Despite its impressive action in the face of market turmoil, WDTI must still be monitored. Because it is set up to rebalance on a monthly timetable, the fund faces the risk of missing out in the event of a mid-month market turnaround. Evidence of this challenge can be found by looking at the fund's performance compared to DBC over the past week.
While DBC has managed to power higher in light of the market's recent spurt of strength, WDTI's performance has been muddled.
Given its current index weighting, WDTI appears to have taken the correct bets given the current market environment marked by pressing macro concerns and growth doubts. Investors confident that the past few days of strength will translate into a long-term upward trend may want to hold off on jumping into WDTI until we can see what the next rebalance brings.
Written by Don Dion in Williamstown, Mass.