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 16, 2014
WisdomTree provides four simple ways to fight rising interest rates. Learn more in our latest podcast.
Luciano Siracusano, III
Executive Vice President–Head of Sales and Chief Investment Strategist
Fixed Income Strategist
You cannot invest directly in an index.
Tapering: A shift in monetary policy by which the Federal Reserve would begin decreasing the amount of bonds it purchases.
Credit risk: The risk that a borrower will not meet their contractual obligations in conjunction with an investment.
Investment Grade – A rating given to a municipal or corporate bond. It is a relatively favorable rating by either Moody’s or Standard & Poor’s indicating a higher chance an issuer performs interest and principal obligations as promised by the terms of the debt issuance.
Interest rate risk: The risk that an investment’s value will decline due to an increase in interest rates.
Futures: Reflects the expected future value of a commodity, currency or Treasury security.
Barclays U.S. Aggregate Index (“Barclays Agg,” “Agg”): Represents the investment-grade, U.S. dollar-denominated, fixed-rate taxable bond market, including Treasuries, government-related and corporate securities, as well as mortgage and asset backed securities.
Bank of America Merrill Lynch 0-5 Year U.S. High-Yield Constrained Index: Tracks the performance of short-term US dollar denominated below investment grade corporate debt publicly issued in the US domestic market.
Duration: A measure of a bond’s sensitivity to changes in interest rates. The weighted average accounts for the various durations of the bonds purchased as well as the proportion of the total government bond portfolio that they make up.
Net Asset Value (NAV): The calculated assets minus liabilities divided by shares outstanding. NAV is the straightforward account of the actual assets in the fund.
Credit spread: The portion of a bond’s yield that compensates investors for taking credit risk.
Hedge: Making an investment to reduce 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.
Volatility: A measure of the dispersion of actual returns around a particular average level.
Tightening: a decline in the amount of compensation bond holders require to lend to risky borrowers. When spreads tighten, the market is implying that borrowers pose less risk to lenders.
Short: The sale of a borrowed security, commodity or currency with the expectation that the asset will fall in value, the opposite of Long (or Long Position).
Long: The buying of a security such as a stock, commodity or currency, with the expectation that the asset will rise in value, the opposite of Short (or Short Position).
Slippage: The difference between the expected price of conducting a transaction compared to the actual execution price.
10-year interest rate was below 2.4% from August 22, 2014-August 29, 2014. Source: Bloomberg.
WisdomTree Barclays U.S. Aggregate Bond Zero Duration Fund (AGZD)
WisdomTree BofA Merrill Lynch High Yield Bond Zero Duration Fund (HYZD)
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 1-866-909-WISE (9473) or click here to view or download a prospectus online. Read the prospectus carefully before you invest. There are risks involved with investing including the possible loss of principal. Past performance does not guarantee future results.
RISKS: There are risks associated with investing, including possible loss of principal. High-yield or “junk” bonds have lower credit ratings and involve a greater risk to principal. Fixed income investments are subject to interest rate risk; their value will normally decline as interest rates rise. The Duration Funds seek to mitigate interest rate risk by taking short positions in U.S. Treasuries, but there is no guarantee this will be achieved. Derivative investments can be volatile and these investments may be less liquid than other securities, and more sensitive to the effects of varied economic conditions.
Fixed income investments are also subject to credit risk, the risk that the issuer of a bond will fail to pay interest and principal in a timely manner, or that negative perceptions of the issuer’s ability to make such payments will cause the price of that bond to decline. The Duration Funds may engage in “short sale” transactions of U.S. Treasuries where losses may be exaggerated, potentially losing more money than the actual cost of the investment and the third party to the short sale may fail to honor its contract terms, causing a loss to the Duration Funds. While the Duration Funds attempt to limit credit and counterparty exposure, the value of an investment in the Duration Funds may change quickly and without warning in response to issuer or counterparty defaults and changes in the credit ratings of each Fund’s portfolio investments. Investing in mortgage- and asset-backed securities involves interest rate, credit, valuation, extension and liquidity risks and the risk that payments on the underlying assets are delayed, prepaid, subordinated or defaulted on. Due to the investment strategy of certain Funds, they may make higher capital gain distributions than other ETFs.
Luciano Siracusano and Bradley Krom 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 opinion, interpretations or findings expressed herein do not necessarily represent the views of WisdomTree or any of its affiliates.