Videos & Podcasts
How to Manage State Ownership Risk in Emerging Markets
WisdomTree designed strategies that don’t simply own the market. We’re really looking to identify fundamentals as a way to help manage risk and also potentially boost returns. One risk that we think is underappreciated in emerging market investing is the role that state-owned enterprises can have on portfolio returns. So, in our research, we’ve actually found that state owned enterprises may not necessarily always run businesses as efficiently as privately-held companies would. So, the WisdomTree Emerging Markets ex-State-Owned Enterprises Fund, ticker XSOE, seeks to reduce exposure to companies with at least 20% ownership stakes by government in order to bias a portfolio to more cyclical sectors that we believe can really tap into the higher growth rates of emerging markets.