WisdomTree celebrates ten years since launch of first US ETFs

Jul 1st, 2016 | By | Category: ETF and Index News

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Global exchange-traded fund provider WisdomTree is celebrating ten years since the launch of its first US-based ETFs.

WisdomTree celebrates ten years since launch of first US ETFs

Jonathan Steinberg, CEO and President of WisdomTree Investments.

The funds, launched on the NYSE, comprised a suite of 20 fundamentally-weighted smart beta equity ETFs tracking in-house indices which use a rules-based process to provide broad market representation and minimise turnover.

The ETFs were the first of their kind to weight fund constituents by the relative value of their dividend payments: the cash dividends each company pays as a percentage of the total amount of cash dividends paid by all the companies in that market. The underlying indices addressed the potential drawbacks of traditional market cap-weighted indices, which have been criticised as vulnerable to bubbles over full market cycles.

WisdomTree’s Chief Investment Strategist, Luciano Siracusano, argued that passive investing has undoubtedly served investors well over the past 30 years. “Numerous studies confirm that, over time, the vast majority of actively managed mutual funds have failed to outperform comparable cap-weighted indices, after accounting for fees, expenses and transaction costs. The real time track records of our indices in the market underscore that there is in fact room for improvement beyond traditional indexing to achieve better risk adjusted returns”.

WisdomTree CEO and President Jonathan Steinberg, added: “We introduced an important evolution in index construction through fundamental weighting and a novel business model of self-indexing…. Today, ETFs are in fact a global phenomenon poised to overtake traditional mutual fund assets over time, and alternative index weighting schemes under the Smart Beta moniker are becoming widely accepted by individual and institutional investors alike.

“The future for both traditional Beta and Smart Beta ETFs across asset classes remains bright as more individuals, financial advisors and institutions embrace a structure which promotes transparency, liquidity and a level playing field in financial markets.  Continued investment innovations like currency hedging and liquid alternatives, in addition to new regulations encouraging transparency of fees and advice, will further contribute to ETF industry growth in the US and in fast-growing ETF markets around the world.  As WisdomTree expands in new asset classes and geographic markets, we are still executing against our original business plan: to develop innovative, thoughtful, and differentiated ETFs which serve the needs of investors.”

WisdomTree has grown from its initial family of 20 products in 2006 to 99 funds listed in the US. The entire range covers domestic, international and global equities, fixed income, currencies, commodities and alternative strategies. WisdomTree listed its first ETFs in Europe in October 2014, and currently has a total of 26 UCITS ETFs across the London Stock Exchange, Borsa Italiana, Deutsche Börse Xetra, SIX Swiss Exchange and Irish Stock Exchange. The firm has also recently opened office in Japan and Canada.

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