WisdomTree

Glossary

1-month LIBID rates: Good indication of the cost of borrowing U.S. dollars for one month’s time in European markets.

1-month rupee forwards: Agreements to either buy or sell rupees in exchange for U.S. dollars at a specified exchange rate one month into the future.

10-year government bond: a debt instrument backed by a government guarantee with an original maturity of 10 years.

10-year sovereign debt: a debt instrument backed by a sovereign or government guarantee with an original maturity of 10 years.

100-day moving average: Average of the prior 200 days’ worth of price values, with an increasing trend indicating relative strength and a decreasing trend indicating relative weakness.

12 month trailing EPS: 12 month trailing earnings per share is the sum of a company’s earnings per share for the previous four quarters

12-month forward return: Returns for the 12-month period following an observed trailing 12-month dividend yield.

12-month forward-looking P/E ratio: Estimated P/E ratio for a 12-month forward horizon.

12-Month Yield: The sum of the per-share dividends over the last 12 months, divided by the fund’s current net asset value (NAV)

12b-1 fee: An annual marketing or distribution fee in a mutual fund; this fee is considered an operational expense and is included in a fund’s expense ratio.

200-day moving average: Average of the prior 200 days’ worth of price values, with an increasing trend indicating relative strength and a decreasing trend indicating relative weakness.

50-day moving average: Average of the prior 50 days’ worth of price values, with an increasing trend indicating relative strength and a decreasing trend indicating relative weakness.

AAA credit rating: This is the highest issuer credit rating assigned by Standard & Poor’s, signaling strong confidence that the issuer will be able to maintain its payment obligations.

Abenomics: Series of policies enacted after the election of Japanese Prime Minister Shinzo Abe on December 16, 2012 aimed at stimulating Japan’s economic growth.

Abu Dhabi General Index: A free float market capitalization weighted index of stocks listed on the Abu Dhabi Securities Exchange.

Active: Funds that attempt to outperform the market by selecting securities a portfolio manager believe to be the best.

Active manager: Portfolio managers who run funds that attempt to outperform the market by selecting those securities they believe to be the best.

Actively managed ETFs: Investment strategy where a manager selects securities in an attempt to outperform the performance benchmark.

Actively managed mutual funds: Investment strategies that are not designed to track the performance of an underlying index.

Adjusted gross income: Refers to a tax filer’s income level after accounting for allowable deductions.

ADRs: American Depository Receipts, shares of a firm incorporated outside the U.S. but issued by a global bank and traded in the U.S., denominated in U.S. dollars.

Agency execution: An execution whereby the broker executes the trade in the market at agreed upon instruction and passes on the exact execution to the client.

Aggregate dividends: Weighting constituents according to the proportion of cash dividends that they generate compared to the sum total of cash dividends for all constituents within the index.

Alpha: Measure of risk-adjusted performance that compares how the constituents move relative to a benchmark.

Annual screening date: The screening date refers to the date upon which characteristics of eligible constituent firms are measured, whereas the rebalance refers to when the results from the screening date are implemented by way of Index weights and constituents.

Arbitrage Mechanism: The ability to compare the price of an ETF and its underlying basket and exchange one for the other utilizing the creation and redemption process.

Arbitrageur: A person who attempts to profit from price inefficiencies in the market by making simultaneous trades that offset each other and seek to capture a risk free profit.

ASEAN countries: Association of Southeast Asian Nations. Indonesia, Malaysia, the Philippines, Singapore and Thailand comprise the original members.

Ask Price: The price that someone will sell an ETF

Asset purchases: The Fed purchases longer-term securities issued by the U.S. government and longer-term securities issued or guaranteed by government-sponsored agencies such as Fannie Mae or Freddie Mac.

Asset-backed security: A fixed income security whose value or cash flows depends on the value of another asset, such as a loan, lease, or receivable.

Attribution analysis: Compares the performance of one index or investment to another, noting particularly the differences in weights or holdings. This analysis quantifies both the positive and the negative impacts to selecting or heavily weighting different stocks or sectors.

Austerity: Policies used by governments to reduce budget deficits during adverse economic conditions.

Authorized Participant (AP): An entity, usually an institutional investor, that submits orders to the ETF for the creation and redemption of ETF creation units.

Average Daily Trading Volumes – The average amount of individual securities traded in a day or over a specified amount of time. Trading activity relates to the liquidity of a security; therefore, when average daily trading volume is high, the stock can be easily traded and has high liquidity. As a result, average daily trading volume can have an effect on the price of the security. If trading volume isn’t very high, the security will tend to be less expensive because people are not as willing to buy it.

Average daily volume: Average dollar amount traded over the course of a single trading day.

Average dividend yield: The average relationship of dividend per share divided by share price over a period of time. Higher values indicate greater potential for dividend reinvestment.

Average of All Years: Average of the 1-year forward performance for all 24 years for which data exists. This is an average of the individual calendar years taken separately for the MSCI Emerging Markets Index, not an average annual return.

Average Value: The average value of the “Defensives Relative to Cyclicals” values over this period.

Average yield: Refers to the average interest rate paid by credit card customers on their credit card balances; in effect the charge for loaning the credit card borrowers money.

B-rated: Standard & Poor’s credit rating that implies the issuer is more vulnerable to nonpayment than obligations rated ‘BB’, but the obligor currently has the capacity to meet its financial commitment. Adverse business, financial, or economic conditions will likely impair the obligor’s capacity or willingness to meet its financial commitment on the obligation.

Balance sheet: refers to the cash and cash equivalents part of the Current Assets on a firms balance sheet and cash available for purchasing new positions

BAML High Yield 0-5 Constrained Index: tracks the performance of short-term US dollar denominated below investment grade corporate debt publicly issued in the US domestic market

Bank loan: A private debt arrangement issued by a financial institution which is senior to other creditors.

Barclays Global Aggregate Corporate ex-U.S. Total Return Index Hedged USD: A broad-based measure of the global investment-grade, fixed-rate, fixed income corporate markets outside the United States hedged in U.S. dollars.

Barclays Global Aggregate Corporate Index: the corporate component of the Barclays Global Aggregate Bond Index.

Barclays Global Aggregate Index: A broad-based measure of the global investment grade fixed-rate debt markets. The index includes the U.S. aggregate, Pan-European Aggregate, and the Asian-Pacific Aggregate Index.

Barclays Global Credit Index: Index which contains investment grade and high yield credit securities from the Barclays Multiverse Index.

Barclays Global Treasury Index: represents the government component of the Barclays Global Aggregate Index.

Barclays HY 2% Constrained Index: An issuer-constrained version of the U.S. Corporate High-Yield Index that measures the market of USD-denominated, non-investment grade, fixed-rate, taxable corporate bonds.

Barclays Multiverse Index: a broad-based measure of the international fixed-income bond market. The index represents the union of the Global Aggregate Index and the Global High Yield Index.

Barclays Rate Hedged U.S. Aggregate Bond Index, Negative Five Duration: Combines long positions in the Barclays U.S. Aggregate Bond Index with short positions in U.S. Treasury Bonds to provide a duration exposure of -5 years. Market values of long and short positions are rebalanced at month-end.

Barclays Rate Hedged U.S. Aggregate Bond Index, Zero Duration: Combines long positions in the Barclays U.S. Aggregate Bond Index with short positions in U.S. Treasury Bonds to provide a duration exposure of 0 years. Market values of long and short positions are rebalanced at month-end.

Barclays Trade-Weighted Dollar Bull Index: is part of the Barclays Trade-Weighted index family, which intends to reflect the appreciation or depreciation of a reference currency against a Trade-Weighted basket of other currencies.

Barclays U.S. Aggregate Bond Index: Represents the investment-grade, U.S. dollar-denominated, fixed-rate taxable bond market, including Treasuries, government-related and corporate securities, as well as mortgage and asset backed securities.

Barclays U.S. Aggregate Bond Index, 1-3 Year: This index is the 1-3 Yr component of the U.S. Aggregate index.

Barclays U.S. Aggregate Corporate Total Return USD: A broad-based measure of the global investment-grade, fixed-rate, fixed income corporate markets outside the United States

Barclays U.S. Corporate High Yield Index: Covers the universe of fixed-rate, non-investment-grade corporate debt.

Barclays U.S. Dollar Floating Rate Note (FRN) Index: provides a measure of the U.S. dollar denominated floating rate note market.

Barclays U.S. IG Corporate Index: A broad-based benchmark that measures the investment grade, fixed-rate, taxable, corporate bond market.

Basel II capital adequacy: Measure of a bank’s capital in accordance with generally accepted standards of international bank regulation, with higher values indicating greater potential ability to withstand adverse events.

Basis point: 1/100th of 1 percent.

BBB-: Standard & Poor’s credit rating that implies the borrower has adequate capacity to meet financial commitments, but may be more vulnerable to adverse economic conditions. This rating represents the lowest level of investment-grade.

Bear market: A sustained downturn in market prices, increasing the chances of negative portfolio returns.

Behavioral finance: An academic branch of finance devoted to studying the behavior of individuals as it relates to their financial decisions.

Beta: Measure of the volatility of an index or investment relative to a benchmark. A reading of 1.00 indicates that the investment has moved in lockstep with the benchmark; a reading of -1.00 indicates that the investment has moved in the exact opposite direction of the benchmark.

Beta benchmark: Characterized by measuring the performance of a particular universe of equities without attempting to utilize selection and weighting to generate differences in performance relative to this universe.

Better Alternative Trading System (BATS): An alternative trading platform.

Bid Price: The price that a someone will buy an ETF

Bid-to-cover ratio: the amount of bids received divided by the amount of bids accepted at a U.S. Treasury auction

Bid/Ask Spread: This is essentially the difference in price between the highest price that a buyer is willing to pay for an asset and the lowest price for which a seller is willing to sell it.

Bids: What investors are willing to pay.

Blend: Characterized by exposure spanning across stocks exhibiting both value and growth attributes.

Block ETF market: The block ETF market is when a broker dealer, market maker, or liquidity provider can give the client one “block” price to buy or sell an ETF.

Block liquidity: The degree to which an asset or security can be bought or sold in large size the market without affecting the asset’s price.

Bloomberg: A computer system that allows investors to access the Bloomberg data service, which provides real-time financial data, news feeds and messages and also facilitates the placement of trades.

Bloomberg Commodity Index Total Return: formerly known as Dow Jones-UBS Commodity Index Total Return (DJUBSTR), tracks a broadly diversified basket of commodity futures contracts.

Bloomberg Commodity Spot Index: formerly known as Dow Jones-UBS Commodity Spot Index (DJUBSSP), tracks the spot prices of a broadly diversified basket of commodities that comprise the total return index.

Bloomberg Dollar Spot Index (BBDXY): Tracks the performance of a basket of ten leading global currencies versus the U.S. dollar. Each currency in the basket and their weight is determined annually based on their share of international trade and FX liquidity.

Bloomberg U.S. Treasury Floating Rate Bond Index: A rules-based, market-capitalization-weighted index engineered to measure the performance of floating rate U.S. Treasury notes.

BofA Merrill Lynch 0-5 Year US High Yield Constrained, Negative Seven Duration Index: Tracks the performance of the combination of a long position in short maturity US high yield bonds and a short position in on the run US Treasuries where the net interest rate exposure of the index is adjusted to a negative seven year duration. Market values of long and short positions are rebalanced at month-end.

BofA Merrill Lynch 0-5 Year US High Yield Constrained, Zero Duration Index: Tracks the performance of the combination of a long position in short maturity US high yield bonds and a short position in on the run US Treasuries where the net interest rate exposure of the index is adjusted to a zero year duration. Market values of long and short positions are rebalanced at month-end.

Bond yield: Refers to the interest received from a bond and is usually expressed annually as a percentage based on its current market value.

Book value per share: Total book value divided by the number of shares outstanding. Measured as a percentage change as of the annual Index screening date compared to the prior 12 months. Higher values indicate greater growth orientation.

Bottom-up: An investment approach that de-emphasizes the significance of economic and market cycles. This approach focuses on the analysis of individual securities.

Break-even inflation rate: For a given bond maturity, for example five years, the interest rate on the five-year nominal bond minus the interest rate on the five-year inflation adjusted bond; meant to approximate expected inflation over that time frame, in this case five years.

BRIC: An acronym for Brazil, Russia, India and China.

BRICS: An acronym for Brazil, Russia, India, China and South Africa.

Broad Capital Market Weakness – Broad capital markets weakness is when the stock and the bond markets are feeling stress and pressure all at once

BSE Sensex 30 Index: A market capitalization-weighted index designed to measure the performance of 30 large, established firms listed on the Bombay Stock Exchange that represent the industries of India’s economy.

Bullish: a position that benefits when asset prices rise.

Bundesbank: The central bank of the Federal Republic of Germany.

Bundled fee: A marketing strategy that joins products or services together in order to sell them as a single combined unit.

Buyback: When a company uses its own cash to purchase its own outstanding shares; may positively impact the share price.

CAC 40 Index: The French stock market index that tracks the 40 largest French stocks based on market capitalization on the Paris Bourse (stock exchange).

Capex: Funds used by a company to acquire or upgrade physical assets such as property, industrial buildings or equipment. This type of outlay is made by companies to maintain or increase the scope of their operations.

Capital account: Sometimes referred to as the financial account—second component of a country’s balance of payments that reflects the net change in the nation’s ownership of assets.

Capital expenditures: Spending by a company typically made to enhance longer-term productive capacity.

Capital gains: Positive difference between the sale price of an asset and the original purchase price.

Capital reserves: a pool of assets or collateral set aside to cover unexpected future liabilities.

Capital spending: Spending by a company typically made to enhance longer-term productive capacity.

Carry: The amount of return that accrues from investing in fixed income or currency forward contracts.

Cash Creation/Redemption: The process of exchanging a sum of money for ETF shares.

Cash reserve ratio (CRR): The portion of depositors’ balances banks must have on hand as cash determined by the country’s central bank.

CBOE Volatility Index® (VIX®): a key measure of market expectations of near-term volatility conveyed by S&P 500 stock index option prices. It is the premier benchmark for U.S. stock market volatility.

CCC-rated: Standard & Poor’s credit rating that implies the issuer is currently vulnerable to nonpayment, and is dependent upon favorable business, financial, and economic conditions for the obligor to meet its financial commitment. In the event of adverse business, financial, or economic conditions, the obligor is not likely to have the capacity to meet its financial commitment on the obligation.

Central bank: Refers to the U.S. Federal Reserve.

CNH forward: An agreement to buy or sell a specific currency at a future date at an agreed upon rate. CNH denotes Chinese Yuan circulated offshore in Hong Kong.

CNH time deposit: Offshore Chinese Yuan deposited with a bank for a defined period of time.

CNY forward: An agreement to buy or sell a specific currency at a future date at an agreed upon rate. CNY denotes Chinese Yuan Forward.

Collateralized loan obligations: a security whose value is determined by pool of bank loans

Commodity currency basket: represents a blend of eight forward currency contracts from commodity-producing countries.

