Multifactor

At WisdomTree, our Modern Alpha™ strategies are designed to combine the outperformance potential of active with the benefits of a rules-based approach. And today, no discussion of outperformance can be complete without factors (certain equity attributes that may be associated with higher returns). While there are many ways to gain individual exposure to value, size, quality, momentum and low volatility, we believe multifactor strategies can be powerful tools that provide numerous advantages to all investors.

A New Breed of Active

In the search for alpha, the closer to “beta” a strategy is, the less outperformance potential it can provide. And alternatively, the more “active” a strategy is, the greater the risks an investor accepts. But we believe there is something that can combine the benefits of both.


 Our Modern Alpha™ multifactor strategies were designed to provide:

 
  • Potentially lower risks and volatility than traditional active managers
  • Alpha potential across different market environments and different regions through diversified factors
  • The potential for enhanced risk-adjusted returns through a rules-based process
  • All the advantages of the ETF structure

Our Multifactor Approach


Our innovative multifactor approach:


  • Uses a bottom-up method for combining factors that helps maximize the potential for higher absolute and risk-adjusted returns
  • Blends fundamental factors such as value and quality with technical indicators such as momentum and low correlation to create a systematic, proprietary stock selection and weighting model
  • Leverages a currency management overlay can help enhance return potential and lower volatility in international markets
  • Seek to balance the risks of factor imbalance, sector and country bets and stock selection inherent in active mandates


Here is a summary of our initial stock screening process:

Our Multifactor Family

WisdomTree’s Multifactor Funds are designed to combine the higher outperformance potential of more active approaches with all the advantages of ETFs.
USMF
WisdomTree U.S. Multifactor Fund
The WisdomTree U.S. Multifactor Fund can help investors generate alpha while reducing the risks and costs of active managers through systematic multifactor exposure to U.S. stocks.
Learn More about USMF
DWMF
WisdomTree International Multifactor Fund

The WisdomTree International Multifactor Fund can help investors to alpha while reducing the risks and costs of active managers through systematic multifactor exposure with a dynamic currency hedge overlay to international stocks outside the United States and Canada.

Learn More about DWMF
EMMF
WisdomTree Emerging Market Multifactor Fund
The WisdomTree Emerging Markets Multifactor Fund can help investors generate alpha while reducing the risks and costs of active managers through systematic multifactor exposure with a dynamic currency hedge overlay to emerging market stocks.
Learn More about EMMF
EUMF
WisdomTree Europe Multifactor Fund
The WisdomTree Europe Multifactor Fund can help investors generate alpha while reducing the risks and costs of active managers through systematic multifactor exposure with a dynamic currency hedge overlay to European stocks.
Learn More about EUMF
JAMF
WisdomTree Japan Multifactor Fund
The WisdomTree Japan Multifactor Fund can help investors generate alpha while reducing the risks and costs of active managers through systematic multifactor exposure with a dynamic currency hedge overlay to Japanese stocks.
Learn More about JAMF