We believed investors shouldn’t have to choose between cost efficiency and performance potential, so we developed the first family of ETFs designed to deliver both. Our strategies combine the promise of active management, such as the potential of outperformance against a benchmark, with the benefits of passive management to create ETFs built for performance. WisdomTree has launched many first-to-market ETFs and pioneered alternative weighting methods commonly referred to as “smart beta.” But our ETFs are not beta, smart or otherwise—they are an investment innovation we call "Modern Alpha®".
At WisdomTree, we believe investors shouldn’t have to choose between cost efficiency and performance potential. Modern Alpha® combines the outperformance potential of active management with the benefits of passive management—to offer investors cost-effective funds that are built for performance.
The traditional active management, or “legacy alpha” can often carry higher cost, less transparency in your portfolio and the risk of human judgment. But it can also mean an outperformance potential. The traditional passive investing, or “legacy beta” usually offers lower cost, and more transparency and objectivity. But it doesn’t give investors the opportunity to potentially outperform the market. Modern Alpha® combines the positives of each of the legacy investment approaches to enhance the investment experience.
*Ordinary brokerage commissions apply. Low cost represents lower expense ratio compared to higher priced investment options and ETFs.
In an environment where investors demand more value for their money, where regulations increasingly concern investors best interests, and where fee pressure is growing, ETFs offer a number of advantages including lower fees, zero investment minimums, greater transparency, and more. Of course, not all ETFs are created equal.
WisdomTree’s Modern Alpha® ETFs offer additional advantages, including the potential for:
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WisdomTree Senior Economist and Global Chief Investment OfficerWisdomTree Asset Management
Founder and Chief Executive OfficerWisdomTree Asset Management
Our Modern Alpha® family of ETFs provides the potential to outperform in many ways.
Dividend-weighted ETFs magnify the effects dividends have on performance, providing the potential for more income, for strength during down markets, for enhanced returns and reduced risk, and for improved overall portfolio returns.
Earnings-weighted ETFs provide the potential to benefit from only profitable companies (many ETFs invest in unprofitable companies) and to lower the P/E ratio of the given market, helping to manage valuation risk and magnify the effects that earnings have on risk and return characteristics.
Factor ETFs provide the potential to benefit from exposure to specific factors (risk premiums) that have been proven to drive returns.
Currency-hedged ETFs provide the potential to reduce portfolio volatility and risk by either hedging currency risk altogether or hedging it dynamically—to avoid it when it might hurt returns and to capitalize on it when it might help returns.
Ex-State-Owned Enterprise ETFs help avoid the state-owned companies in emerging markets that may not always have investor interests in mind, providing the potential to reduce risk and enhance returns.
Fixed income ETFs provide the potential to enhance yields, to reduce risk and to capitalize on local currency debt as well as the ability to manage risk, and more.
Alternative ETFs enable investors to access sophisticated institutional strategies in the ETF format, providing the potential for enhanced returns, reduced risk and increased diversification.
For some, investing is all about allocating to the lowest-cost beta exposure in the market. Not for WisdomTree. While our investing approach seeks to provide a low-cost building block for asset allocation, it also strives to meaningfully boost capital efficiency—giving investors the flexibility and capacity to add further portfolio diversifiers. How is this possible? Through an overlay of futures.
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