Conditional commitment: Assurance of an action that becomes an actual commitment only conditions on inflation and unemployment.

Consensus estimates: Refers to the estimates of a broadly representative group of different economists, part of whose expertise involves forecasting potential rates of GDP growth.

Consumer Price Index (CPI): A measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food and medical care. The CPI is calculated by taking price changes for each item in the predetermined basket of goods and averaging them; the goods are weighted according to their importance. Changes in CPI are used to assess price changes associated with the cost of living.

Consumption tax: Tax applied to spending on goods and services.

Contagion: Scenario where one negative event feeds into a strengthening cascade of additional negative events. A singular bank failure could be an example in that once one bank fails, customers at other banks will tend to try and withdraw their funds all at once and adding stress to the overall banking system.

Contrarian: Practice of seeing what the majority of market participants are focused on and attempting to look in the complete opposite direction.

Convertibility: Refers to the process involved in exchanging different currencies so that an international investor can acquire securities outside their home country.

Core consumer prices: Measure of prices that excludes certain items, such as food and energy, that face volatile price movements.

Core CPI: long run trend in the price level that excludes items frequently subject to volatile prices, like food and energy.

Corporate Bonds: a debt security issued by a corporation.

Corporate Credit: compensation associated with the risk of lending to a corporation.

Corporate debt: Bonds a company issues in order to raise money.

Correlation: Statistical measure of how two sets of returns move in relation to each other. Correlation coefficients range from -1 to 1. A correlation of 1 means the two subjects of analysis move in lockstep with each other. A correlation of -1 means the two subjects of analysis have moved in exactly the opposite direction.

Coupon: The annual interest rate stated on a bond when it’s issued. The coupon is typically paid semiannually. This is also referred to as the “coupon rate” or “coupon percent rate.”

Creation and Redemption Process: The process whereby an ETF issuer takes in and disburses baskets of assets in exchange for the issuance or removal of new ETF shares.

Creation Unit (CU): A specified number of shares issued by an exchange-traded fund (ETF) in large blocks, generally between 25,000 and 200,000 shares. The authorized participants that buy creation units either keep the ETF shares that make up the creation unit or sell all or part of them on a stock exchange.

Credit: A contractual agreement in which a borrower receives something of value now and agrees to repay the lender at some date in the future.

Credit conditions: The markets perception of the willingness of lenders to extend credit to risky borrowers.

credit cycle: the process in which the pricing of and access to credit evolves over time.

Credit default spread: a market derived measure of risk that seeks to signal the likelihood that a borrower will default.

Credit quality: A measure of a borrowers potential risk of default.

Credit ratings: Apply to the underlying holdings of the Fund, and not to the Fund itself. S&P and Moody’s study the financial condition of an entity to ascertain its creditworthiness. The credit ratings reflect the rating agency’s opinion of the holdings financial condition and histories.

Credit risk: The risk that a borrower will not meet their contractual obligations in conjunction with an investment.

Credit spread: The portion of a bond’s yield that compensates investors for taking credit risk.

Crore: is part of the Indian counting system. One crore = 10 million;

Cross rate: synonymous with exchange rate, which tells the value of one currency in terms of another.

CRSP U.S. Small Cap Index: Market capitalization-weighted measure of the performance of small cap equities within the United States.

Currency: Currency in which the underlying index returns are calculated. Euros: The returns are calculated, and there is no currency conversion; resulting statistics result purely from the returns of the equities. U.S. dollars: The returns are calculated and then converted into U.S. dollars; resulting statistics are the result of a combination of the euro’s performance against the U.S. dollar and the returns of the underlying equities.

Currency bet: an investment made in a currency in order to profit from a rise or fall in the value

Currency hedging: Strategies designed to mitigate the impact of currency performance on investment returns.

Currency snap: A “snapshot” of the currency at a moment in time

Currency union: Group of different markets or countries committed to using the same currency.

Current account: The difference between a nation’s total exports of goods, services and transfers, and its total imports of them.

Current account deficit: Situation where a country has a greater level of imports than exports.

Curve: Refers to the yield curve. Positioning on the yield curve is important to investors, especially during non-parallel shifts.

CUSIP: CUSIP stands for Committee on Uniform Securities Identification Procedures. A CUSIP number identifies most securities, including: stocks of all registered U.S. and Canadian companies, and U.S. government and municipal bonds.

Cyclical sectors: Consumer Discretionary, Energy, Industrials, Materials, Financials and Information Technology sectors.

Cyclical stocks: Refers to stocks in the Consumer Discretionary, Energy, Industrials, Materials, Financials and Information Technology sectors.

DAX Index: A stock index that represents 30 of the largest and most liquid German companies that trade on the Frankfurt Exchange. The prices used to calculate the DAX Index come through Xetra, an electronic trading system. A free-float methodology is used to calculate the index weightings along with a measure of average trading volume.

Dealer: A person or firm in the business of buying and selling securities for their own account, whether through a broker or otherwise.

Defensive sectors: Consumer Staples, Health Care, Telecommunication Services and Utilities.

Defensive stocks: Refers to stocks in the Consumer Staples, Health Care, Utilities and Telecommunication Services sectors.

Defensives Relative to Cyclicals: The P/E ratio of defensive stocks divided by the P/E ratio of cyclical stocks. Higher values indicate that defensive stocks are rising more in price relative to their earnings per share than are cyclical stocks.

Defined contribution: Type of retirement plan where participants decide to defer part of their current compensation into the plan and assume the risk of having sufficient future assets in retirement.

Deflation: The opposite of inflation, characterized by falling price levels.

Deleverage: Bring down levels of debt.

Deposit Rate: The rate parties receive for deposits at the central bank.

Discount: When the price of an ETF is lower than its NAV.

Disinflation: Term used to describe instances of slowing inflation, different from deflation in that price levels are still increasing overall, just at a slower rate.

Dispersion: A measure of the statistical distribution of portfolio returns.

Distribution Yield: Calculated by annualizing the most recent fund distribution and dividing by the fund’s current NAV. The yield represents a single distribution from the fund and does not represent the total returns of the fund.

Diversified Commodity Index – An index that tracks a diverse basket of commodities to measure their performance, often traded on exchanges allowing investors to gain easier access to commodities without having to enter the futures market

Diversified Trends Indicator™ (DTI®): are registered marks of Alpha Financial Technologies, LLC (AFT), and have been licensed by the Fund. The Fund is not sponsored, endorsed, sold or promoted by AFT. Diversified Trends Indicator™ is a long/short, rules-based managed futures index constructed of 24 liquid commodity and financial futures contracts.

Dividend: A portion of corporate profits paid out to shareholders.

Dividend coverage ratio: Earnings per share divided by dividends per share. Higher numbers indicate a firm has a greater amount of earnings per share relative to its dividend payments.

Dividend discount model (DDM): Method of determining whether a company’s share price is currently above or below where it could be if future dividend payments were the key determinant, as opposed to other factors.

Dividend growth: The growth in trailing 12-month dividends for the specified universe.

Dividend growth rate: Annualized growth in net dividends per share.

Dividend Payout Ratio: The percentage of earnings paid to shareholders in dividends. Calculated as yearly dividends per share over earnings per share.

Dividend Stream®: refers to the regular dividends per share multiplied by the number of shares outstanding.

Dividend weighted: Constituent securities represented within the Index in proportion to their contribution to the dividend stream of the Index.

Dividend yield: a financial ratio that shows how much a company pays out in dividends each year relative to its share price.

Dividend yields: Refers to the trailing 12-month dividend yield. Dividends over the prior 12 months are added together and divided by the current share price. Higher values indicate more dividends are being generated per unit of share price.

Dividend-focused ETFs: ETFs that focus particularly on dividends when screening potential constituents for inclusion.

Dividend-focused indexes: Indexes that focus particularly on dividends when screening potential constituents for inclusion.

Dividends per Share: The sum of declared dividends for every ordinary share issued. Dividend per share (DPS) is the total dividends paid out over an entire year (including interim dividends but not including special dividends) divided by the number of outstanding ordinary shares issued.

Dodd-Frank Act: Legislation passed in response to the 2008–09 financial crisis, meant to focus on what were viewed as potential shortcomings in the regulatory framework that contributed to this crisis.

Dollar Trading Volume – The amount of trading within a specific timeframe expressed in U.S. Dollars

Dollar-denominated assets: Assets such as stocks and bonds that are priced in U.S. dollars.

Dollar-denominated debt: Debt that is issued in U.S. dollars and must be paid in U.S. dollars. If the issuer’s local currency depreciates against the U.S. dollar, it becomes more expensive for the issuer to pay off the debt; if the issuer’s local currency appreciates against the U.S. dollar, the debt obligation becomes less expensive.

Dovish: Description used when stimulation of economic growth is the primary concern in setting monetary policy decisions.

Dow Jones Emerging Markets Consumer Titans 30 Index: Index designed to measure the performance of the 30 leading emerging market companies in the consumer goods and consumer services industries. Weighting is by float-adjusted market capitalization, subject to diversification requirements.

Dow Jones EPAC Select Dividend Index: Designed to measure the performance of relatively higher-yielding companies in developed market countries outside the United States that meet certain dividend criteria defined by Dow Jones. Weighting is by dividend yield.

Dow Jones EURO STOXX 50 Index: A market capitalization-weighted stock index of 50 large, blue-chip European companies operating within eurozone nations.

Dow Jones Industrial Average: The Dow Jones Industrial Average is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange and the Nasdaq.

Dow Jones U.S. Select Dividend Index: The index is a modified market capitalization approach and weights by dividend yield. Stocks are selected for fundamental strength relative to their peers, subject to various screens such as dividend quality and liquidity.

Dow Jones U.S. Select Real Estate Securities Index: a market capitalization index measuring the performance of equity Real Estate Investment Trusts (REITs) and other companies that invest directly or indirectly in real estate.

Downgrade of U.S. government debt: Refers to a ratings agency, such as Moody’s or Standard & Poor’s, lowering their rating of U.S. government debt.

Downside: Currency depreciation.

Downside protection: A broad investment conception referring in this case to the potential for the mitigation of risk due to the payment of dividends

Drawdowns: Periods of sustained negative trends of returns

Dubai Financial Market General Index: A free float-adjusted market capitalization-weighted price index comprising stocks of listed companies.

Duration: A measure of a bond’s sensitivity to changes in interest rates. The weighted average accounts for the various durations of the bonds purchased as well as the proportion of the total government bond portfolio that they make up.

Duration Curve: The graphical representation of the trend in interest rates as it relates to length of loan. The plots on the graph will have an interest rate for a specific loan time period, usually 2,5,10,30 year.

DXY Index: Weighted geometric mean of the dollar’s value compared only with basket of 6 other major currencies, Euro, Japanese Yen, Pound Sterling, Canadian Dollar, Swedish Krona, and Swiss Franc.

Earnings growth estimates: Bloomberg analysts’ long-term earnings growth expectations, which encompass the estimated growth in operating earnings per share over the company’s next full business cycle, typically three to five years.

Earnings per share: Total earnings divided by the number of shares outstanding. Measured as a percentage change as of the annual Index screening date compared to the prior 12 months. Higher values indicate greater growth orientation.

Earnings Retention: Proportion of a firm’s earnings that are is not paid out to shareholders in the form of a dividend but rather reinvested back into the business. Higher numbers indicate a greater percentage of earnings are being reinvested.

Earnings Stream®: Earnings per share x the number of shares outstanding. For an index, these totals are added for all constituents.

Earnings yield: The earnings per share for the most recent 12-month period divided by the current market price per share. The earnings yield (which is the inverse of the P/E ratio) shows the percentage of each dollar invested in the stock that was earned by the company.

Earnings-weighted: Earnings for all constituents in an index are added together, and individual constituents are subsequently weighted by their proportional contribution to that total.

Easy money policies: Policies that have the goal of stimulating economic activity.

Effective tax rate: The average tax rate at which a corporation’s pre-tax profits are taxed, taking into account all forms of taxation paid by the company.

Efficient Market Hypothesis: Current share prices correctly reflect all available information about publicly traded firms and continually incorporate the emergence of new information on a nearly instantaneous basis; there are no bubbles, and firms are neither expensive nor inexpensive.

Electronic Broking Services (EBS): A wholesale electronic trading platform used to trade foreign exchange (FX) with market making banks.

EM local currency debt: Debt denominated in the local currencies of emerging market governments.

EM USD Sovereigns: Debt denominated in U.S. dollars issued by emerging market governments.

Embedded Income Yield: Embedded Income Yield represents the annualized rate of return generated by a Fund’s investments in both fixed income securities and derivatives exclusive of interest rate changes and movement in foreign exchange spot rates. The calculation is intended to capture the Fund’s potential to earn income return over the next year given current holdings and market conditions. The Embedded Income Yield will differ from the portfolio’s Yield to Maturity, due to the incorporation of derivatives in the Embedded Income Yield. Embedded Income Yield and Portfolio Yield to Maturity may differ from a Fund’s actual distribution and SEC yield and do not reflect Fund expenses. Credit ratings apply to the underlying holdings of the Fund, and not to the Fund itself. S&P and Moody’s study the financial condition of an entity to ascertain its creditworthiness. The credit ratings reflect the rating agency’s opinion of the holdings financial condition and histories. The ratings shown are all considered investment grade and are listed by highest to lowest in percentage of what the Fund holds.

Emerging market: Characterized by greater market access and less potential for operational risks when compared to frontier markets, which leads to a larger base of potentially eligible investors.

Employment Cost Index: Measure of the change in cost of labor, free from the influence of employment shifts among occupations and industries.

EMU4: Consists of Germany, France, Italy and Spain.

“Entitlement spending” refers to federal spending based on eligibility thresholds established by income, age or disability. Social Security, Medicare and Medicaid are the three largest entitlement programs and account for approximately $1.5 trillion in federal spending in 2012 (source: Congressional Budget Office).

ETF Issuer: A firm that has the ability to issue Exchange Traded Funds (ETFs) and bring ETFs to market.

ETF order flow:The amount of buy and sell orders a particular trading desk is receiving.

ETF Spread: The ETF spread is the difference between the highest price a buyer is willing to pay and the lower price a selling is selling to sell.

EUR TWI:The trade-weighted euro is compiled as a weighted average of exchange rates of home versus foreign currencies, with the weight for each foreign country equal to its share in trade. This index is computed by the Bank of England.

Euro Stoxx: Refers to the Euro Stoxx 50 Index, a market capitalization-weighted stock index of 50 large, blue-chip European companies operating in Eurozone nations.

Euroclear eligible: a trade settlement system in Europe that allows for the efficient delivery of bonds and funds.

European currency risks: The assumption of European currency risk means that investment returns will be impacted not only by the underlying stocks but also the performance of the euro relative to the U.S. dollar. If the euro declines versus the U.S. dollar, there will be a negative impact on returns; if the euro appreciates there will be a positive impact.

