Dividend Yield Analysis
Current performance may be lower or higher than quoted. Investment returns and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Download the most recent month-end Performance Report. Past performance does not guarantee future results.
* Since inception Total Returns - Since inception Total Returns are cumulative for WisdomTree ETFs with less than one year of performance.
The WisdomTree International Real Estate Fund invests in companies that may be classified as Passive Foreign Investment Companies (PFICs). A PFIC is a foreign-based corporation that has one of the following attributes: 1. At least 75% of the corporation's gross income is considered "passive", or 2. At least 50% of the average assets held by such corporation during the taxable year produce passive income or held for the production of passive income. PFICs are common in the international real estate asset class. Investments in PFICs may result in greater distributions of ordinary income if there are any realized or unrealized gains in the PFIC holdings. Conversely, if there are any realized or unrealized losses in PFIC holdings, which had prior unrealized gains, the Fund’s ability to distribute ordinary income may be reduced.
WisdomTree Dividend Yield Analysis:
Dividend Yield is a seemingly simple concept that is capable of causing confusion for investors. Since dividends are a critical factor to the success of WisdomTree's funds, we have created a tool that allows you to look at yield from a variety of perspectives. Following is a review of each of the different ways to look at dividend yield.
Fund Distribution Yield:
Fund distribution yield is calculated by annualizing the most recent Fund distribution and dividing by the current Fund NAV. The yield represents a single distribution from the Fund and does not represent the total returns of the Fund.
For example, the WisdomTree Total Dividend Fund paid a quarterly dividend distribution on June 29, 2007, of $0.39819 per share. The fund's distribution yield on June 29, 2007 was 2.65% ($0.39819 * 4 / $60.04).
WisdomTree does not attempt to artificially stabilize this distribution rate. Nor does it return capital as some funds do in order to create the "illusion" of a higher yield.
As a result, it is possible that the Fund Distribution Yield may deviate from what may be expected based on the dividend yield of the underlying portfolios. There are several factors that may impact the Fund Distribution Yield. Firstly, the dividend distribution cycle of the securities held in the Fund will have an impact on the amount of dividends distributed by the Fund in a given distribution cycle. Although the WisdomTree Domestic Funds declare dividends on a quarterly frequency, which corresponds to the dividend distribution cycle for most U.S. corporations, the timing of dividend payments on securities held by a fund may not be perfectly aligned with the funds distribution cycle. In addition, companies outside the U.S. tend to pay dividends on a quarterly, semi-annual or annual basis and the dividends are not equally distributed over the cycles. These companies tend to pay larger dividends in first half of the year and smaller dividends in the second half of the year. The WisdomTree International Funds were not launched until June 16, 2006, and therefore missed out on many of the dividends paid by non US companies in the first half of 2006.
Secondly, A significant increase in assets during a given period can reduce the per share amount of dividends paid by an ETF (but not the total dollar amount). This happens because as assets grow more shares of an ETF are issued to meet rising demand. Dividends on portfolio securities received on a smaller asset base earlier in a distribution period are "spread out" over a larger asset base at the end of a distribution period. This does not mean your investment is diluted - because new investors buy shares at net asset value, which includes all accrued dividends on portfolio securities, the value of an investment in a fund is not diluted as a result of asset growth throughout a distribution period. However, because the cash received from dividends on portfolio securities at the beginning of a period may be spread out among a greater number of shares outstanding at the end of the period, asset growth may cause the per share cash dividend to be lower for that period. This issue is more prevalent among new ETFs and tends to level out over time.
SEC Standardized Yield:
The SEC Standardized Yield is a standard yield calculation developed and required by the Securities and Exchange Commission (SEC). It is based on the most recent 30-day period covered by the Fund's filings with the SEC. The yield figure reflects the dividends and interest earned during the period, after the deduction of the Fund's expenses. This is also referred to as the "Standardized Yield".
Portfolio Dividend Yield:
Portfolio Dividend Yield is the aggregate weighted yield on the portfolio securities held by a fund on a specified date. The Portfolio Dividend Yield is calculated on a daily basis and "looks through" to the actual holdings of the fund. It creates a snapshot each day of the weighted yield of each portfolio holding based on the 12 month trailing dividend per share divided by its current price. This does not represent any Funds actual distribution. The yield is NOT a current yield since no annualizing factor is used.
The Gross Portfolio Dividend Yield reflects the total amount of distributions on each security in the Fund's portfolio. For investments in U.S. securities, the gross yield and the net yield will be identical. In the case of foreign securities however, taxes are withheld by foreign governments. Each country has a different withholding rate. The Net Portfolio Dividend Yield is the Gross Yield less taxes based on a designated tax rate for each security of a foreign country represented in the Fund's portfolio. Investors may be able to receive a credit on their tax returns for taxes withheld by foreign governments - please check with your tax adviser.
WisdomTree shares are bought and sold at market price (not NAV) and are not individually redeemed from the Fund. Total Returns are calculated using the daily 4:00pm net asset value (NAV). Market price returns reflect the midpoint of the bid/ask spread as of the close of trading on the exchange where Fund shares are listed. Market price returns do not represent the returns you would receive if you traded shares at other times.
Annualized Implied Distribution Yield
The Annual Implied Distribution Yield is the annual yield a Fund investor would receive in distributions if the Fund were to make a hypothetical distribution today. The Annual Implied Distribution yield is calculated on a daily basis and is calculated by Annualizing the Current Rate per Share divided by the current Fund NAV. This does not represent any Funds actual distribution.
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.