How does the DWAS ETF work?
4 min read
By Beqa Bumbeishvili, ETF Insider

How does the DWAS ETF work?

In the fast-paced financial market, ETFs (Exchange Traded Funds) have carved a niche for themselves among both new and seasoned investors. One such ETF garnering attention is the DWAS ETF. In essence, DWAS ETF is a fund that provides investors with an opportunity to invest in an extensive portfolio of small-cap companies in the U.S with a potential for growth.

DWAS ETF: Overview

The DWAS ETF, or Invesco DWA SmallCap Momentum ETF, aims to replicate, before fees and expenses, the performance of the DWA SmallCap Momentum Index. This index primarily focuses on small-cap companies which are exhibiting certain momentum characteristics. The ETF tracks around 200 companies, providing a diversified exposure to investors who are keen on exploring the small-cap segment of the market.

DWAS ETF: Underlying and Exposure: What Does It Track and How?

The core of DWAS ETF lies in its tracking of the DWA SmallCap Momentum Index. This Index is grounded on the Dorsey Wright's proprietary Relative Strength Ranking system, which identifies small-cap companies exhibiting relative strength (momentum). Through a systematic and transparent approach, the DWAS ETF offers a chance to investors to tap into the potential growth and capital appreciation that comes with these momentum-driven small-cap companies.

DWAS overlap How does work the DWAS ETF?DWAS overlap How does work the DWAS ETF?

DWAS ETF: Benefits of Investing

Investing in the DWAS ETF comes with a slew of benefits. For starters, it provides a level of diversification by allowing investors to have a stake in over 200 different small-cap companies, which could potentially lead to lower risk compared to investing in individual stocks. Moreover, the ETF’s focus on momentum investing means it targets companies that are on an upward trajectory, which can lead to significant gains if the trend continues. Furthermore, the relatively low expense ratio makes the DWAS ETF an attractive option for those looking to explore the small-cap segment without a hefty investment.

DWAS ETF: Considerations Before Investing

However, like with any investment, there are considerations to bear in mind before diving into the DWAS ETF. The inherent volatility of small-cap stocks could lead to a higher risk, especially in a bear market. Also, the fund's focus on momentum investing could backfire if the chosen companies lose their momentum, impacting the overall performance of the ETF. Lastly, it's essential to understand that past performance is not indicative of future results, hence a thorough understanding of the DWAS ETF and its underlying index, as well as a clear risk-assessment, is crucial before making an investment decision.


The DWAS ETF is a promising avenue for investors seeking to diversify their portfolio and explore the small-cap market segment. Its design to track momentum within the small-cap realm can potentially offer lucrative returns. However, an understanding of the inherent risks and a well-thought-out investment strategy is crucial to make the most out of the DWAS ETF investment. With the right approach, investing in the DWAS ETF could be a step towards achieving financial growth and stability in the modern financial landscape.

Invesco DWA SmallCap Momentum ETF official website
Dorsey Wright’s Relative Strength Ranking system overview
Various Financial analysis reports on small-cap momentum investing and ETFs.

DWAS ETF issuer
DWAS ETF official page

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  • What is the DWAS ETF?

    The DWAS ETF is an exchange-traded fund that provides investors with exposure to a specific sector.

  • What is the underlying index that the DWAS ETF aims to track?

    The DWAS ETF aims to track the performance of a specific index, which includes companies involved in its respective sector.

  • What types of companies are included in the DWAS ETF?

    The DWAS ETF includes companies from its focused industry.

  • How does the DWAS ETF work?

    The DWAS ETF functions by pooling investors' capital to purchase a diversified portfolio of sector-related stocks.

  • What are the advantages of investing in the DWAS ETF?

    Investing in the DWAS ETF offers exposure to a specialized sector with potential for growth.