European Financial Stability Facility (EFSF): a company established by euro area Member States for the purpose of providing loans to euro area countries in financial difficulties

European Financial Stabilization Mechanism (EFSM): a European Union (EU) facility which allows the European Commission to raise €60 billion on behalf of the EU for lending to EU Member States experiencing exceptional economic circumstances

European Monetary Union: 18 countries in Europe that use the Euro currency

European Stability Mechanism (ESM): the permanent crisis resolution mechanism for the countries of the euro area

Eurozone (EZ): Consists of the following 18 countries that have adopted the euro as their currency: Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia and Spain (source: European Central Bank, 2014).

Ex-date: The date after which shareholders in a particular stock may sell their shares but still be entitled to an upcoming dividend payment that has been previously announced but not yet paid.

Excess reserves: Refers to money that banks have but do not loan out. In essence, the Fed has been purchasing assets, and this money has entered the money supply, but the vast majority of it has ended up sitting as reserves on bank balance sheets. To really stimulate economic growth potential, it would have to be loaned out, and without these loans occurring in large quantity, the U.S. is at a lower risk of inflationary pressure.

Exchange rate: The exchange of one currency for another, or the conversion of one currency into another currency.

Exchange-traded notes: Different from exchange-traded funds in that they are a direct obligation of a financial entity—typically a bank—where the contract specifies that the bank will pay the holder of the note according to the returns of an underlying index minus applicable fees. Exchange-traded funds hold the underlying assets of the index and their returns represent the returns of the assets held.

Execution process: The process of getting in and out of an investment.

Executional parties: Those able to assist in the execution process, or the process of getting in and out of an investment.

Explicit forward guidance: Revealing the interest rate forecasts that may relate to the central bank’s objectives or its assessment of economic shocks and the functioning of the economy.

Factor loadings: For the purposes of this piece, factor loadings are synonymous with coefficients determined by a regression analysis. They provide estimates of the sensitivity of a series of returns to different external variables.

Fair value: Also known as “eNAV.” It is essentially an indicative value (IV) that is made in real time by calculating the basket value on every underlying tick and by adjustments that account for updated market news

Fair Value Model – A model that prices securities using eNAV, which is essentially an indicative value (IV) that is made in real time by calculating the basket value on every underlying tick and by adjustments that account for updated market news. If the basket is closed, the fair value model incorporates the closing price, currency movements and market news event to calculate a fair value for the ETF.

Fairly priced: Implies that market prices are thought to be aligned with the underlying fundamentals of the firms in question, not appearing expensive and not appearing inexpensive.

Fed Interest Rates: Refers to the Federal Funds Rate, which is the rate that banks that are members of the Federal Reserve system charge on overnight loans to one another. The Federal Open Market Committee sets this rate. Also referred to as the “policy rate” of the U.S. Federal Reserve.

Fed tightening: Refers to the Federal Reserve enacting monetary policies that have the overall impact of reducing the availability of credit, which is widely thought to have the potential to slow economic growth.

Federal Funds Rate: The rate that banks that are members of the Federal Reserve system charge on overnight loans to one another. The Federal Open Market Committee sets this rate. Also referred to as the “policy rate” of the U.S. Federal Reserve.

Federal Open Market Committee (FOMC): The branch of the Federal Reserve Board that determines the direction of monetary policy.

Federal Reserve: The Federal Reserve System is the central banking system of the United States.

The Federal Reserve’s balance sheet: Refers to all the assets it has purchased and is now holding. When the Fed purchases assets, money that had previously not been in circulation enters circulation. This expands the overall money supply and is meant to stimulate economic growth.

Fiduciary: An individual in whom another has placed trust and confidence to manage and protect property or money.

First arrow policies: This refers to the component of Abenomics policy that is focused upon what the Bank of Japan can do from a monetary policy standpoint to attempt to stimulate growth.

Fiscal budget: is a period used for calculating annual budget requirements for a country or an organization or company.

Fiscal cliff: is a term used to describe the fiscal situation the federal government faces when a series of large tax increases and spending cuts are due to take effect at the end of 2012 and in early 2013.

Fiscal deficit: Situation where government spending exceeds government revenue.

Fiscal drag: This occurs when a national government’s spending less any taxes does not meet the net savings goals of the private economy. This usually leads to deflationary pressure in the economy.

Fiscal Policy: Government spending policies that influence macroeconomic conditions. These policies affect tax rates, interest rates and government spending, in an effort to control the economy.

Fixed income: An investment security that provides a return in the form of fixed periodic payments and the eventual return of principal at maturity.

Fixed rate coupon bonds: debt securities maturing in more than one year which pay a fixed rate of interest

Flatten: to effect a zero position

Floating Rate Security: A debt instrument with a variable interest rate usually tied to a benchmark rate such as the US Treasury Bill Rate or the London Interbank Offered Rate.

Floating Rate Treasury Note: a debt instrument issued by the U.S. government whose coupon payments are linked to the 13-week Treasury bill auction rate.

Flow of funds: A set of accounts that is used to follow the flow of money within various sectors of an economy. Specifically, the account analyzes economic data on borrowing, lending and investment throughout the economic sectors.

Flows: Monetary investment from foreign investors.

Foreign direct investment (FDI): An investment made by a company or entity based in one country into a company or entity based in another country.

Foreign Exchange (FOREX, FX): The exchange of one currency for another, or the conversion of one currency into another currency.

Foreign exchange reserves: The total balance of foreign currency deposits and bonds held by a central bank or monetary authority.

Forward contracts: An agreement to buy or sell a specific currency at a future date at an agreed upon rate.

Forward currency contracts: A forward contract in the forex market that locks in the price at which an entity can buy or sell a currency on a future date.

Forward guidance: A central bank policy tool intended to guide market expectations regarding the future of policy rates.

Forward P/E ratio: Share price divided by compilation of analyst estimates for earnings-per-share over the coming 12-month period. These are estimates that may be subject to revision or prove to be incorrect over time.

Frankfurt’s DAX: A stock index that represents 30 of the largest and most liquid German companies that trade on the Frankfurt Exchange. The prices used to calculate the DAX Index come through Xetra, an electronic trading system. A free-float methodology is used to calculate the index weightings along with a measure of average trading volume.

Free-float market capitalization: a market capitalization weighting method that is calculated by excluding closely held shares owned by governments or company insiders.

free-floating:an exchange rate regime whereby the value of the currency is determined by supply and demand against other currencies.

Frontier market: Typically characterized by a higher degree of potential risk, including issues that may inhibit the flow of assets across national borders and awareness of potential difficulties for foreigners to establish accounts.

FTSE 100 Index: A market capitalization-weighted index measuring the performance of the 100 largest companies listed on the London Stock Exchange.

FTSE China 25 Index: Represents the 25 largest and most liquid Chinese stocks (H Shares and Red Chips) listed and trading on the Hong Kong Stock Exchange.

FTSE Developed Europe Index: Measure of the performance of developed European companies, weighted by market capitalization.

FTSE Developed ex North America Index: A market-capitalization weighted index representing the performance of around 1380 large and mid cap companies in 23 Developed markets, excluding the USA and Canada. The index is derived from the FTSE Global Equity Index Series (GEIS).

FTSE Emerging Markets Index: A free float-adjusted market capitalization index that is designed to measure equity market performance of emerging markets.

FTSE MIB Index: The FTSE MIB Index is the primary benchmark index for the Italian equity market. Capturing approximately 80% of the domestic market capitalization, the FTSE MIB Index measures the performance of the 40 most liquid and capitalized Italian shares and seeks to replicate the broad sector weights of the Italian stock market.

FTSEurofirst 300 Index: The FTSEurofirst 300 Index is part of the FTSEurofirst Index Series and the FTSEurofirst 300 Indices, which are tradable indices measuring the performance of European portfolios. It is a capitalization-weighted price index which uses free-float. It measures the performance of Europe’s largest 300 companies by market capitalization

Fund Distribution Yield: The fund distribution yield is calculated by annualizing the most recent fund distribution and dividing by the fund’s current NAV. The yield represents a single distribution from the fund and does not represent the total returns of the fund.

Fundamental fair value: What the share price of a firm would be if the sole determinant were the behavior of the underlying fundamental factor, an example of which would be the dividend per share.

Fundamental value: The value of a firm that is related to a company’s actual operations and production as opposed to changes in share price.

Fundamental weighting: A type of equity index in which components are chosen based on fundamental criteria as opposed to market capitalization. Fundamentally weighted indexes may be based on fundamental metrics such as revenue, dividend rates, earnings or book value.

Fundamentals: Attributes related to a company’s actual operations and production as opposed to changes in share price.

Futures price: the price of a futures contract.

Futures/Futures Contract: Reflects the expected future value of a commodity, currency or Treasury security.

FX Reserves: assets held by central banks and monetary authorities, usually in different reserve currencies, used to back its liabilities

G-7 Countries: France, Germany, Italy, Japan, United States, United Kingdom, and Canada.

G10/Group of Ten: A group of industrialized nations that meet on an annual basis to plan, debate, and cooperate on international financial matters. Member countries include: Belgium, Canada, France, Germany, Italy, Japan, Netherlands, Sweden, Switzerland, United Kingdom, and United States.

G20: Group of 20 of the world’s largest economies that meets regularly in order to coordinate global economic policies.

G3: The world’s three leading economic blocs, currently comprising the United States, Europe and Japan.

Gilt: Bonds issued by the UK government and generally considered to be low risk and the primary vehicle in which QE is carried out in the UK.

Global bank: Large financial institution capable of making bulk-sized international transactions.

Global carry trades: Occur when investors borrow money in a low-interest-rate country at low cost and use it to invest in a higher-interest-rate country. The potential profit that exists relates to the difference in interest rates between the two countries, minus applicable trading costs.

Global Depository Receipts (GDRs): Ways for corporations to list their stock on different exchanges outside their home country.

Government deficit: A status of financial health in which expenditures exceed revenue.

Government Pension Investment Fund (GPIF): Japan’s largest public pension fund.

Gross domestic product (GDP): The sum total of all goods and services produced across an economy.

Growth: Characterized by higher price levels relative to fundamentals, such as dividends or earnings. Price levels are higher because investors are willing to pay more due to their expectations of future improvements in these fundamentals.

Growth stocks: Stocks whose share prices are higher relative to their earnings per share or dividends per share. Investors are willing to pay more because of their earnings or dividend growth expectations going forward.

Growth style: Style of investing emphasizing stocks with share prices typically higher in relation to financial metrics, such as dividends or earnings.

Gulf Cooperation Council (GCC): A political and economic union of the Arab states bordering the Persian Gulf and located on or near the Arabian Peninsula.

H-Share: A share of a company incorporated in the Chinese mainland that is listed on the Hong Kong Stock Exchange or other foreign exchange.

Haircut: Refers to scenario where prices of bonds carried on bank balance sheets are given a lower current price, commensurate with how the bonds would trade at their market price.

Hawkish: Description used when worries about inflation are the primary concerns in setting monetary policy decisions.

Headwind: challenges to performance or expectations of performance.

Hedge: Making an investment to reduce the risk of adverse price movements in an asset. Normally, a hedge consists of taking an offsetting position in a related security, such as a futures contract.

Hedge currency exposure: Engage in transactions that mitigate the impact of currency fluctuations on the total returns of foreign investments. Hedging can help returns when a foreign currency depreciates against the U.S. dollar, but it can hurt when the foreign currency appreciates against the U.S. dollar.

Hedge fund: A hedge fund resembles a pooled investment vehicle administered by a professional management firm. It is often structured as a limited partnership or limited liability company. Hedge funds invest in a diverse range of markets and use a wide variety of investment styles and financial instruments.

Hedgers: Individuals—typically taking a longer-term view—looking to conduct business or make an investment in a particular country where they want to minimize the exchange rate impact as part of their strategic focus.

High Dividend Yield Years: Average of the 1-year forward performance, taken for each individual 1-year period, following year-end trailing 12-month dividend yields above the median value for all 24 values for the MSCI Emerging Markets Index. This is not an average annual return.

High Yield: Sometimes referred to as “junk bonds,” these securities have a higher risk of default than investment-grade securities.

High Yield Corporate (Bond) – a type of corporate bond that offers a higher rate of interest because of its higher risk of default

High-Discount Margin: the additional compensation over the reference rate that investors demand for holding a floating rate security

High-yield bond spread: The amount of incremental income a bondholder receives for assuming credit risk, specifically that of companies rated below investment grade credit.

High-yielding dividend payers: The top 30% of constituents in the WisdomTree Dividend Index ranked by dividend yield.

Higher-income individuals: Single tax filers reporting $400,000 or more in income after any applicable deductions, and household tax filers reporting $450,000 or more in income after any applicable deductions.

Higher-income investors: Married tax filers with adjusted gross income greater than $250,000, and single filers with adjusted gross income greater than $200,000.

HSBC Asian Local Bond Index (ALBI): The HSBC Asian Local Bond Index tracks the total return performance of liquid bonds denominated in the local currencies in China, Hong Kong, India, Indonesia, Korea, Malaysia, the Philippines, Singapore, Taiwan, and Thailand. Country weightings are driven by market capitalization, liquidity, accessibility, and market development, while security weightings within the countries are based on market capitalization.

Hurdle rate: Rate at which the rupee needs to depreciate in order to compensate for the high carry of the currency.

Hyperinflation: Extremely rapid, uncontrolled rise in price levels during a short period of time.

Hypothetical capacity: Refers to a hypothetical capacity level for assets tracking the performance of the WisdomTree Emerging Markets Equity Income Index, which denotes the level of assets where the Index would prescribe taking its first 10% position in an underlying constituent.

iboxx $ Liquid High Yield Index: The index is designed to provide a broad representation of the U.S. dollar-denominated high yield liquid corporate bond market.

iBoxx $ Liquid Investment Grade Index: The index is designed to represent a subset of the broader USD corporate bond market which can be used as a basis for tradable products

ICE U.S. Dollar Index (DXY): a geometrically- averaged calculation of six currencies weighted against the U.S. dollar. Current exposures include the euro, Japanese yen, British pound, Canadian dollar, Swedish krona and, & Swiss franc.

IFO sentiment indexes: Prepared by the IFO Institute for Economic Research in Munich. The Ifo Business Climate Index is based on ca. 7,000 monthly survey responses of firms in manufacturing, construction, wholesaling and retailing. The firms are asked to give their assessments of the current business situation and their expectations for the next six months.

Illiquidity: The state of a security or other asset that cannot easily be sold or exchanged for cash without a substantial loss in value. Illiquid assets also cannot be sold quickly because of a lack of ready and willing investors or speculators to purchase the asset. The lack of ready buyers also leads to larger discrepancies between the asking price (from the seller) and the bidding price (from a buyer) than would be found in an orderly market with daily trading activity.

Implied interest rate: The annualized interest rate implied by forward currency contracts relative to spot rates.

Implied yield: The annualized rate of return generated by a fund’s investment in forward currency contracts. The calculation is intended to show the yield of forward currency contracts, assuming that foreign exchange rates remain constant.

