WisdomTree lists US multifactor and Japan small-cap ETFs on Borsa Italiana

Aug 7th, 2018 | By | Category: Equities

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WisdomTree has cross-listed two ETFs onto Borsa Italiana. The new additions provide smart beta exposure to US equities selected using a multifactor methodology and to dividend-paying small-cap stocks listed in Japan.

WisdomTree cross-lists US multifactor and Japan small cap ETFs on Borsa Italiana

WisdomTree has cross-listed its US multifactor and Japan small cap dividend ETF on Borsa Italiana.

The funds both debuted on the London Stock Exchange last month.

US Multifactor

The WisdomTree US Multifactor UCITS ETF tracks a proprietary, in-house index that provides exposure to both large and mid-caps stocks.

The underlying reference for the ETF is the WisdomTree US Multifactor Index which applies its methodology to a initial universe of the top 800 US-listed stocks by market capitalisation.

These stocks are then assigned scores for two fundamental factors (value and quality) and two technical factors (momentum and low correlation). Stocks are assigned a composite factor score based on these four factors.

The 200 companies with the highest composite factors scores are included in the index and weighted by a combination of their composite factor score and trailing 12-month volatility, rewarding less volatile stocks with a greater weight in the index. The index is rebalanced quarterly and the maximum weight for an individual security is capped at 4%.

The index prevents unwanted sector bets by enforcing sector neutrality versus the parent index.

The fund has been listed on Borsa Italiana with distributing (USMF IM) and accumulating (FCTR IM) share classes. Both trade in euros. Its total expense ratio (TER) is 0.30%.

Japan small cap dividends

The WisdomTree Japan SmallCap Dividend UCITS ETF tracks the WisdomTree Japan SmallCap Dividend Index.

The index is based on a universe of Tokyo Stock Exchange stocks that have paid out at least $5m in cash dividends in the prior year and have a market capitalization of at least $100m excluding the 300 largest companies.

Weighting is on the basis of cash dividends paid (dividend-per-share multiplied by number of shares outstanding), subject to a constituent cap of 2% and a sector cap of 25%.

The index has an authentic small-cap disposition with almost 70% of constituents smaller than $2bn in market cap and more than 80% of weighted-average revenues generated within Japan.

The index has a trailing dividend yield of 2.2% and is highly diversified with 881 constituents.

The investment case for Japanese small-cap companies lies in the fact that they are more domestically oriented and thus provide greater exposure to the local economy’s endogenously driven growth cycle, with strengthening domestic demand.

The fund trades in euros on Borsa Italiana and is available in an accumulating (DFJA IM) or distributing (DFJ IM) share classes. The fund has a TER of 0.48%.

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