While it’s not at all uncommon for ETFs to change indexes, it’s far less common for them to completely abandon the concept of an index in favor of active management. Yet that’s what will happen with two WisdomTree ETFs as of Oct. 19.
While far from blockbuster funds, the $42 million WisdomTree Emerging Markets Consumer Growth Fund (EMCG) and the $79.2 million WisdomTree Emerging Markets Quality Dividend Growth Fund (DGRE) aren’t exactly small potatoes when it comes to assets under management, which is usually the driving force for major strategy changes.
However, emerging markets have been lagging global equity markets in recent months, and both funds have underperformed the iShares MSCI Emerging Markets ETF (EEM). It’s commonly said that active management shines when equity markets aren’t doing well, so WisdomTree may believe its fund managers can seize on the perceived opportunity.
Both ETFs will retain their expense ratios of 0.32% through the transition to active.
Contact Heather Bell at [email protected]