Implied/Underlying Liquidity – Implied liquidity or implied daily tradable shares (IDTS) is a representation of how many shares can potentially be traded daily in an ETF as portrayed by the creation unit. The formula is: (30 day average daily volumes * variable percentage) / shares per creation unit) * creation unit size

In-Kind Creation/Redemption: The process of exchanging a basket of assets for ETF shares.

In-kind transfers: As money flows into or out of different index-tracking strategies, the ability to execute in-kind transfers, i.e., exchange securities for shares or shares for securities allows these strategies to be more operationally efficient.

Index-based mutual funds: Investment strategies designed to track the performance of an underlying index.

Indian Rupee spot rate: The national currency of India and most commonly traded against the U.S. dollar. It is the rate at which the Indian currency can be converted to the U.S. dollar and vice versa.

Indicated dividend stream: refers to the regular dividends per share indicated to be paid in the coming year multiplied by the number of shares outstanding.

Indicated Dividend Yield: Indicated dividends per share are annualized and then divided by the current share price. High values indicate low prices relative to indicate low prices relative to indicated dividends.

Indicative Value (IV): The indicative value (IV) is the value that ETF issuers provide to offer a more real-time indication of the value of each ETF portfolio. It is also sometimes known as the indicative optimized portfolio value (IOPV) or intraday indicative value (IIV)

Industrial production: A measure of manufacturing activity within the economy.

Industry group classification: Organizes companies into industrial groupings based on similar production processes, similar products or similar behavior in financial markets.

Inflation: Characterized by rising price levels.

Inflation expectations: Expectations of inflation based on the pricing of nominal and inflation-adjusted bonds.

Inflation-adjusted bonds: Bonds with interest rates that adjust in order to compensate the holder for the impact of inflation.

Inflation-targeting regime: An economic policy in which the central bank of a country estimates the “target” inflation rate and uses monetary tools to steer actual inflation to the targeted inflation.

Information ratio: A risk-adjusted return measure calculated by taking the excess return against the benchmark and dividing by the tracking error.

Initial public offering (IPO)- The first sale of stock by a private company to the public

Interest Rate Differentials: The Difference between the 2 Year interest rate swaps of the United Kingdom vs. the United States.

Interest rate premium: Refers to the difference between short-term interest rates in India and short-term interest rates in the United States.

Interest rate risk: The risk that an investment’s value will decline due to an increase in interest rates.

Interest rates: The rate at which interest is paid by a borrower for the use of money.

Intraday Portfolio Trading – The ability to buy or sell an ETF from anytime between the equity market open and close.

Intrinsic value: Value of a firm based on its operations, business practices and profitability, which may or may not be closely related to the value of that same firm based on its equity share price.

Investment Grade: A rating given to a municipal or corporate bond. It is a relatively favorable rating by either Moody’s or Standard & Poor’s indicating a higher chance an issuer performs interest and principal obligations as promised by the terms of the debt issuance.

Investment: The percentage of the market size that is rated an investment-grade credit by either Standard & Poor’s, Moody’s or Fitch.

IRA: Individual retirement account.

Japan Nationwide Consumer Price Index: An index meant to measure price levels in Japan that Japanese consumers face; upward values indicate a trend of increasing prices, downward values indicate a trend of decreasing prices.

Japan real estate investment trusts (J-REITs): Investment structure containing a basket of different exposures to real estate, be it directly in properties or in mortgages traded on the Tokyo Stock Exchange. Returns predominantly relate to changes in property values and income from rental payments.

Japan’s Nikkei: Short for Japan’s Nikkei 225 Stock Average, the leading and most-respected index of Japanese stocks. It is a price-weighted index comprised of Japan’s top 225 blue-chip companies on the Tokyo Stock Exchange. The Nikkei is equivalent to the Dow Jones Industrial Average Index in the U.S.

Japanese equity dividend yields: Refers specifically to the trailing 12-month dividend yield of the MSCI Japan Index plotted over time.

Japanese Government Bond (JGB): A bond issued by the government of Japan. The government pays interest on the bond until the maturity date. At the maturity date, the full price of the bond is returned to the bondholder. Japanese government bonds play a key role in the financial securities market in Japan.

JP Morgan Corporate Emerging Markets Bond Index Broad (CEMBI Broad): The JPMorgan Corporate Emerging Markets Bond Index Broad (CEMBI Broad) is a market capitalization weighted index consisting of US dollar-denominated Emerging Market corporate bonds. The index serves as a global corporate benchmark representing Asia, Latin America, Europe and Middle East / Africa. US dollar-denominated corporate issues from index-eligible countries are narrowed further by only including issues with more than $300m current face outstanding and at least five years to maturity (at the time of inclusion into the index).

JP Morgan Emerging Markets Bond Index Global (EMBI Global): The JPMorgan Emerging Markets Bond Index Global (EMBI Global) tracks total returns for US dollar-denominated debt instruments issued by emerging market sovereign and quasi-sovereign entities including Brady bonds, loans, Eurobonds.

JP Morgan GBI-EM Global Diversified Hungary Index: The JP Morgan GBI EM Global Diversified Index and its underlying country and regional subindices tracks the performance of local currency debt issued by emerging market governments, whose debt is accessible by most of the international investor base. The Hungary subindex represents government debt issued in Hungarian forint.

JP Morgan GBI-EM India Index: The JP Morgan GBI EM Index and its underlying country and regional subindices tracks the performance of local currency debt issued by emerging market governments, whose debt is accessible by most of the international investor base. The India subindex represents government debt issued in Indian rupee.

JP Morgan Government Bond Index – Emerging Markets (GBI-EM) Global Diversified: The JP Morgan GBI EM Global Diversified tracks the performance of local currency debt issued by emerging market governments, whose debt is accessible by most of the international investor base. The index incorporates a constrained market-capitalization methodology in which individual issuer exposures are capped at 10%, (with the excess distributed to smaller issuers) for greater diversification among issuing governments.

JPMorgan ELMI+ China Index: The JPMorgan Emerging Local Markets Index Plus and its underlying country and regional subindices track the total returns for local-currency denominated money market instruments in emerging market countries. The China subindex uses a weighted basket of 1-, 2-, 3- months currency forwards collaterized with U.S. money market rates to proxy the total returns of an investment in local-currency money market instruments. The returns are reported in U.S. dollar terms.

JPMorgan ELMI+ India Index: The JPMorgan Emerging Local Markets Index Plus and its underlying country and regional subindices track the total returns for local-currency denominated money market instruments in emerging market countries. The India subindex uses a weighted basket of 1-, 2-, 3- months currency forwards collateralized with U.S. money market rates to proxy the total returns of an investment in local-currency money market instruments.

JPX-Nikkei 400: is composed common stocks whose main market is the TSE 1st section, 2nd section, Mothers or JASDAQ market (in principle). The components are reviewed annually to keep the representativeness of the market. The Annual Review shall be conducted at the end of August as follows.(1)1000 stocks are selected based on trading value in the past 3 years and the market value on the selection base date (the end of June) of the Annual Review, (2)Each stock is scored by 3-year average ROE, 3-year cumulative operating profit and market value on the selection base date with the weights on the each indicator 40%, 40%, 20% respectively, (3)400 stocks are selected by the final ranking with the scores calculated in (2) and qualitative factors from the perspectives of corporate governance and disclosure. In case of delisting of the components due to a merger or bankruptcy etc, new stocks shall not be added in principle. When the Annual Review is conducted, the number of components is back to 400, therefore the index is calculated with less than 400 components until then.

JPY TWI: The trade-weighted yen is compiled as a weighted average of exchange rates of home versus foreign currencies, with the weight for each foreign country equal to its share in trade. This index is computed by the Bank of England.

Junk Bond: A high-yield or non-investment grade bond. Junk bonds are fixed-income instruments that carry a rating of ‘BB’ or lower by Standard & Poor’s, or ‘Ba’ or below by Moody’s. Junk bonds are so called because of their higher default risk in relation to investment-grade bonds.

KOSPI (Korea Composite Stock Price Index): A market capitalization-weighted index built to measure the performance of all common shares on the Korean stock exchanges.

Labor productivity: Measure of how much labor is able to accomplish, given the use of a set amount of resources, most often the number of hours worked.

Large: Characterized by exposure to the top 70% of market capitalization (share price x number of shares outstanding) within the Value, Blend or Growth style zones with the majority of the fund’s weight.

Large Blend: Characterized by exposure spanning across stocks exhibiting both value and growth attributes. This is achieved while focusing on relatively larger companies.

Large Value: Characterized by lower price levels relative to fundamentals, such as earnings or dividends. Prices are lower because investors are less certain of the performance of these fundamentals in the future. This is achieved while focusing on relatively larger companies.

Large-cap dividend payers: The top 300 constituents in the WisdomTree Dividend Index ranked by market capitalization.

Large-Capitalization (Large-Cap) – A term used by the investment community to refer to companies with a market capitalization value of more than $10 billion. Large cap is an abbreviation of the term “large market capitalization”. Market capitalization is calculated by multiplying the number of a company’s shares outstanding by its stock price per share.

Last price: The last price the security traded at on the stock exchange.

Lead Market Maker (LMM): A broker-dealer firm that accepts the risk of holding a certain number of shares of a particular security in order to facilitate trading in that security.

Leverage: Total assets divided by equity. Higher numbers indicate greater borrowing to finance asset purchases; leverage can tend to make positive performance more positive and negative performance more negative.

Leveraged loan market: Loans extended to companies or individuals that already have undertaken considerable amounts of debt, thereby increasing their risk of potential default.

Leveraged-loan crisis: Excessive leverage by financial institutions and consumers that led to the financial crisis of 2007–2009.

Limit Orders: An order placed with a brokerage to buy or sell a set number of shares at a specified price or better.

Liquid market: A market in which it is easy to execute a trade with minimal price impact.

Liquidity: The degree to which an asset or security can be bought or sold in the market without affecting the asset’s price. Liquidity is characterized by a high level of trading activity. Assets that can be easily bought or sold are known as liquid assets.

Liquidity aggregator: An agency broker (does not commit capital) that takes a client buy or sell order and contacts a variety of market makers. This puts the market makers in competition with one another and this process helps client source liquidity for their order. The liquidity aggregator typically has access and relationships with market makers that the client does not.

Liquidity providers: Traders that facilitate the trading of ETF shares by conducting the transference of liquidity between the underlying basket shares and the ETF.

Loan loss provisions: money set aside to help cover potential bad loans.

Local currency sovereign bond yield: The rate of return derived from a local currency-denominated government bond, assuming that the security is held to maturity.

Local currency sovereigns: debt denominated in local currencies issued by an emerging market government.

Locally denominated debt: Debt denominated in local currencies issued by an emerging market government.

Long (or Long Position) – The buying of a security such as a stock, commodity or currency, with the expectation that the asset will rise in value, the opposite of Short (or Short Position).

Long-only bond strategy: a traditional approach to fixed income portfolio management.

Long-term debt to equity: Ratio of long-term debt, typically over one year in maturity, to the level of equity. Higher numbers indicate a greater reliance on borrowing to finance firm activity.

Long-Term Earnings Estimates: Estimated compounded annual growth rate of the operating earnings per share (EPS) over the company’s next full business cycle (typically 3-5 years).

Long-Term Earnings Growth Expectations: Compilation of analyst estimates of the growth in operating earnings expected to occur over the next full business cycle, typically 3 to 5 years, sourced from Bloomberg.

Long-term refinancing operations (LTRO): Means by which the European Central Bank was able to provide liquidity to the European financial sector.

Losers: Stocks that have delivered negative performance since the investor made their initial investment.

Low Dividend Yield Years: Average of the 1-year forward performance, taken for each individual 1-year period, following year-end trailing 12-month dividend yields below the median value for all 24 values for the MSCI Emerging Markets Index. This is not an average annual return.

Lower bound: Central bank target rates that are at or close to zero, implying limited room for further easing.

M2 money supply: Contains all funds deposited in checking accounts as well as funds deposited in savings accounts and certificates of deposit. There are various ways to measure the money supply of an economy. This one is meant to broadly account for the majority of savings and checking accounts held by individuals and businesses across the economic landscape.

Maastricht Treaty: the original treaty that established the formation and rules of the European Union and the euro

Macro: Focused on issues impacting the overall economic landscape as opposed to those only impacting individual companies.

Main refinancing operations (MRO): a periodic open market operation executed for the purpose of providing the banking system with the amount of liquidity that the ECB desires. Main refinancing operations are conducted through weekly standard tenders (in which banks can bid for liquidity) and normally have a maturity of one week

Main Refinancing Rate: The so-called benchmark interest rate for European monetary policy

Managed futures: An alternative investment strategy in which futures contracts are used as part of the investment strategy.

Managed-float:an exchange rate regime whereby the value of the currency is allowed to float around a proscribed range. The central bank intervenes in the market to maintain the trading range or to limit volatility.

Marginal Deposit Facility Rate: The rate of interest that banks receive on deposits with the central bank.

Marginal Lending Facility Rate: The rate at which banks obtain overnight liquidity from the central bank

Margins: Focused on issues impacting the overall economic landscape as opposed to those only impacting individual companies.

Market: A bid and an offer on a particular ETF.

Market Capitalization: Market cap = share prices x number of shares outstanding. Firms with the highest values receive the highest weights in approaches designed to weight firms by market cap.

Market capitalization-weighting: Market cap = share prices x number of shares outstanding. Firms with the highest values receive the highest weights in approaches designed to weight firms by market cap.

Market Factor: Measures sensitivity of a security to the overall market movements.

Market maker: Someone who quotes a buy and a sell price in a financial instrument.

Market Orders: An order that an investor makes through a broker or brokerage service to buy or sell an investment immediately at the best available current price.

Market participant: Anyone interacting with the ETFs in some capacity. It can be end investors, market makers, hedgers, authorized participants.

Markit iBoxx USD Liquid Investment Grade Index: Designed to provide a balanced representation of the USD investment-grade corporate market and to meet investor demand for a USD-denominated, highly liquid and representative investment-grade corporate index.

Master limited partnership (MLP): Investment structure where holdings typically must derive most of their cash flows from real estate, natural resources or commodities, combining the tax benefits of a partnership—taxes occur when holders receive distributions—with the liquidity of a publicly traded company.

Maturity: the amount of time until a loan is repaid

Mean reversion: The concept that a series of returns has a tendency to return to its average level over longer periods, even if shorter periods can exhibit wide swings.

Median: The median is the value within a dataset at which 50% of all observations occur above and 50% occur below.

Median dividend yield/median earnings yield: Meant to calculate the median payout ratio, which is the median dividend per share divided by the median earnings per share.

Median earnings yield: Earnings per share divided by share price. Value reflects the point where 50% of values are above and 50% are below.

Median Forward Price-to-Earnings (P/E) Ratio: Ratio of current price per share to estimated earnings per share over the course of the next year. Median refers to the middle observation, meaning that 50% of the dataset is below and 50% is above this value.

Median long-term earnings growth estimates: Compilation of analyst estimates of the growth in operating earnings expected to occur over the company’s next full business cycle, typically three to five years. Value reflects the point where 50% of values are above and 50% are below.

