WisdomTree (NASDAQ: WETF), an exchange-traded fund (“ETF”) and
exchange-traded product (“ETP”) sponsor and asset manager, today
announced various enhancements to the WisdomTree Modern Tech
Platforms Fund (PLAT), whose name has been changed to the
WisdomTree Growth Leaders Fund (PLAT).
Growth Exposure Through a Dominant Business Model – More
than the FAANGs1
“Platform companies are transforming business and the
enhancements we’ve made to PLAT better position the fund in the
important growth category,” said Jeremy Schwartz, Global Head of
Research at WisdomTree. “PLAT will continue to seek to provide
exposure to high growth, mid and large market capitalization
companies – more than the typical FAANG stocks – and now includes a
growth screen criteria to emphasize the growth leaders aspect of
it, in addition to providing lower fees.”
Platform companies have penetrated the global economy and are
now a dominant business model for the 21st century. Platforms
create value through connecting interdependent groups (e.g., Uber
connecting a rider with a driver), while traditional businesses
create value through linear production or supply (e.g., Ford or
Hertz that produce/buy cars for sales/rent). PLAT targets companies
operating large, scalable networks that disrupt the competitive
landscape.
Summary of Methodology and Other
Enhancements
Name: WisdomTree Growth Leaders Fund (formerly,
WisdomTree Modern Tech Platforms Fund)Expense
Ratio: 20 basis points (bps) – a reduction of 25 bps from
45 bpsRevenue Growth Eligibility: at least 7%
revenue growth required (formerly, no requirement)Non-U.S.
Exposure: Limited to 12%, China limited to 5% and
domestic or Hong Kong listings (formerly, no caps)
Weighting Mechanism: Modified average of equal and
market cap weights with 9% individual security cap (formerly,
equally weighted)
The Platform Business Model
While the traditional business model creates value through
linear production of supply of a good or service, a platform
business is a non-linear, asset-light2 model that creates value
through connections. WisdomTree believes that the key competitive
advantage that platforms have relative to legacy businesses is
their ability to scale quickly and efficiently beyond the
capability of linear businesses.
At a certain size, the net benefit of further scale is limited
for a linear business, but unlimited for a platform business. As
platforms scale, they increase in value without increasing costs,
translating to higher revenue-growth and margins.
Schwartz added, “The structural advantages of the platform-based
businesses we seek to invest in can be reflected in financial
metrics through robust revenue growth, margin expansion,
substantial free cash flow generation and strong returns on
capital. Relative to the companies in the S&P 500 Index3, the
constituents of PLAT have generated greater historical revenue
growth essentially 3x higher than the typical S&P 500 companies
with stronger margins. The sales growth rates of these companies
are also approximately double the growth rates in some of the most
popular growth strategies.”
PLAT seeks to track the price and yield performance, before fees
and expenses, of the WisdomTree Growth Leaders Index (the
“Index”). The enhancements described herein associated with
revenue growth, non-U.S. exposure and weighting mechanism are
derived from changes to the Index. The Index is weighted
based on a modified average of equal and market capitalization
weights and is rebalanced annually. Learn more about WisdomTree
Growth Leaders Fund (PLAT) here.
Jarrett Lilien, President and Chief Operating Officer at
WisdomTree said, “We regularly review the methodologies in our ETF
family, strategizing on index improvements and beyond, as part of
WisdomTree’s goal of providing best-in-class product.”
1 FAANG is an acronym used in reference to five technology
companies: Facebook, Amazon, Apple, Netflix and Alphabet
(referencing its core subsidiary, Google). As of 6/30/2020,
PLAT held 1.3%, 1.6%, 2.0%, and 1.3% of its weight in Facebook,
Amazon, Apple, and Alphabet, respectively; PLAT did not hold
Netflix.
There is no guarantee that favorable historical growth metrics
will translate to favorable performance.
2 Asset Light: A low level of physical assets on the balance
sheet.
3S&P 500 Index: The S&P 500 Index is a cap-weighted
index of 500 stocks selected by the Standard & Poor’s Index
Committee designed to represent the performance of the leading
industries in the U.S. economy.
Basis point: 1/100th of 1 per cent.
Investors should carefully consider the investment
objectives, risks, charges and expenses of the Funds before
investing. To obtain a prospectus for WisdomTree Funds containing
this and other important information, please call 866.909.9473 or
visit WisdomTree.com to view or download a prospectus. Investors
should read the prospectus carefully before investing.
There are risks associated with investing, including the possible
loss of principal. Foreign investing involves currency, political
and economic risk. Funds focusing on a single country or sector
and/or funds that emphasize investments in smaller companies may
experience greater price volatility. Investments in emerging
markets, real estate, currency, fixed income and alternative
investments include additional risks. Dividends are not guaranteed,
and a company currently paying dividends may cease paying dividends
at any time. Diversification does not eliminate the risk of
experiencing investment losses. Due to the investment strategy of
certain Funds, they may make higher capital gain distributions than
other ETFs. Please see each Fund’s prospectus for a discussion of
risks.
References to specific securities and their issuers are for
illustrative purposes only and are not intended to be, and should
not be interpreted as, recommendations to purchase or sell such
securities. You cannot invest directly in an index. WisdomTree
Funds are distributed by Foreside Fund Services, LLC, in the U.S.
only.
Jeremy Schwartz and Jarrett Lilien are registered
representatives of Foreside Fund Services, LLC.
WTPR-20200729-0082
About WisdomTree
WisdomTree Investments, Inc., through its subsidiaries in the
U.S. and Europe (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 $61.5 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.
Contact Information:Media RelationsWisdomTree
Investments, Inc.Jessica Zaloom / Amie Lauder+1.917.267.3735 /
+1.416.459.6835jzaloom@wisdomtree.com /
alauder@wisdomtree.com
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