WisdomTree (NASDAQ: WETF), an exchange-traded fund (“ETF”) and
exchange-traded product (“ETP”) sponsor and asset manager, today
announced the launch of the Efficient Core family of ETFs, which
includes the International Efficient Core Fund (“NTSI”) and the
Emerging Markets Efficient Core Fund (“NTSE”) on the NYSE with
expense ratios of .26% and .32% respectively. In addition,
effective today, the WisdomTree 90/60 U.S. Balanced Fund is renamed
as the WisdomTree U.S. Efficient Core Fund (“NTSX”). The WisdomTree
Efficient Core suite seeks to leverage the benefits of overlays
providing fixed income exposure in seeking to provide capital
efficiency of U.S., international, and emerging equity markets.
Enhanced Core via 90/60 Portfolio Theory
Historically, a balanced portfolio (60% equities, 40% bonds)
served as the bedrock (and benchmark) for asset allocation
decisions. WisdomTree believes this same intuition can be used for
creating core strategies in the U.S., international and emerging
markets. However, instead of allocating to a portfolio of stocks
and bonds, they provide stock exposure to the U.S., international,
and emerging equity markets with a capital efficient exposure to
fixed income. This exposure is created by investing 90% of the
Fund’s assets in equities and 10% in short-term fixed income. The
60% bond exposure is attained through investment in laddered U.S.
Treasury futures contracts.
Jeremy Schwartz, WisdomTree Global Head of Research, said, “High
valuations in equities and bonds present a challenge and headwinds
for traditional portfolio approaches in achieving investor goals.
The WisdomTree Efficient Core ETFs are designed to help investors
create capital efficient equity and bond portfolio blends that have
lower volatility or similar volatility as a standalone 100%
equities allocation.”
NTSX, NTSI, and NTSE: What’s Under the
Hood?
U.S. Treasuries drive the efficiency of the Efficient Core ETFs
as they are highly liquid, easy to access and provide a good hedge
against selling pressure on risk assets. The Funds are constructed
by three key components:
- Long Equity Beta1: a portfolio of approximately 500 large-cap
stocks (U.S., International, or Emerging Markets) weighted by
market capitalization
- Cash Component: For every $100 invested in the ETF, $10 is kept
in short-term collateral that earns returns comparable to U.S.
Treasury bills
- Laddered2: Futures Positions: laddered 2, 5, 10, & 30-year
U.S. Treasury futures contracts, which is expected to help manage
interest rate risk
WisdomTree believes that these strategies have the potential to
enhance the efficiency of core asset allocation, increase the tax
efficiency of fixed income in taxable accounts, and free up capital
to invest in non-core and diversifying assets.
Learn more about the Efficient Core Funds here.
Investors should carefully consider the investment
objectives, risks, charges and expenses of the Fund before
investing. To obtain a prospectus containing this and other
important information, call 866.909.9473 or visit wisdomtree.com.
Read the prospectus carefully before you invest.
There are risks associated with investing, including possible
loss of principal.
While NTSX is actively managed, the Fund’s investment process is
expected to be heavily dependent on quantitative models and the
models may not perform as intended. Equity securities, such as
common stocks, are subject to market, economic and business risks
that may cause their prices to fluctuate. The Fund invests in
derivatives to gain exposure to U.S. Treasuries. The return on
a derivative instrument may not correlate with the return of its
underlying reference asset. The Fund’s use of derivatives will
give rise to leverage and derivatives can be volatile and may be
less liquid than other securities. As a result, the value of an
investment in the Fund may change quickly and without warning and
you may lose money. Interest rate risk is the risk that fixed
income securities, and financial instruments related to fixed
income securities, will decline in value because of an increase in
interest rates and changes to other factors, such as perception of
an issuer’s creditworthiness.
