A Decade Of Out-Performance: Inside WisdomTree's Dividend-Weighted Strategies
A decade ago, WisdomTree changed passive investing with the introduction of a sweeping series of dividend-weighted indexes.
WisdomTree Chief Investment Strategist Luciano Siracusano discusses our approach to dividends and how several WisdomTree
strategies outperformed traditional beta benchmarks over the past 10 years.
Below you will find links to our latest whitepapers, investment cases and current research.
You can also read economic and market commentary from our thought leaders and connect with us on social media.
October 6, 2015
There’s nothing small about the potential of small caps.
But how can you find the best opportunities and how can
you mitigate the risks involved? Find out in our podcast.
Director of Research
Associate Director of Research
You cannot invest directly in an index.
Diversification does not eliminate the risk of experiencing investment losses.
Hedging can help returns when a foreign currency depreciates against the U.S.
dollar, but can hurt when the foreign currency appreciates against the U.S. dollar.
Investments in currency involve additional special risks, such as credit risk and interest rate fluctuations.
Beta: Measure of the volatility of an index or investment relative to a benchmark.
A reading of 1.00 indicates that the investment has moved in lockstep with the benchmark;
a reading of -1.00 indicates that the investment has moved in the exact opposite direction of the benchmark.
ECB: European Central Bank
Quantitative Easing (QE): A government monetary policy occasionally used to increase the money supply by buying government securities or
other securities from the market. Quantitative easing increases the money supply by flooding financial institutions with capital, in an effort
to promote increased lending and liquidity.
ETF: Exchange-traded fund.
Hedge: Making an investment to mitigate the risk of adverse price movements in an asset.
Normally, a hedge consists of taking an offsetting position in a related security, such as a futures contract.
Active manager: Portfolio managers who run funds that attempt to outperform the market by selecting those securities they believe to be the best.
Russell 2000 Index: Measures the performance of the small-cap segment of the U.S. equity universe.
The Russell 2000 is a subset of the Russell 3000 Index, representing approximately 10% of the total market capitalization of that index.
It includes approximately 2,000 of the smallest securities based on a combination of their market cap and current index membership.
S&P 600 Index: Measures the small-cap segment of the U.S. equity market.
Volatility: A measure of the dispersion of actual returns around a particular average level.
Price-to-earnings (P/E) ratio: Share price divided by earnings per share.
Lower numbers indicate an ability to access greater amounts of earnings per dollar invested.
Price-to-dividend (P/D) ratio: Refers to the index price divided by the trailing 12-month dividends.
Rebalance: An index is created by applying a certain set of selection and weighting rules at a certain frequency.
WisdomTree rebalances, or reapplies its rules-based selection and weighting process, on an annual basis.
Market capitalization: Share price x number of shares outstanding.
Firms with the highest values receive the highest weights in approaches designed to weight firms by market cap.
ECB: European Central Bank.
Quantitative easing (QE): A central bank monetary policy occasionally used to increase the money supply by buying government
securities or other securities from the market. Quantitative easing increases the money supply by flooding financial institutions
with capital in an effort to promote increased lending and liquidity.
Dividend yields: Refers to the trailing 12-month dividend yield.
Dividends over the prior 12 months are added together and divided by the current share price.
Higher values indicate more dividends are being generated per unit of share price.
Currency risk: A form of risk that arises from the change in price of one currency against another.
Whenever investors or companies have assets or business operations across national borders, they face currency risk if their positions are not hedged.
Investors should carefully consider the investment objectives, risks,
charges and expenses of the Funds before investing. U.S. investors only: to obtain a prospectus
containing this and other important information, please call 866.909.WISE (9473)
or visit wisdomtree.com. Investors should the prospectus carefully before investing.
Past performance is not indicative of future results.
There are risks associated with investing, including possible loss of principal.
Foreign investing involves special risks, such as risk of loss from currency
fluctuation or political or economic uncertainty. Funds focusing on a single
sector generally experience greater price volatility. Investments in emerging,
offshore or frontier markets are generally less liquid and less efficient than
investments in developed markets and are subject to additional risks, such as risks
of adverse governmental regulation and intervention or political developments.
Please read the Fund’s prospectus for specific details regarding the Fund’s risk profile.
Jeremy Schwartz and Tripp Zimmerman are registered representatives of Foreside Fund Services, LLC.
WisdomTree Funds are distributed by Foreside Fund Services, LLC in the U.S. only.
The sources, opinions and forecasts expressed by the investment
strategists are subject to change and should not be considered
or interpreted as a recommendation to participate in any particular
trading strategy, or deemed to be an offer or sale of any investment product,
and they should not be relied on as such. The user of this information assumes
the entire risk of any use made of the information provided herein.
Unless expressly stated otherwise, the opinions, interpretations or
findings expressed herein do not necessarily represent the views of
WisdomTree or any of its affiliates.