We focus our attention on the emerging markets (EM), as they both have large exposures in energy-producing companies and are the largest energy consumers in the world. The oil price dynamics are causing large divergences in returns across countries—creating many winners and losers.
Strategic allocation models typically carve out a portion of an investment portfolio for alternative investments, such as commodities, hedge funds, private equity or managed futures. These alternative asset classes provide exposure to less correlated assets, theoretically increasing returns and lowering risks over the long term.
During 2014 we’ve noticed that large caps tended to outperform both mid-caps and small caps in U.S. equity markets. While there are a lot of active managers focused on different ways to select and build portfolios of U.S. large caps, exchange-traded funds (ETFs) designed to track the returns of large-cap indexes after costs, fees and expenses are also becoming more prevalent.
We believe that when a fund ranks number one in a particular investment category, it deserves some attention. This is particularly true when the fund category is generating a lot of attention as a valuation opportunity relative to the United States.
WisdomTree conducts the annual rebalance of its U.S. dividend Index family in December, with the annual screening date occurring on the last trading day of every November. Dividends, a key gauge of the market’s underlying fundamentals, continue to set new highs with another year of double-digit growth.