Market Insights

Jeremy Schwartz
Director of Research


The Importance of a Relative Value Rebalance: Case Study of Europe

Each year, WisdomTree believes it is important to reset Index weights and exposures away from what has been driven by share price performance and toward what has actually occurred in terms of fundamentals. The following analysis focuses on the WisdomTree Europe Indexes, especially in the small-cap segment.

  • 07/01/2014 Japan as Traditional Value Play: Dividends Reach New Highs

    The WisdomTree annual rebalance is a key element of the added value of WisdomTree’s Index methodology. We interpret Japan’s current valuations and double-digit dividend growth as a very positive indicator of underlying market fundamentals. We believe these fundamentals, coupled with the ongoing third-arrow reforms, should help provide a notable foundation for potential future gains.

  • 06/18/2014 Looking under the Hood of International Smart Beta

    WisdomTree has one of the broadest sets of Indexes focused on international equities that are not weighted by market capitalization. In essence, we are looking to illustrate how these Indexes with at least five years of performance history were exposed to various factors.

  • 05/22/2014 European Economic and Markets Recovery: A Valuation and Growth Update

    Europe’s economy experienced six straight quarters of negative economic growth—or contraction—before returning to a positive growth rate—or expansion—in the second quarter of 2013. The European recovery has been supported by accommodative monetary policies, low inflation and a moderation in fiscal austerity. Consumer spending has improved, and manufacturing surveys are pointing toward expansion.

  • 05/08/2014 The Opportunity of European Dividend Growth

    Recently, European markets have performed strongly, with investors focusing on the economic recovery that has been building momentum. It is becoming difficult to remember that a few short years ago there was widespread debate about whether the European Monetary Union (EMU) would continue to exist.

  • 04/02/2014 Looking Under the Hood of Smart Beta

    A wide array of strategies are starting to have live performance histories greater than five years, making them eligible for consideration across a broader clientele. What are these various smart beta index strategies really doing when one looks under the hood?

  • 03/20/2014 The Forgotten Dividend Payers: Mid- and Small-Cap Equities

    When investors think of dividends, they tend to think of mature large-cap companies as the primary source, and as a result, we feel that many investors mistakenly overlook potentially attractive income options. Here we will discuss one segment of the market that often gets overlooked in the hunt for income-producing asset classes—mid- and small-cap dividend payers.

  • 02/06/2014 A Japan Strategist Roundtable Discussion

    WisdomTree has compiled a Japan Strategist roundtable—a compilation of views from three of the most widely followed Japan investment strategists. In separate one-on-one interviews, we asked these strategists to share their views on Japan’s equity markets, the economy, government initiatives and the currency.

  • 01/21/2014 Dividends: Fourth Consecutive Year of Double-Digit Growth

    WisdomTree conducts the annual rebalance of its U.S. Dividend Index family in December, with the annual screening date occurring on the last trading day of every November. This rebalance provides a plethora of data about how dividends for the U.S. equity markets have changed over time.

  • 01/08/2014 A Methodology That Takes Some Chips Off the Table After Strong Gains

    The market environment is always changing, with some years notable for their performance extremes. The November 30, 2012, to November 30, 2013, period was quite strong, and we believe that it could be beneficial to take some chips off the table redeploying them into areas that may not have performed as strongly.

  • 12/04/2013 How to Participate in Japan’s Economic Growth Plan

    Since prime minister Shinzo Abe’s election on December 16, 2012, investors have embraced the economic resurrection plan being referred to as “Abenomics,” sending Japanese stocks higher and the yen lower. A critical aspect of Abe’s plan is to extinguish the deflationary forces that have gripped Japan’s economy for the last 15 years. In light of the committed pursuit of Abenomics, we believe there are three important trends investors should be positioning for.

  • 11/19/2013 European Economy Begins Recovery: Three Possible Outtakes for Investors

    Europe’s economy experienced six straight quarters of negative economic growth—or contraction—before returning to a positive growth rate—or expansion—in the second quarter of 2013. The recovery in Europe has been supported by accommodative monetary policy, low inflation and a moderation in fiscal austerity. Consumer spending has improved, and manufacturing surveys are pointing toward expansion. This stabilization of the European economy is encouraging, and many have begun to look for investment opportunities arising from this nascent recovery.

  • 10/29/2013 Global Small Caps Leading the Way: Comparing Regional Opportunities

    In this market insight, we highlight the recent performance of the small-capitalization market around the globe and discuss important considerations for further allocations from today’s levels. Adding exposure to small caps can offer increased diversification and return potential, but there are critical differences in investment strategies.

  • 10/15/2013 Going Back to the Fundamentals: The 2013 India Rebalance

    Amid the noise of recent central bank activity, WisdomTree rebalanced its India Earnings Index on September 20—the same day the new governor of the Reserve Bank of India (RBI) held his first policy meeting and two days after the U.S. Federal Reserve (Fed) announced its monetary policy decision. The timing of this Index rebalance and the RBI meeting was a coincidence—the Index rebalance occurs the same time every September.

  • 09/24/2013 Introducing a New Index to Reflect the Rise of the Emerging Market Consumer

    One of the major themes that we believe will drive much of the global economy over the coming years is the rise in potential growth from emerging market (EM) consumers. In this Market Insight, we will discuss the key trends in the growth of the emerging market consumer and discuss the new Index we have created and how it is positioned in comparison to traditional emerging market equity indexes.

  • 09/09/2013 Rising Rates Causing Shift from Yield to Growth Focus

    Lately all eyes have been focused on the Federal Reserve (Fed) and its accommodative monetary policies. Since the 2008–09 global financial crisis, the Fed and central banks around the world have embraced policies to provide ample liquidity to the markets with the goal of keeping interest rates low and credit flowing. However, as the U.S. economy improves, one must consider the possibility of the Fed ending the extraordinary measures it has been taking. Starting in May this year, on just a hint of the Fed possibly dialing back its bond purchases, longer-term interest rates in the U.S. rose considerably.

  • 08/26/2013 Assessing the Valuations in Various Emerging Market Strategies

    When looking at some of the broad emerging market indexes or even indexes that focus on valuation criteria for the emerging markets, you’ll find them to be among the least expensive parts of the global equity markets today. But not all indexes, sectors or countries share those same low valuations, so we will explore the areas where the valuation opportunity may receive the highest emphasis.

  • 07/29/2013 The Search for High Quality and Dividend Growth in the Emerging Markets

    In this Market Insight, we discuss WisdomTree’s unique stock selection approach employed in the new WisdomTree Emerging Markets Dividend Growth Index, which are actually the same selection factors and weighting process as used for our U.S. and global ex-U.S. dividend growth Indexes. We’ll also have a general discussion on the recent environment for dividends and equity prices in the emerging markets to provide some present-day context on the investment opportunity set represented by this region and asset class.

  • 07/24/2013 Why Consider the WisdomTree United Kingdom Hedged Equity Index

    With the introduction of “Abenomics” to Japan—and its impact on yen weakness and equity market strength—the benefits to currency hedging were on prime display. A side effect of this Japan story has been greater interest in applying the same type of currency hedged strategy to Europe. However, we do not believe investor interest in currency hedging stops there.