WHEATON, IL--(Marketwired - Sep 21, 2016) - Elkhorn Investments, LLC, a pioneer of research-based investing, announced today the launch of the Elkhorn Commodity Rotation Strategy ETF (DWAC). DWAC is the first commodity exchange-traded fund (ETF) based on Dorsey, Wright & Associates (DWA), a Nasdaq Company's, proprietary Relative Strength methodology.
"This is not only the first Dorsey, Wright & Associates-based commodity ETF, but also the first purely tactical commodity ETF in the marketplace," said Ben Fulton, Founder and CEO of Elkhorn. "Investors looking for a highly selective portfolio of commodities now have a solution."
The Elkhorn Commodity Rotation Strategy ETF's commodity exposure is based on a model developed by DWA using their proprietary Relative Strength methodology. The Model evaluates a universe of 21 commodities and provides equal-weighted exposure to the five commodities exhibiting the highest relative strength. The ETF also utilizes an intelligent roll strategy to mitigate the potential negative impact of contango, and invests in a short duration portfolio of highly liquid, high quality bonds.
"I have long been a believer in tactical opportunities within the commodity market," said Tom Dorsey, Founder of Dorsey Wright & Associates, a Nasdaq Company. "We have built commodity-based models for decades, yet this is the first ETF based on our commodity research. For investors unsure of how to invest in commodities, DWAC's strategy gives investors dynamic exposure to the commodity marketplace."
Individual commodities often have unique market cycles, creating an environment where wide dispersions exist across the commodity complex. The tactical nature of DWAC offers investors exposure to the highest relative strength commodities (as evaluated on a monthly basis) as opposed to owning an entire universe of commodities. Additionally, investors will receive a 1099 tax form as opposed to the K-1 forms often associated with commodity ETFs.
This is one of two actively-managed, commodity-based ETFs that Elkhorn is launching today. The second being the Elkhorn Fundamental Commodity Strategy ETF (RCOM). The launch of DWAC adds to Elkhorn's diverse ETF lineup, which includes the recently launched investment grade only Elkhorn S&P High Quality Preferred ETF (EPRF).
Founded in 2013 by Ben Fulton, a recognized leader and pioneer of the ETF industry, Elkhorn is redefining the relationship between investment strategy and product structure: designing, sponsoring and distributing innovative, research-based investments solutions. At Elkhorn, research drives design and advisors drive structural decisions. Elkhorn has a strategic relationship with Barclays which has increased the capacity of investment solutions offered by Elkhorn. To learn more about Elkhorn please visit www.elkhorn.com.
About Dorsey, Wright & Associates (DWA), a Nasdaq Company
Dorsey, Wright & Associates (DWA), a Nasdaq Company, is a registered investment advisory firm based in Richmond, Virginia. DWA was acquired by Nasdaq (NASDAQ: NDAQ) last year and the combined group represents one of the largest providers of smart beta indexes with nearly $49.7 billion in assets tracking Nasdaq Indexes. DWA and Nasdaq develop innovative products across a myriad of asset classes and strive to create more opportunities for financial advisors. Since 1987, DWA has been an advisor to financial professionals on Wall Street and investment managers worldwide. The company offers comprehensive investment research and analysis through their Global Technical Research Platform and provides research, modeling and indexes which apply DWA's expertise in Relative Strength for use in various financial products including exchange trade funds, mutual funds, UITs, structured products, and separately managed accounts. To take a free trial of the platform, visit here.
There are risks involved with investing in ETFs, including possible loss of money. The fund is actively managed. Shares are subject to risks similar to those of stocks, including those regarding short selling and margin maintenance requirements. Ordinary brokerage commissions apply. There can be no assurance that the fund's investment objective will be achieved.
The fund seeks to provide investors with total return. Because the fund is non-diversified and can invest a greater portion of its assets in securities of individual issuers than a diversified fund, changes in the market value of a single investment could cause greater fluctuations in share price than would occur in a diversified fund. The fund may invest in commodity futures contracts traded on non-U.S. exchanges or enter into over the-counter derivative contracts with non-U.S. counterparties. The fund is subject to counterparty risk, options risk, pooled investment vehicle risk, swaps risk and more.
The roll strategy seeks to select the commodity futures contract with the highest roll yield, subject to certain liquidity thresholds. Duration is a measure of the sensitivity of the price of a fixed-income investment to a change in interest rates. Contango is a situation where the futures price of a commodity is above the expected future spot price.
The relative strength strategy is NOT a guarantee. There may be times where all investments and strategies are unfavorable and depreciate in value. Relative Strength is not predictive and there is no assurance that forecasts based on relative strength can be relied upon.
Shares are not individually redeemable and owners of the shares may acquire those shares from the Fund and tender those shares for redemption to the Fund in Creation Units only, typically consisting of 50,000 Shares.
ALPS Distributors, Inc. is the distributor of Elkhorn exchange-traded funds.
Elkhorn Investments, LLC, Dorsey Wright & Associates, a Nasdaq Company, and ALPS Distributors, Inc. are not affiliated with each other.
An investor should consider the investment objectives, risks, charges and expenses of the Fund carefully before investing. To obtain a prospectus containing this and other information, please call 630.384.8700. Read the prospectus carefully before investing.