The WisdomTree Blog
While near-term allocators to emerging markets may not be easy to find, the economic difficulties in emerging markets can function as a catalyst for rethinking how these markets can be accessed. We’re finding that investors may not want to take all of the risk factors inherent to an MSCI Emerging Markets Index, traditionally the “beta benchmark” for emerging market equity investments.
With equity markets up more than 250% since the 2009 lows and slightly off all-time highs, we think it is especially important to ask whether the underlying fundamentals justify these moves. We also think it is important to be mindful of how an annual rebalance, steering a portfolio back to an underlying fundamental such as dividends, can help manage valuation risks.
WisdomTree conducts the annual rebalance of its U.S. dividend Index family in December of each year, with the annual screening date occurring on the last trading day of November. The annual screening process provides a plethora of data about how dividends for the U.S. equity markets have changed over time, and gives important information about the underlying market fundamentals.
Looking ahead, investors should be asking what the primary driver of returns in fixed income will be in 2013. In emerging markets, we believe a majority of central banks have completed their cycle of interest rate cuts. This year, we believe that returns from EM local debt will largely be comprised of interest income and returns from currency appreciation against the U.S. dollar.
Jeremy J Siegel
Senior Investment Strategy Advisor
CEO of WisdomTree
Jeremy Schwartz, CFA
Executive Vice President, Global Head of Research
Christopher Gannatti, CFA
Head of Research, Europe
Christopher Gannatti began at WisdomTree as a Research Analyst in December 2010, working directly with Jeremy Schwartz, CFA®, Director of Research. In January of 2014, he was promoted to Associate Director of Research where he was responsible to lead different groups of analysts and strategists within the broader Research team at WisdomTree. In February of 2018, Christopher was promoted to Head of Research, Europe, where he will be based out of WisdomTree’s London office and will be responsible for the full WisdomTree research effort within the European market, as well as supporting the UCITs platform globally. Christopher came to WisdomTree from Lord Abbett, where he worked for four and a half years as a Regional Consultant. He received his MBA in Quantitative Finance, Accounting, and Economics from NYU’s Stern School of Business in 2010, and he received his bachelor’s degree from Colgate University in Economics in 2006. Christopher is a holder of the Chartered Financial Analyst designation.
Head of Fixed Income Strategy
Tripp Zimmerman, CFA
Head of Fixed Income & Currency
Associate Director, Asset Allocation and Modern Alpha
Head of Capital Markets
Associate Director of Capital Markets
Head of Europe
Joseph Tenaglia, CFA
Associate Director, Asset Allocation
Kara Marciscano, CFA
Jianing Wu joined WisdomTree as a Research Analyst in October 2018. She is responsible for analyzing market trends and helping support WisdomTree’s research efforts. Previously, Jianing completed internships and projects at Geode Capital, Starwint Capital, and Invesco Great Wall Fund Management with a focus in quantitative research. Jianing received her M.S in Finance from the Massachusetts Institute of Technology. She graduated with honors from Boston College with degrees in Mathematics and Philosophy.
Jeff Weniger, CFA
Director, Asset Allocation
Alejandro Saltiel, CFA
Associate Director of Modern Alpha
Alejandro Saltiel joined WisdomTree as a Quantitative Research Analyst in May 2017. He is responsible for quantitative research on WisdomTree’s products and global equity markets. Prior to joining WisdomTree, Alejandro worked at HSBC Asset Management’s Mexico City office as Portfolio Manager for multi-asset mutual funds. He started his career working at a boutique hedge fund that specialized on trading options on sector-levered ETFs. Alejandro received his Master’s in Financial Engineering degree from Columbia University in 2017 and a Bachelor’s in Engineering degree from the Instituto Tecnológico Autónomo de México (ITAM) in 2010. He is a holder of the Chartered Financial Analyst designation.
Matt Wagner, CFA
Modern Alpha Analyst
Matt Wagner joined WisdomTree in May 2017 as a member of the Research team. He is responsible for research on WisdomTree’s products and communicating the firm’s views on the markets. Matt started his career at Morgan Stanley, working as an analyst in Treasury Capital Markets from 2015 to 2017 where he focused on unsecured funding planning, execution and risk management. Matt graduated from Boston College in 2015 with a B.A. in International Studies with a concentration in Economics. Matt is a holder of the Chartered Financial Analyst designation.
Jeremy Schwartz recently spoke with Jawad Mian, editor of “ Stray Reflections,” and Richard Clarida, global strategic advisor to PIMCO and economics professor at Columbia, regarding their thoughts on policy action by the Federal Reserve (Fed), the Bank of Japan (BOJ) and the European Central Bank (ECB), as well as global implications for investing. Below I outline the key takeaways.
India’s parliament is currently about to close its winter session. Agenda items for the session included key bills such as the Goods and Services Tax (GST) Bill, which could simplify taxes and increase mobility of goods and services across the country; the introduction of a bankruptcy code to strengthen the banking system; and a few other key legislative items.
Many investors allocate their portfolios to traditional asset classes only—namely equity and fixed income, investing on a long-only basis. A dynamic bearish strategy is designed to be net short or market neutral (equal long and short positions) when the market environment is judged to be poor or mixed, and net long when the environment is deemed more attractive. We believe this may be a better long-run strategy than being 100% net short over the long term.