WisdomTree Europe Hedged SmallCap Equity Fund (EUSC US) – Portfolio Construction Methodology

The underlying WisdomTree Europe Hedged SmallCap Equity Index delivers euro-traded, dividend-paying European small caps while neutralizing EUR/USD currency. Starting from the WisdomTree International Equity universe, eligible companies conduct primary business activities in Europe and trade in EUR; additions rank in the bottom 10% of the segment’s aggregate market cap, with a 13% deletion buffer to reduce turnover. Investability screens require at least USD 100 million market cap and ≥ USD 100,000 median 3-month DTV; ADRs/GDRs, preferreds and investment companies are excluded. Constituents are dividend-weighted using indicated cash dividends over the coming year; weights are normalized at the annual reconstitution, with ongoing float adjustments. The index implements a systematic 100% EUR/USD hedge via rolling one-month forward contracts, reset on a regular monthly schedule, so equity selection remains small-cap, dividend-tilted while currency exposure is minimized.

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