WisdomTree

Defined return: targeting more predictable equity outcomes

Traditional equity investing can deliver attractive long-term returns, but the path to achieving them can be uncertain. Over shorter and medium-term horizons, investors can experience a wide spread of returns, significant drawdowns and prolonged periods of volatility. For investors seeking more resilient portfolio outcomes, this unpredictability can create challenges around capital preservation, planning and risk management.

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WisdomTree’s Defined Return Range is designed to reshape this experience. By using actively managed portfolios of autocallables linked to major equity indices, the strategies seek to deliver more predictable return outcomes and improved downside resilience over the medium to long term.

Rather than fully participating in the broad distribution of equity market returns, autocallable strategies aim to narrow the range of potential outcomes over the long term, whilst managing investor expectations over shorter time periods. The result is a more predictable investment journey, with a higher probability of achieving returns within a targeted range over the desired time period.

Why autocallables?

Autocallables are designed to provide more predictable investment outcomes than traditional equity investments by combining predefined return targets with conditional downside protection. Linked to major equity indices such as the EURO STOXX 50 and S&P 500, autocallables can deliver positive returns across a range of market environments, while also helping reduce sensitivity to moderate market declines.

Unlike traditional equity investing, where outcomes can vary widely, autocallables aim to narrow the distribution of returns. This can create a smoother and more consistent investment journey over the medium to long term.

The structure is supported by two long-term market return drivers:

Equity risk premium

Exposure to the long-term return potential of equities.

Volatility risk premium

An additional premium typically arising from the phenomenon that expected levels of volatility implied by the options market often overshoot reality.

By combining these return sources within a defined payoff structure, autocallables can support equity-like returns with improved downside resilience.

Adapt to changing market environments

Defined return or defined outcome investing is not static. The attractiveness of autocallable structures evolves continuously as market conditions, implied volatility, interest rates and equity pricing dynamics change. That is why WisdomTree uses an actively managed approach.

The strategies are implemented through diversified, laddered portfolios of autocallables across structures, maturities and counterparties. This approach helps reduce market timing risk and avoids reliance on the outcome of any single structured product. Active management also enables ongoing optimisation of:

Autocall barriers

Protection levels

Maturity profiles

Underlying equity exposures

Relative value opportunities across markets

Why WisdomTree for defined return?

  • Greater predictability

    We deliver defined return outcomes with a higher degree of certainty and improved downside resilience over the medium to long term.

  • Leverage equity and volatility risk premia

    The use of autocallables supports higher yields and a more consistent outcome profile by harvesting both equity and volatility risk premia.

  • Actively managed

    The strategy benefits from the active management of the derivatives portfolio.

  • Experienced team

    We have an experienced investment team with 13+ years’ experience running autocallable strategies.

Defined Return Strategies

The annualised net return target is not guaranteed and may not be achieved. Actual returns may be materially lower than the target and investors may lose some or all of their investment. Forecasts are not a reliable indicator of future performance.

Meet our investment team

Our investment team brings together decades of experience across derivatives, structured investments, portfolio management and risk management, combining deep technical expertise with a disciplined investment approach.

Investment Resources

ETF Investment Case

ETF Investment Case

The Case for Defined Return

The Case for Defined Return

Meet the Managers

Meet the Managers

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