Median trailing 12-month dividend yield: Dividends over the prior 12-months are added up and divided by the current share price. Higher values indicate more dividends are being generated per unit of share price.

Medium Dividend Yield Years: Average of the 1-year forward performance, taken for each individual 1-year period, following year-end trailing 12-month dividend yields not among the 8 highest or 8 lowest of all 24 values. This is not an average annual return.

Mergent Dividend Achievers Select Index: Designed to track the performance of dividend-paying companies in the U.S. that have increased their annual dividend payments for the last 10 or more consecutive years.

Merrill Lynch ex-U.S. Issuers High Yield Constrained Index: Contains all securities outside of the U.S. in the BofA Merrill Lynch U.S. High Yield Index and caps issuer exposure at 2%.

Micro: Focused on issues impacting individual companies as opposed to those impacting the broader economic landscape.

Mid-Cap: Characterized by exposure to the next 20% of market capitalization (after the top 70% have been removed) within the Value, Blend or Growth style zones with the majority of the fund’s weight.

Mid-Cap Value: Characterized by lower price levels relative to fundamentals, such as earnings or dividends. Prices are lower because investors are less certain of the performance of these fundamentals in the future. This is achieved while focusing on mid-cap companies.

Modified equal-weighted indexes: Equal-weighted indexes place an equal weight on each constituent, the major result being that index weight has no connection to company size. Modified equal-weighted methodologies similarly disconnect index weight from company size but do not prescribe exactly equal weights for each constituent.

Momentum Factor: the average return of stocks with high momentum minus the average return of stocks with low momentum after adjusting for size

Momentum Stocks: Stocks characterized by high sensitivity to sentiment and perception of potential, with lower sensitivity to actual business operations

Momentum traders: Individuals whose buy and sell decisions are influenced more heavily by recent price performance than any other factors; they typically buy after upward movements and sell after downward moves.

Monetary Base: For a particular economy, the sum total of all cash and bank deposits in circulation. Increasing this number is one way to stimulate economic growth.

Monetary easing policies: Actions undertaken by a central bank with the ultimate desired effect of lowering interest rates and stimulating the economy.

Monetary Expansion: Actions undertaken by a central bank with the ultimate desired effect of lowering interest rates and stimulating the economy.

Monetizing: When a central bank purchases debt with the consequence of increasing the money supply.

Money Market: a market for highly-liquid assets generally maturing in one year or less

Morningstar Dividend Yield Focus Index: This focused benchmark tracks income-producing securities issued by financially healthy companies with sustainable profits. The index includes the top 75 income-producing stocks that meet certain eligibility criteria. The index aims to maximize yield by using a fundamental, dividend-based weighting system.

Mortgage-backed securities: Fixed income securities that are composed of multiple underlying mortgages.

MSCI AC Asia Pacific ex Japan Index: The MSCI AC Asia Pacific ex Japan Index captures large and mid cap representation across 4 of 5 Developed Markets countries (excluding Japan) and 8 Emerging Markets countries in the Asia Pacific region. With 683 constituents, the index covers approximately 85% of the free float-adjusted market capitalization in each country. Developed Markets countries in the index include: Australia, Hong Kong, New Zealand and Singapore. Emerging Markets countries include: China, India, Indonesia, Korea, Malaysia, the Philippines, Taiwan and Thailand.

MSCI AC World ex-US Index: Measures the performance of companies incorporated in both emerging markets and developed markets, excluding the United States. Index weighting is by market cap.

MSCI AC World ex-US Sector Sub Indexes: Composed of companies within the broad MSCI AC World ex-US Index classified into indexes encompassing each of the following 10 GICS industry sectors: Consumer Discretionary, Consumer Staples, Energy, Financials, Health Care, Industrials, Information Technology, Materials, Telecommunication Services and Utilities.

MSCI ACWI ex-U.S. Index: A free-float adjusted market capitalization-weighted index that is designed to measure the equity market performance of developed and emerging markets excluding companies based in the United States.

MSCI ACWI ex-US Small Cap Index: captures small cap representation across 23 of 24 Developed Markets (DM) countries (excluding the US) and 21 Emerging Markets (EM) countries.

MSCI ACWI Index: A free-float adjusted market capitalization-weighted index that is designed to measure the equity market performance of developed and emerging markets.

MSCI ACWI Small Cap Index: A free-float adjusted market capitalization-weighted index that is designed to measure the equity market performance of developed and emerging markets, specifically focusing on the small-cap segment of these equity markets.

MSCI Australia Index: Market capitalization-weighted index designed to measure the performance of Australian equities.

MSCI Brazil Index: Index weighted by float-adjusted market capitalization designed to measure the performance of the Brazilian equity market.

MSCI China Index: A free float-adjusted, market capitalization-weighted equity index designed to measure the performance of the Chinese equity market.

MSCI Country Index: a free float-adjusted, market capitalization-weighted equity index designed to measure the performance of a specific countries market.

MSCI EAFE Financials Index: Captures large and mid cap representation across 21 of 23 Developed Markets (DM) countries around the world, excluding the US and Canada. All securities in the index are classified in the Financials sector as per the Global Industry Classification Standard.

MSCI EAFE Growth Index: Market capitalization-weighted subset of stocks within the MSCI EAFE Index that have higher share prices relative to their earnings or dividends per share.

MSCI EAFE IMI Index: A free float adjusted market cap-weighted index composed of companies
representative of the developed market structure of developed countries in Europe, Australasia and Japan, covering the large-cap, mid-cap and small-cap segments of the
capitalization spectrum.

MSCI EAFE Index: is a market cap-weighted index composed of companies representative of the developed market structure of developed countries in Europe, Australasia and Japan.

MSCI EAFE Mid Cap Growth Index: A free float-adjusted market capitalization-weighted equity index that captures mid-cap representation across developed markets around the world, excluding the U.S. and Canada, focusing on those with higher earnings growth characteristics.

MSCI EAFE Mid Cap Index: A free float-adjusted market capitalization equity index that captures mid-cap representation across developed market countries around the world, excluding the U.S. and Canada.

MSCI EAFE Mid Cap Value Index: A free float-adjusted market capitalization-weighted equity index that captures mid-cap representation across developed markets around the world, excluding the U.S. and Canada, focusing on those with higher book value-to-market value ratios.

MSCI EAFE Small Cap Growth Index: A free float-adjusted market capitalization-weighted equity index that captures small-cap representation across developed market countries around the world, excluding the U.S. and Canada, focusing on those with higher earnings growth characteristics.

MSCI EAFE Small Cap Index: A free float-adjusted market capitalization equity index that captures small-cap representation across developed market countries around the world, excluding the U.S. and Canada.

MSCI EAFE Small Cap Value Index: A free float-adjusted market capitalization-weighted equity index that captures small-cap representation across developed market countries around the world, excluding the U.S. and Canada, focusing on those with higher book value-to-market value ratios.

MSCI EAFE Value Index: Market capitalization-weighted subset of stocks within the MSCI EAFE Index that have lower share prices relative to their earnings or dividends per share.

MSCI EM Small Cap Index: Includes small cap representation across 21 Emerging Markets countries. The small cap segment tends to capture more local economic and sector characteristics relative to larger Emerging Markets capitalization segments.

MSCI Emerging Markets Consumer Discretionary Index: designed to measure the combined equity market performance of the consumer discretionary sector of emerging markets countries.

MSCI Emerging Markets Consumer Staples Index: designed to measure the combined equity market performance of the consumer staples sector of emerging markets countries.

MSCI Emerging Markets Energy Index: Designed to measure the combined equity market performance of the Energy sector of emerging market countries.

MSCI Emerging Markets Financials Index: Designed to measure the combined equity market performance of the Financials sector of emerging market countries.

MSCI Emerging Markets Growth Index: A market capitalization-weighted subset of stocks in the MSCI Emerging Markets Index that have higher share prices relative to their earnings or dividends per share.

MSCI Emerging Markets Health Care Index: Designed to measure the combined equity market performance of the Health Care sector of emerging market countries.

MSCI Emerging Markets Index: a broad market cap-weighted Index showing performance of equities across 23 emerging market countries defined as “emerging markets” by MSCI.

MSCI Emerging Markets Industrials Index: Designed to measure the combined equity market performance of the Industrials sector of emerging market countries.

MSCI Emerging Markets Information Technology Index: Designed to measure the combined equity market performance of the Information Technology sector of emerging market countries.

MSCI Emerging Markets Materials Index: Designed to measure the combined equity market performance of the Materials sector of emerging market countries.

MSCI Emerging Markets Minimum Volatility Index: An index with constituents selected from the MSCI Emerging Markets Index, with a focus on an optimization process subject to constraints, that attempts to generate lower volatility than the MSCI Emerging Markets Index.

MSCI Emerging Markets Telecommunication Services Index: Designed to measure the combined equity market performance of the Telecommunication Services sector of emerging market countries.

MSCI Emerging Markets Utilities Index: Designed to measure the combined equity market performance of the Utilities sector of emerging market countries.

MSCI Emerging Markets Value Index: A market capitalization-weighted subset of stocks in the MSCI Emerging Markets Index that have lower share prices relative to their earnings per share, dividends per share, or lower prices relative to other financial metrics.

MSCI EMU Index: A free float-adjusted market capitalization-weighted index designed to measure the performance of the markets in the European Monetary Union.

MSCI EMU Local Currency Index: captures large- and mid-cap representation across the 11 developed market countries in the EMU and provides local currency returns, which are not translated back to U.S. dollars.

MSCI Europe Index: A free float-adjusted market capitalization-weighted index designed to measure the performance of developed equity markets in Europe.

MSCI Europe Large Cap Index: captures large cap representation across the 15 Developed Markets (DM) countries in Europe.

MSCI Europe Mid Cap Index: captures mid cap representation across the 15 Developed Markets (DM) countries in Europe.

MSCI Europe Small Cap Index: A free float-adjusted market capitalization-weighted index designed to measure the performance of developed equity markets in Europe, specifically focusing on the small-cap segment of these equity markets.

MSCI France Index: A market capitalization-weighted index designed to measure the performance of the French equity market.

MSCI Frontier Markets 100 Index: includes 100 of the largest and most liquid constituents of the MSCI Frontier Markets Index. MSCI Frontier Markets Index is a broad market cap-weighted index, taking investability requirements into consideration, across 26 countries defined as Frontier Markets by MSCI

MSCI Frontier Markets 100 Index: Includes 100 of the largest and most liquid constituents of the MSCI Frontier Markets Index. The MSCI Frontier Markets Index is a broad market cap-weighted index, taking investability requirements into consideration, across 26 countries defined as frontier markets by MSCI.

MSCI Germany Index: Index weighted by float-adjusted market capitalization designed to measure the performance of the German equity market.

MSCI Hong Kong Index: A market capitalization-weighted index designed to measure the performance of the Hong Kong equity market.

MSCI India Index: A market capitalization-weighted index designed to measure the performance of the Indian equity market.

MSCI Japan Index: A market cap-weighted subset of the MSCI EAFE Index that measures the performance of the Japanese equity market.

MSCI Japan Local Currency Index: A market cap-weighted index that measures the performance of the Japanese equity market in the local currency (yen).

MSCI Netherlands Index: A market capitalization-weighted index designed to measure the performance of the Netherlands equity market.

MSCI Qatar Index: A market capitalization-weighted equity index designed to measure the performance of the Qatari equity market.

MSCI Russia Energy Index: Designed to measure the market performance of the Energy sector within the Russian equity market.

MSCI Russia Index: Index weighted by float-adjusted market capitalization designed to measure the performance of the Russian equity market.

MSCI Singapore Index: A market capitalization-weighted index designed to measure the performance of the Singapore equity market.

MSCI South Africa Index: A market capitalization-weighted index designed to measure the performance of the South African equity market.

MSCI South Korea Index: A free float-adjusted market capitalization-weighted equity index designed to measure the performance of the South Korean equity market.

MSCI Thailand Index: A market capitalization-weighted index designed to measure the performance of the Thailand equity market.

MSCI UAE Index: A market capitalization-weighted index designed to measure the performance of the UAE equity market.

MSCI United Kingdom Index: A market capitalization-weighted index designed to measure the performance of the United Kingdom equity market.

MSCI US REIT Index: a market capitalization index measuring the performance of equity Real Estate Investment Trusts (REITs) with the United States.

MSCI World Equity Index: The MSCI World Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed markets.

Multiple expansion: Term for a rising P/E ratio, meaning that share prices are rising faster than earnings are growing.

NASDAQ International Dividend Achievers Index: Designed to measure the performance of companies in developed international markets that have increased their dividends for the past five consecutive years. Weighting is by dividend yield.

NASDAQ US Dividend Achievers Select Index: Designed to track the performance of dividend-paying companies in the U.S. that have increased their annual dividend payments for the last 10 or more consecutive years.

Negative correlation: Indicated by a tendency of two series of data to move in opposite directions. Shown in the chart (in the red box), the USD-to-GBP exchange rate is trending downward while the FTSE 100 Index is trending upward.

Negative deposit rates: A new European Central Bank policy measure aimed at charging banks for parking their excess cash with the central banks.

Negative duration strategies: Refer to WisdomTree’s Interest Rate Strategies that target a negative overall duration; namely, the WisdomTree Barclays U.S. Aggregate Bond Negative Duration Fund and the WisdomTree BofA Merrill Lynch High Yield Bond Negative Duration Fund.

Net asset value (NAV): The calculated assets minus liabilities divided by shares outstanding. NAV is the straightforward account of the actual assets in the fund

Net income: A company’s total earnings (or profit), which are calculated by taking revenues and adjusting for the cost of doing business, depreciation, interest, taxes and other expenses.

Net interest margin: A measure of the difference between the interest income generated by banks or other financial institutions and the amount of interest paid out to their lenders (for example, deposits), relative to the amount of their (interest-earning) assets.

Net profit: A measure of profitability after accounting for all costs.

Nifty 50: The 50 stocks that were most favored by institutional investors in the 1960s and 1970s. Companies in this group were usually characterized by consistent earnings growth and high P/E ratios.

Nifty Index: The National Stock Exchange of India’s benchmark index for the Indian equity market

Nikkei 225 Stock Average Index: A price-weighted average of 225 top-rated Japanese companies listed in the First Section of the Tokyo Stock Exchange.

NISA: Nippon Individual Savings Account. Nippon is the Japanese word for Japan.

Nominal interest rate: Interest rate that does not account for the impact of inflation.

Nominal yield: the annual interest rate that an investor demands for holding a bond to maturity, not including the impact of inflation.

Non-deliverable forward currency contract: An agreement to buy or sell a specific currency at a future date at an agreed-upon rate that is settled in U.S. dollars.

Non-investment grade debt: Sometimes referred to as “junk bonds,” these securities have a higher risk of default than investment-grade securities.

Non-performing loan: A loan that is in default or close to being in default. Many loans become non-performing after being in default for 90 days, but this can depend on the contract terms.

Notional: The dollar value of the derivative contract.

NSE S&P CNX Nifty Index: A market capitalization-weighted index designed to measure the performance of 50 large companies listed on the National Stock Exchange of India.