International Efficient Core:
There are risks associated with investing, including possible
loss of principal. Investments in non-U.S. securities involve
political, regulatory, and economic risks that may not be present
in U.S. securities. For example, foreign securities may be subject
to risk of loss due to foreign currency fluctuations, political or
economic instability, or geographic events that adversely impact
issuers of foreign securities. While the Fund is actively managed,
the Fund’s investment process is expected to be heavily dependent
on quantitative models and the models may not perform as intended.
Equity securities, such as common stocks, are subject to market,
economic and business risks that may cause their prices to
fluctuate. The Fund invests in derivatives to gain exposure to U.S.
Treasuries. The return on a derivative instrument may not correlate
with the return of its underlying reference asset. The Fund’s use
of derivatives will give rise to leverage and derivatives can be
volatile and may be less liquid than other securities. As a result,
the value of an investment in the Fund may change quickly and
without warning and you may lose money. Interest rate risk is the
risk that fixed income securities, and financial instruments
related to fixed income securities, will decline in value because
of an increase in interest rates and changes to other factors, such
as perception of an issuer’s creditworthiness. Diversification
does not eliminate the risk of experiencing investment
losses. Please read the Fund’s prospectus for specific details
regarding the Fund’s risk profile.
EM Efficient Core:
There are risks associated with investing, including possible
loss of principal. Investments in non-U.S. securities involve
political, regulatory, and economic risks that may not be present
in U.S. securities. For example, foreign securities may be subject
to risk of loss due to foreign currency fluctuations, political or
economic instability, or geographic events that adversely impact
issuers of foreign securities. Investments in securities and
instruments traded in developing or emerging markets, or that
provide exposure to such securities or markets, can involve
additional risks relating to political, economic, or regulatory
conditions not associated with investments in U.S. securities and
instruments or investments in more developed international markets.
While the Fund is actively managed, the Fund’s investment process
is expected to be heavily dependent on quantitative models and the
models may not perform as intended. Equity securities, such as
common stocks, are subject to market, economic and business risks
that may cause their prices to fluctuate. The Fund invests in
derivatives to gain exposure to U.S. Treasuries. The return on a
derivative instrument may not correlate with the return of its
underlying reference asset. The Fund’s use of derivatives will give
rise to leverage and derivatives can be volatile and may be less
liquid than other securities. As a result, the value of an
investment in the Fund may change quickly and without warning and
you may lose money. Interest rate risk is the risk that fixed
income securities, and financial instruments related to fixed
income securities, will decline in value because of an increase in
interest rates and changes to other factors, such as perception of
an issuer’s creditworthiness. Diversification does not
eliminate the risk of experiencing investment losses. Please
read the Fund’s prospectus for specific details regarding the
Fund’s risk profile.
Please read each Fund’s prospectus for specific details
regarding the Fund’s risk profile.
WisdomTree Funds are distributed by Foreside Fund Services LLC,
in the U.S. only. Foreside Fund Services LLC. is not affiliated
with the other entities mentioned.
Jeremy Schwartz is a registered representative of Foreside Fund
Services, LLC.
1 Ladder: A fixed income strategy that seeks equal allocations
across the yield curve in order to limit reinvestment risk.
2 Beta: A measure of the volatility of a security or a portfolio
in comparison to a benchmark. In general, a beta less than 1
indicates that the investment is less volatile than the benchmark,
while a beta more than 1 indicates that the investment is more
volatile than the benchmark.
WTPR-20210517-0118
About
WisdomTreeWisdomTree Investments, Inc., through its
subsidiaries in the U.S. and Europe (collectively, “WisdomTree”),
is an ETF and ETP sponsor and asset manager headquartered in New
York. WisdomTree offers products covering equity, commodity, fixed
income, leveraged and inverse, currency, cryptocurrency and
alternative strategies.
WisdomTree® is the marketing name for
WisdomTree Investments, Inc. and its subsidiaries worldwide.
Contact
Information:
Media RelationsWisdomTree Investments, Inc.Jessica
Zaloom+1.917.267.3735Jzaloom@wisdomtree.com /
wisdomtree@fullyvested.com
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