WisdomTree FAQs
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- What is an ETF?
- Exchange-traded funds (ETFs) are index funds whose shares are listed on a stock exchange and traded like equity securities at market prices. ETFs allow investors to buy or sell shares of a fund that represents the collective performance of a selected group of securities. ETFs are designed to add the flexibility, ease and liquidity of stock trading to the benefits of traditional index-fund investing.
- How do I buy and sell an ETF?
- ETFs trade like stocks on major national exchanges. Like stocks, they can be bought and sold through a brokerage account during the trading day. Because ETFs are transacted through a broker, investors pay commissions on their transactions. ETF shares typically trade at, above or below their per share net asset value.
- What does it mean to Create or Redeem an ETF?
- Creation and redemptions of ETF shares are restricted to institutional investors known as Authorized Participants (APs). These investors are authorized to purchase or redeem "Creation Units" directly from the issuing Fund in exchange for a basket of securities that are typically worth several million dollars. Unlike mutual funds, ETF shares are not individually redeemable. Individuals wishing to sell their shares must do so through their brokerage account.
- Who is WisdomTree?
- WisdomTree Investments, Inc.
WisdomTree Investments, Inc. is the creator of the WisdomTree Indexes and the proprietary rules-based methodology governing the WisdomTree Indexes. WisdomTree Investments has patent applications pending on the methodology and operation of the WisdomTree Indexes.
WisdomTree Asset Management, Inc.
WisdomTree Asset Management, Inc. is registered as an investment advisor with the Securities and Exchange Commission. WisdomTree Asset Management serves as investment adviser to the WisdomTree Trust and the WisdomTree exchange-traded funds, as well as for separate accounts.
WisdomTree Trust
WisdomTree Trust is a Delaware statutory trust registered as an Investment Company with the Securities and Exchange Commission pursuant to the Investment Company Act of 1940. The WisdomTree ETFs are each separate series of WisdomTree Trust. The WisdomTree ETFs are registered with the SEC as an open-end investment company.
WisdomTree Retirements Services, Inc.
WisdomTree Retirement Services, Inc. supports the use of the WisdomTree ETFs in retirement plans by financial professionals.
- What is unique about the WisdomTree approach?
- The WisdomTree Trust represents the first global family of fundamentally weighted ETFs based on proprietary dividend-weighted and earnings-weighted indexes.
- Is WisdomTree Asset Management the Portfolio Manager for the WisdomTree ETFs?
- WisdomTree Asset Management provides an investment program for each WisdomTree ETF. WisdomTree Asset Management also arranges for sub-advisory, transfer agency, custody, fund administration, and all other non-distribution related services necessary for the Funds to operate. BNY Investment Advisors, a division of The Bank of New York, serves as the sub-advisor for each WisdomTree ETF. The sub-advisor performs the day-to-day functions relating to portfolio management.
- What is the investment objective of each WisdomTree ETF?
- Each WisdomTree ETF seeks investment returns that closely correspond to the price and yield performance, before fees and expenses, of a particular index created by WisdomTree Investments. Each index consists of securities in the market suggested by its name that meet specific criteria developed by WisdomTree Investments.
- What are some of the advantages of index investing?
- Index investing is often referred to as "passive" investing because the stocks that index funds buy are largely pre-determined by the rules that select stocks for inclusion in the fund's underlying index. Because time and resources are not spent "picking stocks," a hallmark of "active" management, the fees and transaction costs associated with running an index fund are typically lower than the fees and expenses associated with running an actively managed fund. Higher fees and expenses eat away at investment returns. One potential disadvantage of index funds is that they are usually fully invested in stocks and may decline more in declining markets than actively managed funds that have larger cash positions.
- How do dividend-weighted and earnings-weighted indexes differ from a market-weighted index?
- WisdomTree’s dividend-weighted indexes and earnings weighted indexes differ from most traditional market cap-weighted indexes in that the proportion - or "weighting" - of the securities in each index is based on either the amount of cash dividends that companies in each index pay, the core earnings that companies in each index pay, the dividend yield of the companies in each index or the earnings yield that companies in each index pay. In the case of the dividend family, this means that companies that pay higher amounts of cash dividends or that have higher dividend yields generally will be more heavily weighted in each index and fund. In the case of the earnings family, this means that companies that have higher levels of core earnings or that have higher earnings yields generally will be more heavily weighted in each index and fund. Most indexes weight their securities based almost solely on market capitalization.
Investors should carefully consider the investment objectives, risks, charges and expenses of the Funds before investing. To obtain a prospectus containing this and other important information, please call 1-866-909-WISE (9473) or click here to view or download a prospectus online. Read the prospectus carefully before you invest. There are risks involved with investing including the possible loss of principal. Past performance does not guarantee future results.
There are risks associated with investing including possible loss of principal. In addition to the normal risks of investing, foreign investing involves special risks, such as risk of loss from currency fluctuation or political or economic uncertainty. Investments in real estate involve additional special risks, such as credit risk, interest rate fluctuations and the effect of varied economic conditions. Funds focusing on a single country, sector and/or smaller companies generally experience greater price volatility.
WisdomTree Funds are distributed by ALPS Distributors Inc.