NYSE The Exchange: WisdomTree AI Enhanced Value Funds

Douglas Yones:

Hello, and welcome to The Exchange, brought to you by the New York Stock Exchange. I'm Douglas Yones, your host. As a reminder, today's interview is for informational purposes only. The NYSE does not recommend investments or investment strategies. Now today, I am joined by two very special guests. I have Jeremy Schwartz. He is the Global Chief Investment Officer for WisdomTree Asset Management, and Gareth Shepherd. Gareth is the Co-Head of Equity Machine Intelligence for Voya Investment Management. Gentlemen, thank you both for being here today.

Jeremy Schwartz:

Thanks for having us Douglas.

Gareth Shepherd:

Thank you Douglas.

Douglas Yones:

Jeremy, let's stay with you if we could. You just recently collaborated with Voya. You have restructured two of your ETFs, two WisdomTree ETFs. The new symbols we have are AIVL and AIVI. Can you tell us about these fund strategies?

Jeremy Schwartz:

AIVL and AIVI have a history as being value investing mandates. They were launched a while ago, and some of their predecessor strategies, they had roots back to the last financial crisis, and there was a lot of value funds that had very heavy exposure to financials, and at the time it was... People were looking for ways to get value exposure without financials, but today the macro economy is very different. The markets are very different. Technologies have evolved, and there's new ways of accessing value strategies with a more sophisticated approach. WisdomTree's been very excited to collaborate with Voya on fixed income. These two funds, AIVL and AIVI are our first collaboration on equities, and it's taking a step forward for value investing mandates. We're very excited to be partnering with Voya on these strategies.

Douglas Yones:

Let's talk about that. So we've got the Voya Equity Machine Intelligence team. So if that didn't make sense to you, of course, we're talking about AI. Gareth, can you tell us about how this AI process works? How are you and your team applying AI, and how does it impact the overall value investing strategy?

Gareth Shepherd:

We can all see around us the world is changing, and so is investing, and so is value investing. So what was value investing in the past is no longer likely to be successful. So AI brings a new way to look at value investing, and specifically machine intelligence, which is one of the subsets of AI helps to look at value in, let's say a more nuanced way, because value will depend on the sector. It'll depend on the industry group. It'll depend on the market regime that's currently facing us, and all of these contingencies and conditionality's are really important. A machine-learning approach is able to really look for these granular patterns and really take value in investing into the next period.

Douglas Yones:

Jeremy of course, no shortage of market-moving headlines these days. How do we think about these two ETFs, AIVI, AIVL? How are these funds positioned in today's environment in today's marketplace?

Jeremy Schwartz:

You really had a 10 to 15 year stretch that was dominated by mega-cap growth, and so you haven't really had value investing work going back from 2000 to 2007, because the last time you had a real big value cycle. The macro today as we see it is shaping up very much in values favor to start 2022, even just the first few weeks, it's been very much a value mandate. Higher inflation is one of our top themes of this year. Higher inflation means higher interest rates. Higher interest rates tends to be very beneficial for value over growth. Now you have an AI technology on top of that can help you get a more sophisticated look under the hood of those value mandates. So we're very excited about the macro environment for these funds, and having a brand new technology and a great partner with Gareth at Voya to help power these AI-driven value funds.

Douglas Yones:

Gareth, for somebody who's watching, wants to learn more about this process, more about these ETFs, where do they go?

Gareth Shepherd:

They should go to WisdomTree.com.

Douglas Yones:

Easy enough. WisdomTree.com. As a reminder, if you caught this episode live and you're looking for more ETF thought leadership, you can find all of that on our website, HomeofETFs.com. That's HomeofETFs.com. All brought to you by the New York Stock Exchange, the home of ETFs.

Host:

Before investing, carefully consider a fund's investment objectives, risks, charges, and expenses contained in the prospectus available at WisdomTree.com. Read it carefully.