Number of constituents optimized: These numbers refer to hypothetical optimizations in which every security in the Index is held (“0”) to omitting the 20 most constraining positions (“20”).
Weight of optimized constituents: The weight of the constituents excluded as a result of any optimization. A lower number indicates that the assets tracking the Index are closer to holding every security within the Index in its prescribed weight.

Offer: The price at which investors are willing to sell.

Onscreen volume: the number of shares traded in an ETF on an exchange.

Open-End Mutual Funds: Type of mutual fund that does not have restrictions on the amount of shares the fund will issue, so if demand is high enough the fund will continue to issue shares. These funds buy back shares when investors wish to sell.

Operating earnings: Earnings from continued, regular business operations that do not account for certain one-time charges that may be unique to a particular quarter or period and not repeatable.

Order flow: The collective orders to either buy or sell specific securities.

Ordinary income: Refers to wage and salary income from employment.

Ordinary income rates: Tax rates faced by American citizens on their salary and wage income.

Outright monetary transactions (OMT): a transaction whereby assets are bought or sold outright in the market in order to affect monetary policy

Over-the-Counter (OTC): A security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, etc.

Overlay strategy: overlaying debt instruments on top of an existing portfolio.

Overnight interest rates: Rate at which banks can borrow from each other.

Passive: Passive indexes take a rules-based approach with regular rebalancing schedules that are not changed due to market conditions.

Passive exchange-traded funds: Exchange-traded funds that track the performance of an index.

Payout ratio: The percentage of earnings paid to shareholders in dividends. Calculated as yearly dividends per share over earnings per share.

PEG ratio: A stock’s price-to-earnings ratio divided by the growth rate of its earnings

Per capita gross domestic product (GDP): Gross domestic product of an economy divided by the number of people within that economy. Higher numbers indicate a higher standard of living for that economy.

Per capita income: The sum of the value of all goods and services produced in a particular country divided by the total population of that country. Higher values imply a higher standard of living for that country’s citizens.

Portfolio flows: the movement or transfer of assets to facilitate security transactions.

Portfolio netting: The practice where, in a rebalance situation, the client or broker will look at the underlying exposure of buys and sells and net off any overlap. The net result is trading less in the market place.

Potential dividend growers: 300 constituents from the WisdomTree Dividend Index screened for characteristics that WisdomTree believes to be associated with potential dividend growth.

Premium: When the price of an ETF is higher than its NAV.

Price Discovery: The process of the market finding a fair price for an asset through the process of bringing together buyers and sellers.

Price-to-book value (P/B) ratio: Share price divided by book value per share. Lower numbers indicate an ability to access greater amounts of earnings per dollar invested.

Price-to-cash flow (P/CF) ratio: Share price divided by cash flow per share. Lower numbers indicate an ability to access greater amounts of cash flows per dollar invested.

Price-to-dividend ratio: Refers to the index price divided by the trailing 12-month dividends.

Price-to-earnings (P/E) ratio: Share price divided by earnings per share. Lower numbers indicate an ability to access greater amounts of earnings per dollar invested.

Primary balance: Equals the government budget balance (revenues minus expenditures) before interest payments.

Primary Market – The primary market is the market where shares of an ETF are created or redeemed

Principal facilitation: An execution whereby the broker takes on the risk of the execution. In most cases, the client trades at an agreed upon price and the broker then goes out and hedges themselves afterwards.

Productivity: Measure of efficiency that details how much output is obtained per unit of input.

Productivity growth: The efficiency with which resources are used to generate economic output. Increasing levels indicate an ability to produce more with less.

Profit expectations: Compilation of analyst estimates for earnings per share over the coming 12-month period. These are estimates that may be subject to revision or prove to be incorrect over time.

Profit margins: Net income divided by total sales. Higher values indicate a greater fraction of each dollar of sales being left to the firm and its owners after expenses are accounted for.

Purchases: Refers to the ongoing monthly purchases of both U.S. Treasury and mortgage-backed securities of over $80 billion.

Purchasing Managers’ Index (PMI): An indicator of the economic health of the manufacturing sector. The PMI is based on five major indicators: new orders, inventory levels, production, supplier deliveries and the employment environment.

Purchasing power parity: Academic concept stating that exchange rates should adjust so that equivalent goods and services cost the same across countries, after accounting for exchange-rate differences.

Qualified dividends: Dividend paid by corporations meeting certain criteria defined by the Internal Revenue Service and therefore eligible in certain instances to be taxed at rates below a tax filer’s tax bracket on ordinary income.

Quality: Refers to average three-year return on equity and average three-year return on assets, which are used as selection factors.

Quantitative and qualitative monetary easing (QQE): A central bank monetary policy occasionally used to increase the money supply by buying government securities or other securities from the market. Quantitative easing increases the money supply by flooding financial institutions with capital, in an effort to promote increased lending and liquidity.

Quantitative Easing (QE): A government monetary policy occasionally used to increase the money supply by buying government securities or other securities from the market. Quantitative easing increases the money supply by flooding financial institutions with capital, in an effort to promote increased lending and liquidity.

Quartile: Statistical measure that groups a series of values into four groups after ranking them from lowest to highest. The first quartile will have the lowest values, whereas the fourth quartile will have the highest.

R-squared: Represents the percentage of a fund or security’s movements that can be explained by the independent variables

Real assets: Assets that have their own value independent of their price, typically used to mitigate the potential impact of inflation lessening the purchasing power of an investor’s home currency.

Real effective exchange rate: The weighted average of a country’s currency relative to an index or basket of other major currencies, adjusted for the effects of inflation.

Real estate investment trust (REIT): Investment structure containing a basket of different exposures to real estate, be it directly in properties or in mortgages. Returns predominantly relate to changes in property values and income from rental payments.

Real growth potential: Potential rate of growth for an economy given that a set of policy assumptions are realized.

Real growth: Refers to the rate of economic growth with the inflation rate subtracted from it.

Real interest rate: Interest rate accounting for the impact of inflation. From the nominal interest rate, which does not account for the impact of inflation, the rate of inflation is subtracted to get to the real interest rate.

Real policy rate: Reflects the policy rate controlled by the central bank, net of the expected inflation rate.

Real Time Calculations – A price calculation used if the basket is open to calculate the current price of a security also known as “fair value”

Real yield: the annual interest rate that an investor demands for holding a bond to maturity including the impact of inflation.

Rebalance: An index is created by applying a certain set of selection and weighting rules at a certain frequency. WisdomTree rebalances, or re-applies its rules based selection and weighting process on an annual basis.

Reconciliation process: A process established by the Congressional Budget Act of 1974 by which Congress changes existing laws to conform tax and spending levels to the levels set in a budget resolution. Used in recent decades as a parliamentary tactic for resolving disputes in budget-related bills, the process limits debate and thereby bypasses Senate filibusters. This makes it possible for a Party in control of the Senate to pass controversial legislation with as little as 50 Senate votes, assuming the Vice president casts the tie-breaking vote. The Omnibus Budget Reconciliation Act of 1993, which raised top marginal tax rates to 39.6%, was passed using the reconciliation process.

Reflation: The term is used to describe the first phase of economic recovery after a period of contraction. This period is typically characterized by the act of stimulating the economy through accommodative central bank policies and reducing taxes, to bring growth and inflation back up to the long-term trend.

Reflationary: Characterized by an environment of rising price levels.

Regression analysis: statistical process for estimating the relationships among variables. It helps one understand how the typical value of the dependent variable (Y- variable) changes when any one of the independent variables is varied, while the other independent variables are held fixed.

Regular cash dividends: Dividends that companies indicate they will commit to paying on an ongoing basis at a set frequency.

Relative price: Refers to the share price of the ETF. A large demand for shares, all other things being equal, would be assumed to increase this price.

Relative value: The relationship between a particular attribute, e.g., a dividend, and the firm’s share price compared to that of another firm.

Repo rates: Repo rate is the rate at which the central bank of a country lends money to commercial banks in the event of any shortfall of funds.

Reserve currency: A foreign currency held by a central bank or monetary authority as a long-term store of value.

Reserve requirements: Mandated amounts of cash that banks must hold on hand to cover their liabilities.

Return on assets (ROA): Firm profits (after accounting for all expenses) divided by the firm’s total assets. Higher numbers indicate greater profits relative to the level of assets utilized to generate them.

Return on Equity (ROE): Measures a corporation’s profitability by revealing how much profit a company generates with the money shareholders have invested.

Revenue sharing: The practice of sharing operating profits with a company’s employees, or of sharing the revenues resulting between companies in an alliance.

Reverse Repo Rate: Reverse repo rate is the rate of interest that banks get when they keep their surplus money with the RBI.

Risk: Also standard deviation, which measures the spread of actual returns around an average return during a specific period. Higher risk indicates greater potential for returns to be farther away from this average.

Risk capital: When a broker deal firm accepts the risk of holding a certain number of shares of a particular security in order to facilitate trading in that security.

Risk of default: the risk that a borrower will not meet their contractual obligations in conjunction with an investment.

Risk premium: Equity investments are not risk free, but it is thought that investors buy stocks because the returns they expect are high enough to allow them to take the risk.

Risk sentiment: The degree of comfort an investor has for tolerating market risk.

Risk-adjusted returns: Returns measured in relation to their own variability. High returns with a high level of risk indicate a lower probability that actual returns were close to average returns. High returns with a low level of risk would be more desirable, as they indicate a higher probability that actual returns were close to average returns.

Risk-free rate: Typically an interest rate on a bond issued by a government entity, where the risk of default is so small as to be deemed nonexistent.

Riskier assets: Assets not backed by the full faith and credit of a government entity.

Rosneft -Russia-based company engaged in exploration, development, production and sale of crude oil and gas, as well as refining, transportation and sale of petroleum products.

Russell 1000 Growth Index: A measure of the large-cap growth segment of the U.S. equity universe, selecting from the Russell 1000 Index.

Russell 1000 Index: A measure of the performance of the 1,000 largest companies by market capitalization in the Russell 3000 Index.

Russell 1000 Value Index: A measure of the large-cap value segment of the U.S. equity universe, selecting from the Russell 1000 Index.

Russell 2000 Growth Index: Measures the performance of the small-cap growth segment of the U.S. equity universe. It includes those Russell 2000 Index companies with higher price-to-book ratios and higher forecasted growth values.

Russell 2000 Index: measures the performance of the small-cap segment of the U.S. equity universe. The Russell 2000 is a subset of the Russell 3000 Index representing approximately 10% of the total market capitalization of that index. It includes approximately 2000 of the smallest securities based on a combination of their market cap and current index membership.

Russell 2000 Value Index: measures the performance of small-cap value segment of the U.S. equity universe. It includes those Russell 2000 Index companies with lower price-to-book ratios and lower forecasted growth values.

Russell 3000 Growth Index: Measures the performance of the Russell 3000 Index constituents with growth characteristics.

Russell 3000 Index: Measures the performance of the 3,000 largest U.S. companies based on total market capitalization.

Russell 3000 Value Index: Measures the performance of the Russell 3000 Index constituents with value characteristics.

Russell Midcap Growth Index: Measures the performance of the mid-cap growth segment of the U.S. equity universe. It includes those Russell Midcap Index companies with higher price-to-book ratios and higher forecasted growth values.

Russell Midcap Index: The Russell Midcap Index measures the performance of the mid-cap segment of the U.S. equity universe. The Russell Midcap is a subset of the Russell 1000 Index. It includes approximately 800 of the smallest securities based on a combination of their market cap and current index membership.

Russell MidCap Value Index: measures the performance of the mid-cap value segment of the U.S. equity universe. It includes those Russell Midcap Index companies with lower price-to-book ratios and lower forecasted growth values.

S&P 500 Consumer Staples Index: Market capitalization weighted measure of the performance of companies within the S&P 500 Index that are in the consumer staples sector.

S&P 500 Equal Weight Index: Designed to track the equally weighted performance of the 500 constituents in the S&P 500 Index.

S&P 500 Financials Sector Index: comprises those companies included in the S&P 500 that are classified as members of the GICS® financials sector.

S&P 500 Growth Index: A market capitalization-weighted benchmark designed to measure the growth segment of the S&P 500 Index.

S&P 500 Health Care Index: Market capitalization weighted measure of the performance of companies within the S&P 500 Index that are in the health care sector.

S&P 500 Index: Market capitalization-weighted benchmark of 500 stocks selected by the Standard and Poor’s Index Committee designed to represent the performance of the leading industries in the United States economy.

S&P 500 Sector Sub-Indexes: Composed of companies within the broad S&P 500 Index classified into indexes encompassing each of the following 10 GICS Industry sectors: Consumer Discretionary, Consumer Staples, Energy, Financials, Health Care, Industrials, Information Technology, Materials, Telecommunication Services and Utilities.

S&P 500 Telecommunication Services Index: Market capitalization weighted measure of the performance of companies within the S&P 500 Index that are in the telecommunication services sector.

S&P 500 Utilities Index: Market capitalization weighted measure of the performance of companies within the S&P 500 Index that are in the Utilities sector.

S&P 500 Value Index: A market capitalization-weighted benchmark designed to measure the value segment of the S&P 500 Index.

S&P BMI Emerging Markets Low Volatility Index: Index designed to measure the performance of the least volatile stocks in the S&P Emerging Plus LargeMidCap Index and S&P Global BMI sub-index.

S&P BSE SENSEX (S&P Bombay Stock Exchange Sensitive Index): A free-float market capitalization-weighted stock market index of 30 well-established and financially sound companies listed on BSE Ltd.

S&P Europe 350 Index: A float adjusted market capitalization-weighted measure of the performance of large cap equities within European markets.

S&P GSCI Index: leading measure of general commodity price movements and performance over time.

S&P High Yield Dividend Aristocrats Index: Designed to track the performance of dividend-paying companies in the U.S. that have increased their annual dividend payments for the last 20 or more consecutive years.

S&P Indices Versus Active (SPIVA®): Measures the performance of actively managed funds against their relevant S&P index benchmarks.

S&P International Dividend Opportunities Index: Designed to measure the performance of companies in developed international markets with relatively higher dividend yields that meet other criteria defined by Standard & Poor’s. Weighting is by dividend yield.

S&P MidCap 400 Growth Index: Provides investors with a measure of the performance of the growth segment of the S&P MidCap 400 Index.

S&P MidCap 400 Index: provides investors with a benchmark for mid-sized companies. The index covers over 7% of the U.S. equity market, and seeks to remain an accurate measure of mid-sized companies, reflecting the risk and return characteristics of the broader mid-cap universe on an on-going basis.

S&P MidCap 400 Value Index: Provides investors with a measure of the performance of the value segment of the S&P MidCap 400 Index.

S&P SmallCap 600 Growth Index: A market capitalization-weighted measure of the performance of small-cap growth equities within the United States, with constituents required to demonstrate profitability prior to gaining initial inclusion.

S&P SmallCap 600 Index: Market capitalization-weighted measure of the performance of small cap equities within the United States, with constituents required to demonstrate profitability prior to gaining initial inclusion.

