of the changes we would like to highlight today is in the AdvisorShares Dorsey Wright FSM All Cap World ETF DWAW, which is based on the FSM CoreSolution All Cap World 2S PR4050 model.  The strategy selects the first and second-ranked ETFs from a list of highly liquid, core based-funds including size and style ETFs, both domestic and international.  However, the manner in which the ETF will raise cash is different.  While the FSM model reviews the PR4050 offense/defense indicator on a monthly basis, the strategy for DWAW reviews the indicator weekly.  If triggered, the strategy incrementally increases or decreases cash exposure by scaling into a defensive or offensive allocation (Source: AdvisorShares).

With this quarter’s evaluation, the Invesco QQQ Trust QQQ was sold and the iShares Morningstar Small Growth ETF JKK was bought.  The current allocation is 50% in the iShares MorningStar Mid Growth ETF JKH and 50% in the iShares MorningStar Small Growth ETF JKK.

On a year-to-date basis as well as fund inception, both the model and model-based ETF have outperformed their benchmarks as shown below.  On a technical basis, DWAW currently possesses a strong fund score of 4.20, which is above our optimal threshold.