A Decade Of Out-Performance: Inside WisdomTree's Dividend-Weighted Strategies
A decade ago, WisdomTree changed passive investing with the introduction of a sweeping series of dividend-weighted indexes.
WisdomTree Chief Investment Strategist Luciano Siracusano discusses our approach to dividends and how several WisdomTree
strategies outperformed traditional beta benchmarks over the past 10 years.
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ETFs offer a number of benefits that can make them effective for 401(k) investors. They provide diversification, low fees, intraday liquidity, transparency, and much more.* And, as WisdomTree ETFs are built differently, they also offer investors thoughtful innovation, smart engineering and redefined investments.
In fact, our family of 93 ETFs covers everything from equities to fixed income, alternatives and currencies around the world.
Our experienced 401(k) team can help you find a wise way to make ETFs part of your 401(k) business.
For more information, please call
*Ordinary brokerage commissions apply. Holdings are displayed daily on the website. Investors can buy - or sell
- shares at any time throughout the day. Diversification does not eliminate the risk of experiencing investment losses.
As the 401(k) industry shifts its focus to cost and transparency, ETFs offer a number of benefits that can help address these needs.
1 12b-1 fee: An annual marketing or distribution fee on a mutual fund; this fee is considered an operational expense and is included in a fund’s expense ratio.
2 Omnibus basis: When transactions of two or more account holders are combined under one merchant account; the individual account holders' identities remain undisclosed.
High fees may erode 401(k) plan performance. In fact, even a 1% difference in total fees can have a significant impact on participant savings—an effect that increases over time.
In the hypothetical illustration below, we show a higher fee versus a lower fee scenario, with average annual returns (avg. ann. returns) of 6.50% and 7.50% respectively on an initial investment of $25,000.
When you consider that retirement accounts can have a life of 30+ years, the impact of a seemingly small 1 percentage point difference in fees can truly be appreciated.
ETFs when used within 401(k) portfolios offer several strengths that make them an effective long-term investment strategy. But not all ETFs are created equal. WisdomTree ETFs are built differently and offer benefits that may be attractive to retirement investors.
A Fundamental Difference
The vast majority of ETFs are market cap weighted1. So by design, they tend to hold more of a stock as its price is going up and less as it’s going down. We believe this has the potential to overweight overvalued stocks and underweight undervalued stocks, potentially exposing investors to higher risks and lower returns. WisdomTree weights securities in our equity Indexes by metrics of fundamental value like dividends or earnings, because we believe these are better indicators of a stock’s fiscal health than its price alone.
A Long-term Strategy
In addition, our dividend-based Funds offer the potential of lower volatility and income-generating yields. We believe our goal of capital preservation and reduced volatility makes WisdomTree ETFs a natural fit for most retirement investors.
1 Market cap-weighted: Market cap = share prices x number of shares outstanding. Firms with the highest values receive the highest weights.
THE WISDOMTREE APPROACH
Investors should carefully consider the investment objectives, risks, charges and
expenses of the Funds before investing. U.S. investors only: to obtain a prospectus
containing this and other important information, please call 1-866-909-WISE (9473)
or click here
to view or download a prospectus online. Read the prospectus carefully before you
invest. There are risks involved with investing including the possible loss of principal.
Past performance does not guarantee future results.
There are risks associated with investing including possible loss of principal. Foreign investing involves special risks, such as risk of loss from currency fluctuation or political or economic uncertainty. Investments in real estate involve additional special risks, such as credit risk, interest rate fluctuations and the effect of varied economic conditions. Funds that focus its investments in one country increase the impact of events and developments associated with the region which can adversely affect performance. Funds focusing on a single sector and/or smaller companies generally experience greater price volatility. Investments in emerging, offshore or frontier markets are generally less liquid and less efficient than investments in developed markets and are subject to additional risks, such as risks of adverse governmental regulation, intervention and political developments. Due to the investment strategy of certain Fund’s they may make higher capital gain distributions than other ETFs. Please read the Fund’s prospectus for specific details regarding the Fund's risk profile.
WisdomTree Funds are distributed by Foreside Fund Services, LLC in the U.S. only.