S&P SmallCap 600 Value Index: A market capitalization-weighted measure of the performance of small-cap value equities within the United States, with constituents required to demonstrate profitability prior to gaining initial inclusion.

S&P/Case-Shiller Home Price Indexes: A group of indexes that tracks changes in home prices throughout the United States. The indexes are based on a constant level of data on properties that have undergone at least two arm’s length transactions. Case-Shiller produces indexes representing certain metropolitan statistical areas (MSA) as well as a national index.

S&P/LSTA U.S. Leveraged Loan 100 Index: designed to reflect the performance of the largest loan facilities in the leveraged loan market

Safe-haven: Characterized by being a potentially desirable focal point of investment flows during periods of increased volatility and market risk. Safe-haven is not synonymous with risk-free.

Sales per share: Total sales divided by the number of shares outstanding. Measured as a percentage change as of the annual Index screening date compared to the prior 12 months. Higher values indicate greater growth orientation.

SEC 30-Day Yield: The yield figure reflects the dividends and interest earned during the period, after deduction of the Fund’s expenses. This is also referred to as the “standardized yield.”

Second arrow policies: This refers to the component of Abenomics policy that is focused upon spending that the Japanese government can undertake from a fiscal standpoint to attempt to stimulate growth.

Secondary market: A market where investors purchase or sell securities or assets from or to other investors, rather than from issuing companies themselves—exchanges such as the New York Stock Exchange and the NASDAQ—are secondary markets.

Secondary market liquidity: The liquidity shown visibly on the exchange. When you pull up a “quote” in an ETF, you will see the secondary market liquidity shown by the size offered on the bid and the ask.

Secondary: Refers to a “secondary offering” of stock, in which a firm increases its number of shares outstanding

Sector-specific exposures: Strategies that specifically generate exposure to a single industry or sector rather than diversifying across all sectors.

Securities Market Programme (SMP): a program of interventions by the ECB in debt markets in order to re-establish the efficient transmission of monetary policy

Securitized loans: Investment that represents a pooling or grouping together of many people’s loans utilized to make large purchases, such as houses or cars. As they people pay their debts, the security generates cash flows.

SELIC Rate: the benchmark overnight interest rate by which the Brazilian Central Bank seeks to affect monetary policy.

Semi-government: state and territory governments in Australia who help fund public infrastructure investments and manage regional balance sheets.

Senior loans: a privately arranged debt obligation between a company and a bank that is generally senior to other creditors

Sensex: An abbreviation of the Bombay Exchange Sensitive Index (Sensex) – the benchmark index of the Bombay Stock Exchange (BSE). It is composed of 30 of the largest and most actively-traded stocks on the BSE. Initially compiled in 1986, the Sensex is the oldest stock index in India.

Settlement: the process of exchanging a security for payment

Shadow banking system: A collection of non-bank financial intermediaries that provide services similar to traditional commercial banks.

Shanghai Composite Index: A stock market index of all A shares and B shares that are traded on the Shanghai Stock Exchange.

Share buybacks: Firms using cash to purchase their own outstanding shares; may positively impact the share price.

Share price: Measured as the cumulative change in share price for the 12 months leading up to the Index screening date. Higher values indicate greater growth orientation.

Sharpe ratio: Measure of risk-adjusted return. Higher values indicate greater return per unit of risk, specifically standard deviation, which is viewed as being desirable.

Short (or Short Position) – The sale of a borrowed security, commodity or currency with the expectation that the asset will fall in value, the opposite of Long (or Long Position)

Short-term rates: the rate of interest on a debt instrument maturing in two years or less.

Significant factor: Possesses a p-value less than 0.05, implying that the variable is significant at the 95th percentile

Single-B-credit rating: represents the middle level of a highly speculative credit risk according to Standard & Poor’s and Fitch. This level represents borrowers that are more vulnerable than BB rated issuers, but still currently have the capacity to meet its commitments.

Size capitalization: A measure by which a company’s size is classified. Large caps are usually classified as companies that have a market cap over $10 billion. Mid caps range from $2 billion to $10 billion. Small caps are typically new or relatively young companies and have a market cap between $200 million to $2 billion.

Size Factor: the average returns of small portfolios minus the average returns of the large portfolios after adjusting for growth or value tendencies.

Size on the screen: The amount of shares that are bid for and offered that can be seen by looking at the quote.

Slippage: The difference between the expected price of conducting a transaction compared to the actual execution price.

Small: Characterized by exposure to the bottom 10% of market capitalization within the Value, Blend or Growth style zones with the majority of the fund’s weight.

Small caps: Include listed U.S. equities on the New York Stock Exchange, NASDAQ and American Stock Exchange and include the bottom 50% of market capitalization.

Small-cap dividend growth: Refers to the universe of the WisdomTree U.S. SmallCap Dividend Growth Index.

Small-cap dividend: Refers to the universe of the WisdomTree SmallCap Dividend Index.

Small-cap growth: Refers to the Russell 2000 Growth Index universe.

Smart Beta: A term for rules-based investment strategies that don’t use conventional market-cap weightings.

Sourcing block liquidity: Calling the market makers and liquidity providers and find who can make the client a market in the size they are requesting (buy or sell).

Sovereign: A national government.

Sovereign Debt: Bonds issued by a national government in a foreign currency, in order to finance the issuing country’s growth.

Sovereign Wealth Fund: Pools of money derived from a country’s reserves, which are set aside for investment purposes.

Special dividends: A non-recurring distribution of company assets, usually in the form of cash, to shareholders.

Speculators: Individuals—typically taking a shorter-term view—looking to trade quickly in and out of a position in an attempt to access a financial gain that is based purely on the currency’s shifting exchange rate.

Spot currency: The foreign exchange rate of a currency available for immediate delivery.

Spot price: The current price at which a particular security can be bought or sold at a specified time and place.

Spread: Typically refers to a difference between a measure of yield for one asset class and a measure of yield for either a different subset of that asset class or a different asset class entirely.

Standard deviation: measure of how widely an investment or investment strategy’s returns move relative to its average returns for an observed period. A higher value implies more “risk”, in that there is more of a chance the actual return observed is farther away from the average return.

Starting dividend yield: Refers to the trailing 12-month dividend yield for an equity index at the start of a period, in this case 6/30/1998, 15 years ago.

State-owned enterprises: Companies in which governments have a significant ownership stake and the potential to influence the firms’ actions over time.

Statutory liquidity ratio (SLR): The amount of money that is invested in pre-specified securities, predominantly central government and state government securities.

steepen: an increase in the spread between short-term interest rates and longer-term rates.

Sterilization: Activity undertaken by a central bank meant to mitigate the impact of other policies on changing the overall supply of money in an economy

Stewardship code: Aims to enhance the quality of engagement between asset managers and companies to help improve the long-term experience of shareholders.

Stock buybacks: When a company uses cash to purchase shares of its own stock within the market, which is thought to be supportive for the share price.

Stock options: Conveys to an executive the right to buy a number of shares of his firm’s stock at a pre-specified price at some time in the future. Stock option holders are not eligible for any dividend distributions to shareholders.

STOXX Europe 600 Index: The STOXX Europe 600 Index is derived from the STOXX Europe Total Market Index (TMI) and is a subset of the STOXX Global 1800 Index. With a fixed number of 600 components, the STOXX Europe 600 Index represents large, mid and small capitalization companies across 18 countries of the European region: Austria, Belgium, Denmark, Finland, France, Germany, Greece, Iceland, Ireland, Italy, Luxembourg, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland and the United Kingdom.

Stress tests: Standards applied, most typically to banks, meant to gauge how well these firms might be able to weather adverse market events

Structural budget deficit: General government deficit adjusted for cyclical factors and one-offs.

Style: Morningstar defines its style box along two axes—large, mid-cap and small, as well as value, blend and growth. If two strategies are in the same style box, it does not mean that they hold the exact same portfolios, but it means that it might be harder to generate significantly different returns, as compared to strategies in different style boxes.

Supranational: Organization (such as the World Bank or the International Monetary Fund) formed by two or more non-governmental organizations aimed at promoting economic development.

Swap: A swap is an agreement between two parties to exchange payments based on a reference asset, which may be a currency or interest rate but also may be a single asset, a pool of assets or an index of assets.

Tapering: A shift in monetary policy by which the Federal Reserve would begin decreasing the amount of bonds it purchases.

Targeted longer-term refinancing operations (TLTROs): a periodic open market operation executed via tender offers which mature in September 2018

Tax deductible: When a particular expense can be subtracted from a firm’s income prior to the calculation of its tax liability.

Tax-deferred savings accounts: Accounts that allow for the postponement of certain types of taxes for specified periods of time.

Tax-insensitive investors: Those who utilize accounts that are not subject to year-by-year taxation. Examples include individual retirement accounts, pension funds, 401(k)’s, endowments and annuities.

Tax-preferred income: Refers to the fact that dividend tax rates tend to be lower than ordinary income tax rates.

The Qatar Exchange Index: A capitalization-weighted index comprising the 20 most highly capitalized and liquid companies traded on the Qatar Exchange.

Third arrow policies: The part of Japan’s Abenomics process of reform that is focused on structural changes intended to promote economic growth.

Third Plenum: Known more formally as the Third Plenary Session of the Central Committee of the Communist Party of China. This meeting allows Party leaders to lay out a blueprint for achieving the political and economic goals of the government.

Three major ratings agencies: Includes Standard & Poor’s, Moody’s, and Fitch.

Tighten: a decline in the amount of compensation bond holders require to lend to risky borrowers. When spreads tighten, the market is implying that borrowers pose less risk to lenders.

Time value of money: the amount of compensation an investor demands for foregoing current consumption.

TIPS: Treasury Inflation Protected Securities

Tokyo Stock Price Index (TOPIX): A free float-adjusted market capitalization-weighted index that is calculated based on all the domestic common stocks listed on the Tokyo Stock Exchange First Section.

Top-down: A method of analysis that involves looking at the “big picture” first and then analyzing the details of smaller components.

TOPIX 500 Index: A capitalization-weighted index designed to measure the performance of the 500 most liquid stocks with the largest market capitalization that are members of the TOPIX.

TOPIX Real Estate Index (TPREAL): A market capitalization weighted index of real estate companies in the TOPIX stock index.

Total attribution: Quantitative comparison of the performance between one index or investment and another, based on the difference in total returns between the two. Attribution measures the contribution to relative performance of certain characteristics, be it differences in underlying stock holdings within sectors or weighting different sectors more or less heavily.

Total market: Refers to the Russell 3000 Index universe.

Tracking Error: A divergence between the price behavior of a position or a portfolio and the price behavior of a benchmark.

Trade deficit: The amount by which the cost of a country’s imports exceeds the value of its exports.

Trade flows: the movement or transfer of assets to facilitate the exchange of goods and services.

Trading band: The Chinese government manages the value of its currency by allowing it to float against the U.S. dollar by a predetermined amount each day.

Trailing 12 month earnings: is the sum of a company’s earnings for the previous 12 months

Trailing 12-month cash dividends: Firm’s cash dividends paid over the prior 12-month period

Trailing 12-Month Dividend Growth: Dividends paid over the prior 12-months as of a particular date are summed and compared to dividends paid over the prior 12-months as of a different date at some point occurring earlier. The percentage change measured between these two points is equivalent to the growth rate in trailing 12-month dividends.

Trailing 12-month dividend per share: A firm’s dividends paid over the prior 12-month period, divided by the number of shares outstanding.

Trailing 12-month dividend yield: Dividends over the prior 12-months are added together and divided by the current share price. Higher values indicate more dividends are being generated per unit of share price.

Trailing 12-month dividends: Dividends paid over the prior 12 months summed for the constituents within an index.

Trailing 12-month year-end dividend yield: Dividends over the prior 12-months at most recent calendar year-end are added together and divided by the current share price. Higher values indicate more dividends are being generated per unit of share price.

Trailing Price-to-earnings (P/E) ratio: Share price divided by trailing 12-month earnings per share. Lower numbers indicate an ability to access greater amounts of earnings per dollar invested.

Tranches: a portion of a larger trade.

Transfer risk: The risk that a company’s assets or profits are appropriated by the government.

Transparency: The extent to which investors have ready access to any required financial information about a company, such as price levels, market depth and audited financial reports.

Treasury: Debt obligation issued by the U.S. government with payments of principal and interest backed by the full faith and credit of the U.S. government.

Treasury Inflation-Protected Securities (TIPS): Bonds issued by the U.S. government. TIPS provide protection against inflation. The principal of a TIPS increases with inflation and decreases with deflation, as measured by the Consumer Price Index. When a TIPS matures, you are paid the adjusted principal or original principal, whichever is greater.

Treasury notes: A debt obligation issued by the United States government that matures in less than 30 years

Treasury yield: The return on investment, expressed as a percentage, on the debt obligations of the U.S. government.

TSE Mothers Index: A market capitalization-weighted measure of the performance of small-cap stocks listed primarily in Japan.

Twin Deficit: a macroeconomic occurrence where a country runs both a current account deficit and a government budget deficit.

U.S. 10 Year Treasury Note: A debt obligation issued by the United States government that matures in 10 years.

U.S. 5 Year Treasury Note: A debt obligation issued by the United States government that matures in 10 years.

U.S. Agg Corporate Index: A broad-based benchmark that measures the investment grade, U.S. dollar-denominated, fixed-rate, taxable corporate bond market. It includes USD-denominated securities publicly issued by U.S. and non-U.S. industrial, utility, and financial issuers that meet specified maturity, liquidity, and quality requirements.

U.S. Corporate High-Yield Index: measures the market of USD-denominated, non-investment grade, fixed-rate, taxable corporate bonds. Securities are classified as high yield if the middle rating of Moody’s, Fitch, and S&P is Ba1/BB+/BB+ or below, excluding emerging market debt.

U.S. Dividend-Paying Market – The market, or group, of U.S. companies that pay dividends to their shareholders

U.S. dollar (USD) sovereigns: debt denominated in U.S. dollars issued by an emerging market government.

U.S. Treasury Bond: a debt security issued by the United States government.

U.S. Treasury futures contract: a standardized contract to buy or sell a Treasury security on a specified date at a predetermined price.

Underlying basket: securities held by a fund to replicate an investment strategy or index.

Underlying liquidity: The liquidity in the underlying basket of the ETF. This liquidity is not always visible on the stock exchange, but market makers can facilitate large investments into ETFs if there is sufficient underlying liquidity.

Unhedged: Strategy that includes the performance of both the underlying asset as well as the currency in which it is denominated. The performance of the currency can either help or hurt the total return experienced.

Unit labor costs: Measure of economic productivity, indicating the efficiency of labor utilization in an economy.

Upside: Currency appreciation.

Upside capture: A measure of how one index performs during periods when a benchmark index is moving in the positive direction. A value of 100% indicates that both would tend to move upward at the exact same pace.

Valuation: Refers to metrics that relate financial statistics for equities to their price levels to determine if certain attributes, such as earnings or dividends, are cheap or expensive.

