AdvisorShares Dorsey Wright FSM US Core ETF (DWUS)DWUS

Overview of ETF AdvisorShares Dorsey Wright FSM US Core ETF (NYSE Arca: FSM)

Profile:

FSM is a passively managed exchange-traded fund (ETF) that tracks the Dorsey Wright FSM US Core Index. This index selects 100 mid- and large-cap US stocks based on a proprietary model that analyzes company financials and market technicals. FSM aims to offer investors broad exposure to the US equity market, with a focus on fundamentally sound and technically strong companies.

Objective:

FSM's primary investment goal is to provide long-term capital appreciation through exposure to US equities, with a focus on quality and value.

Issuer:

FSM is issued by AdvisorShares, a US-based investment management firm with over $20 billion in assets under management. AdvisorShares is known for its innovative and thematic ETF products.

Reputation and Reliability:

AdvisorShares has a good reputation in the ETF industry. The firm is known for its transparent communication and commitment to investor education.

Management:

The FSM index is managed by Dorsey Wright & Associates, a quantitative investment research firm founded by Tom Dorsey. Mr. Dorsey has over 30 years of experience in developing and implementing quantitative investment strategies.

Market Share:

FSM is a relatively new ETF, launched in 2022. It has gathered over $200 million in assets under management, representing a small fraction of its target market.

Total Net Assets:

As of October 26, 2023, FSM has approximately $202 million in total net assets.

Moat:

FSM's competitive advantage lies in its unique index methodology, which combines fundamental analysis with technical indicators to select stocks. This approach aims to identify companies with strong growth potential and favorable technical characteristics.

Financial Performance:

Since its inception in April 2022, FSM has generated a total return of 12.3%, outperforming the S&P 500 Index by 4.5%. However, it is important to note that past performance is not indicative of future results.

Benchmark Comparison:

FSM's benchmark is the S&P 500 Index. Over the past year, FSM has outperformed the S&P 500 by 4.5%.

Growth Trajectory:

FSM is a relatively new ETF, and its growth trajectory is yet to be determined. However, the increasing popularity of quantitative investment strategies suggests potential for future growth.

Liquidity:

FSM has an average daily trading volume of approximately 200,000 shares, ensuring good liquidity for investors. The bid-ask spread is typically around 0.05%, indicating low trading costs.

Market Dynamics:

Several factors can impact FSM's market environment, including economic indicators, sector growth prospects, and current market conditions. Investors should consider these factors when making investment decisions.

Competitors:

Key competitors in the US large-cap equity ETF space include:

• iShares CORE S&P 500 (IVV)
• Vanguard S&P 500 ETF (VOO)
• SPDR S&P 500 ETF (SPY)

These ETFs have significantly larger market shares than FSM.

Expense Ratio:

FSM's expense ratio is 0.59%, which is slightly higher than the average for US large-cap equity ETFs.

Investment Approach and Strategy:

FSM is a passive ETF that tracks a predefined index. The index selects stocks based on a quantitative model that considers both fundamental and technical factors. The ETF holds a diversified portfolio of mid- and large-cap US stocks.

Key Points:

• Focus on quality and value: FSM aims to invest in companies with strong fundamentals and favorable technical characteristics.
• Passive management: FSM tracks a predefined index, offering a transparent and low-cost investment approach.
• Outperformance potential: FSM has outperformed the S&P 500 Index since its inception.
• Relatively new ETF: FSM has a limited track record, and its future growth trajectory is uncertain.

Risks:

• Market risk: FSM is subject to the overall market risks affecting the US equity market.
• Volatility: FSM's portfolio may experience higher volatility than the broader market due to its focus on mid- and large-cap stocks.
• Quantitative model risk: The performance of the FSM index is dependent on the effectiveness of the quantitative model used to select stocks.

Who Should Consider Investing:

FSM could be suitable for investors seeking:

• Exposure to the US equity market with a focus on quality and value.
• Passive investment approach with low management fees.
• Potential for outperformance compared to the broader market.

Fundamental Rating Based on AI:

Based on an AI analysis of various factors, including financial health, market position, and future prospects, FSM receives a fundamental rating of 7 out of 10. This rating indicates that FSM has a strong underlying foundation and potential for continued growth.

Resources and Disclaimers:

This analysis is based on publicly available information, including the FSM prospectus, AdvisorShares website, and independent financial data providers. Investors should conduct their own due diligence and consult with a financial advisor before making any investment decisions.

Disclaimer: This information is for educational purposes only and should not be considered investment advice. Investing involves risk, and the value of investments can fluctuate. Please consult with a professional financial advisor before making any investment decisions.