WisdomTree Announces U.S. Domestic Economy Fund (WUSA) and U.S. Export and Multinational Fund (WEXP)
March 17 2017 - 9:00AM
Formerly WisdomTree Strong Dollar U.S. Equity
Fund (USSD) and WisdomTree Weak Dollar U.S. Equity Fund
(USWD)
WisdomTree (NASDAQ:WETF), an exchange-traded fund (“ETF”) and
exchange-traded product (“ETP”) sponsor and asset manager, today
announced the implementation of changes for the WisdomTree Strong
Dollar U.S. Equity Fund (USSD) and the WisdomTree Weak Dollar U.S.
Equity Fund (USWD) to be renamed the WisdomTree U.S. Domestic
Economy Fund (WUSA) and the WisdomTree U.S. Export and
Multinational Fund (WEXP), respectively.
- WUSA seeks to provide exposure to profitable companies that
generate the majority of their revenue from within the U.S. and has
an expense ratio of 0.33%.
- WEXP seeks to provide exposure to profitable companies that
generate the majority of their revenue from outside of the U.S. and
has an expense ratio of 0.33%.
Lower Tax Rates = Big Earnings Growth
Jeremy Schwartz, WisdomTree Director of Research, said, “The
U.S. equity markets are being supported by policies outlined by the
new presidential administration under Donald Trump. This includes
three areas of focus: corporate tax cuts improving profits,
infrastructure enhancements supporting economic growth, and lower
regulatory hurdles and costs.”
Corporate tax cuts were a focal point of Donald Trump’s
campaign, and lowering them is among his top priorities in his
early days as President. This has been perhaps the most important
factor driving the U.S. market. For companies, this means more
after-tax earnings that can be reinvested or distributed to
shareholders—and, importantly, an improvement in valuation ratios
that many think look extended under present circumstances.
Typically, U.S. companies that generate the majority of their
revenue from within the U.S. are subject to a higher tax rate and
may benefit more substantially than multi-nationals from a tax cut
or reform. The more earnings (and taxes paid) that come from the
U.S., the greater the earnings growth could be from a tax cut.
Therefore, Indexes with a higher percentage of profitable
companies—and thus companies that pay more U.S. taxes—potentially
stand to benefit more than indexes with more unprofitable companies
or those with more foreign revenue. This would argue that on an
earnings growth front—companies in WUSA are poised to gain more
incremental earnings from tax cuts than companies in WEXP.
Schwartz continued, “WUSA and WEXP are timely strategies that
tie into Trump’s corporate tax reforms. On the domestic economy
side and relevant to the ETF WUSA, any Trump or monetary policy
changes that result in a stronger U.S. dollar – like a movement
towards some form of a border adjustment tax (BAT) – would likely
be supportive for companies that have more revenue from the U.S.
and less revenue abroad. This exposure is accomplished by screening
for companies that have revenue primarily from the U.S.
On the multi-national side, for the ETF WEXP—companies with
global operations—there is current tax policy discussion around
lower cash repatriation taxes that should bring cash back to the
U.S. from their overseas operations and support dividend and
buyback growth for these companies.
Moreover, in addition to tracking WisdomTree’s tried-and-true
earnings-weighted methodology, we believe WUSA and WEXP’s revenue
exposure screens and weight tilts can provide more targeted
exposures to these two investment themes of a focus on the U.S.
domestic economy names versus multi-nationals.”
Effective today, the WisdomTree Europe Local Recovery Fund
(EZR), will be renamed the WisdomTree Europe Domestic Economy Fund
(EDOM). The Fund remains listed on the BATS Exchange with a net
expense ratio of 0.48%1.
1 The Net Expense Ratio reflects a contractual waiver of
0.10% through October 31, 2017.
About WisdomTree
WisdomTree Investments, Inc., through its subsidiaries in the
U.S., Europe, Japan and Canada (collectively, “WisdomTree”), is an
exchange-traded fund (“ETF”) and exchange-traded product (“ETP”)
sponsor and asset manager headquartered in New York.
WisdomTree offers products covering equities, fixed income,
currencies, commodities and alternative strategies.
WisdomTree currently has approximately $43.4 billion in assets
under management globally. For more information, please visit
www.wisdomtree.com or follow us on Twitter @WisdomTreeETFs.
WisdomTree® is the marketing name for WisdomTree Investments,
Inc. and its subsidiaries worldwide.
Investors should consider the investment objectives,
risks, charges and expenses of the funds carefully before
investing. A prospectus, containing this and other information is
available by calling 1-866-909-WISE. Investors should read the
prospectus carefully before investing.
There are risks involved with investing, including possible loss
of principal. Foreign investing involves currency, political
and economic risk. Funds focusing on a single country and/or
sector may experience greater price volatility. Investments
in emerging markets, currency, fixed income and alternative
investments include additional risks. Due to the investment
strategy of certain Funds they may make higher capital gain
distributions than other ETFs. Please see prospectus for
discussion of risks.
Jeremy Schwartz is a registered representative of Foreside Fund
Services, LLC. WisdomTree Funds are distributed by Foreside Fund
Services, LLC, in the U.S. only.
WTPR-0072
Contact Information
Media Relations:
Jessica Zaloom
+1.917.267.3735
jzaloom@wisdomtree.com
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