Valuation risk: The risk of buying or over-weighting a particular stock that has appreciated significantly in price relative to its dividends, earnings or any other fundamental metric.

Value: Characterized by lower price levels relative to fundamentals, such as earnings or dividends. Prices are lower because investors are less certain of the performance of these fundamentals in the future.

Value Factor: the average return of value portfolios minus the average returns of growth portfolios after adjusting for size.

Value stocks: Stocks whose share prices are lower relative to their earnings per share or dividends per share. Investors pay less for these stocks because their earnings or dividend growth expectations going forward are lower.

Velocity of money: Measure of the frequency that money changes hands within a broader economy. Higher levels indicate the potential for greater levels of economic activity.

Very large-size markets: Markets that are greater than the average daily trading volume of the fund.

Volatility: A measure of the dispersion of actual returns around a particular average level.

Weight of optimized constituents: The weight of the constituents excluded as a result of any optimization. A lower number indicates that the assets tracking the Index are closer to holding every security within the Index in its prescribed weight.

Weighted average market cap: Measure of the average market capitalization that takes into account how constituents are weighted—weighting large market capitalization firms more heavily will tend to increase this figure.

Wholesale Prince Index (WPI): An index that measures and tracks the changes in price of goods in the stages before the retail level. Wholesale price indexes (WPIs) report monthly to show the average price changes of goods sold in bulk, and they are a group of the indicators that follow growth in the economy.

Widen: an increase in the amount of compensation bond holders require to lend to risky borrowers. When spreads widen, the market is implying that borrowers pose greater risk to lenders.

Winners: Stocks that have delivered positive performance since the investor made their initial investment.

WisdomTree Australia Dividend Index: Index designed to measure the performance of dividend-paying companies in Australia. At maximum the 10-largest Australian dividend-paying companies are selected from each of the 10 sectors on the basis of their market capitalizations. Weighting is by dividend yield.

WisdomTree China Dividend ex-Financials Index:The Index measures the performance of dividend paying stocks outside financials sector. It is comprised of the 10 largest stocks selected by float adjusted market capitalization in each sector except financials, selected from a universe of Chinese companies with at least $1 billion of float-adjusted market capitalization.

WisdomTree DEFA Equity Income Index: A fundamentally weighted index that measures the performance of dividend-paying companies in the industrialized world, excluding Canada and the United States, that pay regular cash dividends and are among the 30% highest-yielding equities within the WisdomTree DEFA Index as of the annual Index screening date.

WisdomTree Dividend ex-Financials Index: The Index measures the performance of high dividend-yielding stocks outside of the financial sector. The Index consists primarily of large- and mid-capitalization companies listed on major U.S. stock exchanges. Weighting is by dividend yield.

WisdomTree Dividend Index: Measures the performance of dividend-paying companies incorporated in the United States that pay regular cash dividends and meet WisdomTree’s eligibility requirements. Weighted by indicated cash dividends.

WisdomTree Dividend Index of Europe, Far East Asia and Australasia (WisdomTree DEFA Index): A fundamentally weighted index that measures the performance of dividend-paying companies in the industrialized world, excluding Canada and the United States, that pay regular cash dividends and that meet other liquidity and capitalization requirements. It comprises companies incorporated in 16 developed European countries, Japan, Australia, New Zealand, Hong Kong and Singapore. Companies are weighted in the Index based on annual cash dividends paid.

WisdomTree Earnings 500 Index: A fundamentally weighted index that measures the performance of earnings-generating companies within the large-capitalization segment of the U.S. Stock Market. Companies in the index are incorporated and listed in the U.S and have generated positive cumulative earnings over their most recent four fiscal quarters prior to the index measurement date. The index is comprised of the 500 largest companies ranked by market capitalization in the WisdomTree Earnings Index.

WisdomTree Earnings Index: Fundamentally-weighted index that measures the performance of earnings-generating companies within the broad U.S. stock market.

WisdomTree Emerging Markets Consumer Growth Index: A fundamentally weighted index designed to measure the performance of emerging market equities that have a potential heightened sensitivity to increased emerging market consumption. Weighting is by earnings.

WisdomTree Emerging Markets Dividend Growth Index: A fundamentally weighted index designed to track the performance of dividend-paying emerging market companies that WisdomTree believes have the potential to increase their dividends due to certain factors, which include estimated earnings growth, return on equity and return on assets. Weighting is by trailing 12-month cash dividends.

WisdomTree Emerging Markets Dividend Index: A cash dividend-weighted Index measuring the performance of dividend-paying equities incorporated within emerging markets.

WisdomTree Emerging Markets Equity Income Index: A subset of the WisdomTree Emerging Markets Dividend Index measuring the performance of the higher-yielding stocks as measured by trailing 12-month dividend yields, weighted by cash dividends.

WisdomTree Emerging Markets SmallCap Dividend Index: A subset of the WisdomTree Emerging Markets Dividend Index measuring the performance of the smallest firms by market capitalization weighted by cash dividends.

WisdomTree Equity Income Index: Measures the performance of the 30% highest-yielding dividend-paying equities within the WisdomTree Dividend Index, weighted by indicated cash dividends.

WisdomTree Europe Dividend Growth Index: A fundamentally weighted index that measures the performance of dividend-paying common stocks with growth characteristics selected from the WisdomTree DEFA Index. The Index comprises companies from the eligible universe based on their combined ranking of growth and quality.

WisdomTree Europe Dividend Index: Index designed to measure the performance of dividend-paying companies within Europe.

WisdomTree Europe Hedged Equity Index: Index designed to provide exposure to European equities while at the same time neutralizing exposure to fluctuations between the Euro and the U.S. dollar. Constituents are European dividend-paying firms with a least 50% of their revenues from outside of Europe. Weighting is by cash dividends paid.

WisdomTree Europe SmallCap Dividend Index: A fundamentally weighted index meant to measure the performance of small-cap European dividend-paying equities weighted by cash dividends paid.

WisdomTree Germany Hedged Equity: broadly focused measure of the equity performance of dividend-paying equities within Germany, with specific methodology focusing on hedging the performance of the euro against the U.S. dollar. Weighting is by cash dividends paid.

WisdomTree Global Dividend Index: WisdomTree’s broadest measure of dividend-paying stocks, including firms incorporated in emerging markets, developed international markets and the United States, weighted by cash dividends.

WisdomTree Global ex-U.S. Dividend Index: Designed to measure the performance of dividend-paying companies outside the United States. Weighting is by dividend stream.

WisdomTree Global ex-U.S. Dividend Growth Index: Designed to measure the performance of dividend-paying companies outside the United States with what WisdomTree believes to be potential for future dividend increases. Weighting is by dividend stream.

WisdomTree Global ex-U.S. Utilities Index: a fundamentally weighted index that measures the performance of utilities companies from developed and emerging markets outside of the United States classified as being part of the “Global Utilities” sector.

WisdomTree Global ex-US Real Estate Index:A fundamentally weighted index that measures the performance of companies from developed and emerging markets outside of the United States that are classified as being part of the “Global Real Estate” sector.

WisdomTree India Earnings Index: A fundamentally weighted Index that measures the performance of companies incorporated and traded in India that are profitable and that are eligible to be purchased by foreign investors. Companies are weighted in the Index based on their earnings in their fiscal year prior to the Index measurement date, adjusted for a factor that takes into account shares available to foreign investors.

WisdomTree International Dividend ex-Financials Index: Measures the performance of high dividend-yielding stocks outside the financial sector. Selects the 10 largest dividend-paying stocks within each sector outside of financials, then the resulting list is weighted by dividend yield.

WisdomTree International Hedged Dividend Growth Index: Designed to provide exposure to the developed market companies while neutralizing exposure to fluctuations between the value of foreign currencies and the U.S. dollar. Comprises companies from the WisdomTree DEFA Index with the best combined rank of growth and quality factors.

WisdomTree International LargeCap Dividend Index: A fundamentally weighted index that measures the performance of the large-capitalization segment of the dividend-paying market in the industrialized world outside the U.S. and Canada. The Index comprises the 300 largest companies ranked by market capitalization from the WisdomTree DEFA Index. Companies are weighted in the Index based on annual cash dividends paid.

WisdomTree International MidCap Dividend Index: A fundamentally weighted index that measures the performance of the mid-capitalization segment of the US dividend-paying market. The Index is comprised of the companies that compose the top 75% of the market capitalization of the WisdomTree Dividend Index after the 300 largest companies have been removed. The index is dividend weighted annually to reflect the proportionate share of the aggregate cash dividends each component company is projected to pay in the coming year, based on the most recently declared dividend per share.

WisdomTree International SmallCap Dividend Index: A fundamentally weighted index measuring the performance of the small-capitalization segment of the US dividend-paying market. The Index is comprised of the companies that compose the bottom 25% of the market capitalization of the WisdomTree Dividend Index after the 300 largest companies have been removed. The index is dividend weighted annually to reflect the proportionate share of the aggregate cash dividends each component company is projected to pay in the coming year, based on the most recently declared dividend per share.

WisdomTree Japan Hedged Capital Goods Index: An index weighted by float-adjusted market capitalization, designed to provide exposure to Japanese capital goods companies while at the same time neutralizing exposure to fluctuations between the yen and the U.S. dollar.

WisdomTree Japan Hedged Equity Index: Index designed to provide exposure to Japanese equity markets while at the same time neutralizing exposure to fluctuations of the Japanese yen movements against the U.S. dollar. Constituents are dividend-paying companies incorporated in Japan that derive less than 80% of their revenue from sources in Japan. Weighting is by cash dividends paid.

WisdomTree Japan Hedged Financials Index: An index weighted by float-adjusted market capitalization, designed to provide exposure to Japanese financial companies while at the same time neutralizing exposure to fluctuations between the yen and the U.S. dollar.

WisdomTree Japan Hedged Health Care Index: An index weighted by float-adjusted market capitalization, designed to provide exposure to Japanese health care companies while at the same time neutralizing exposure to fluctuations between the yen and the U.S. dollar.

WisdomTree Japan Hedged Real Estate Index: An index weighted by float-adjusted market capitalization, designed to provide exposure to Japanese real estate companies while at the same time neutralizing exposure to fluctuations between the yen and the U.S. dollar.

WisdomTree Japan Hedged SmallCap Equity Index: Designed to provide exposure to Japanese equity markets while at the same time neutralizing fluctuations of the Japanese yen movements against the U.S. dollar.

WisdomTree Japan Hedged Tech, Media and Telecom Index: An index weighted by float-adjusted market capitalization, designed to provide exposure to Japanese tech, media and telecom companies while at the same time neutralizing exposure to fluctuations between the yen and the U.S. dollar.

WisdomTree Japan SmallCap Dividend Index: Designed to provide exposure to dividend-paying small-capitalization companies in Japan.

WisdomTree Korea Hedged Equity Index: Designed to measure the performance of Korean equities that derive less than 80% of their revenues from within South Korea, while at the same time hedging the impact resulting from the performance of the Korean won. The Index is weighted by earnings.

WisdomTree LargeCap Dividend Index: Measures the performance of the 300 largest companies in the WisdomTree Dividend Index ranked by market capitalization. Weighting is by indicated cash dividends.

WisdomTree MidCap Dividend Index: A fundamentally weighted index that measures the performance of the mid-capitalization segment of the U.S. dividend-paying market. The Index comprises the companies that constitute the top 75% of the market capitalization of the WisdomTree Dividend Index after the 300 largest companies have been removed. The index is dividend weighted annually to reflect the proportionate share of the aggregate cash dividends each component company is projected to pay in the coming year, based on the most recently declared dividend per share.

WisdomTree MidCap Earnings Index: Fundamentally-weighted index that measures the performance of the top 75% of the market capitalization of the WisdomTree Earnings Index after the 500 largest companies have been removed.

WisdomTree Middle East Dividend Index: A fundamentally weighted index that measures the performance of companies in the Middle East that pay regular cash dividends on shares of common stock and meet specified requirements as of the Index measurement date. The Index is dividend weighted and updated to reflect market prices and exchange rates.

WisdomTree SmallCap Dividend Index: A fundamentally weighted index measuring the performance of the small-capitalization segment of the U.S. dividend-paying market. The Index comprises the companies that constitute the bottom 25% of the market capitalization of the WisdomTree Dividend Index after the 300 largest companies have been removed. The Index is dividend weighted annually to reflect the proportionate share of the aggregate cash dividends each component company is projected to pay in the coming year, based on the most recently declared dividend per share.

WisdomTree SmallCap Earnings Index (WTSEI): measures the performance of earnings-generating companies within the small-capitalization segment of the U.S. Stock Market. The index is comprised of the companies in the bottom 25% of the market capitalization of the WisdomTree Earnings Index after the 500 largest companies have been removed.

WisdomTree U.S. Dividend Growth Index: A fundamentally weighted index designed to track the performance of dividend-paying companies in the U.S. that WisdomTree believes have the potential to increase their dividends due to certain factors, which include estimated earnings growth, return on equity and return on assets. Weighting is by indicated cash dividends.

WisdomTree U.S. SmallCap Dividend Growth Index (WTSDG): A fundamentally weighted index designed to track the performance of dividend-paying companies in the U.S. small-cap equity universe that WisdomTree believes have the potential to increase their dividends due to certain factors, which include estimated earnings growth, return on equity and return on assets. Weighting is by indicated cash dividends.

WisdomTree United Kingdom Hedged Equity Index: Designed to provide exposure to United Kingdom equities while at the same time neutralizing exposure to fluctuations between the British pound and the U.S. dollar. The Index is based on dividend-paying companies in the WisdomTree DEFA Index that are domiciled in the UK and are traded in British pounds, have at least $1 billion market capitalization and derive at least 80% of their revenue in the latest fiscal year from countries outside the UK. The component securities are weighted in the Index based on annual cash dividends paid with the following caps: maximum individual position capped at 5%, maximum sector weight capped at 25%

Write-downs: Occur when assets on a firm’s balance sheet are reduced in value in a way thought to be closer to what the market’s current valuation would be, should those assets need to be sold at present. The impact of this lowering in value is felt on the income statement in terms of lower earnings.

Yield curve: Graphical Depiction of interest rates on government bonds, with the current yield on the vertical axis and the years to maturity on the horizontal axis.

Yield premium: the additional amount of income investors require for holding a security.

Yield spread: the amount of incremental income a bondholder receives for assuming credit risk.

Yield to maturity: The single discount rate that equates the present value of a bond’s cash flows to its market price. Also referred to as the internal rate of return of a bond.

Yield to worst: The rate of return generated assuming a bond is redeemed by the issuer on the least desirable date for the investor.

Yield:The income return on an investment. Refers to the interest or dividends received from a security that is typically expressed annually as a percentage of the market or face value.

Zero duration strategies: Refer to WisdomTree’s Interest Rate Strategies that target an overall portfolio duration of zero; namely, the WisdomTree Barclays U.S. Aggregate Bond Zero Duration Fund and the WisdomTree BofA Merrill Lynch High Yield Bond Zero Duration Fund.