Asset Allocation ETF Launched

WisdomTree rolls out ‘balanced’ fund.
Reviewed by: Staff
Edited by: Staff

Today WisdomTree rolled out an actively managed asset allocation ETF that combines exposure to the performance of equities and U.S. Treasurys. The WisdomTree 90/60 U.S. Balanced Fund (NTSX) essentially invests 90% of its portfolio in large-cap U.S. equities and 10% in short-term fixed-income securities that are then used to collateralize a U.S. Treasury futures portfolio that equates to notional exposure of 60% of the portfolio, according to the prospectus.

The fund lists on the NYSE Arca exchange with an expense ratio of 0.20%.

With the stated goal of delivering total return, NTSX relies on models to achieve its goals. The fund’s Treasury futures contracts can have maturities ranging from two to 30 years, and are selected to target a duration of three to eight years, the document says.

“NTSX offers a new and disruptive approach to asset allocation, which has traditionally been through 60/40 equity/bond portfolios that tend to be highly correlated to the equity market,” said WisdomTree Director of Research Jeremy Schwartz. “In contrast to these more traditional portfolios, NTSX seeks to provide a more efficient way for investors to deploy their capital, resulting in the potential for enhanced total returns, reduced volatility and increased tax efficiency.”

A press release from the issuer notes that when the allocations deviate by 5% or more from that 90/60 equities and futures allocation, the portfolio will be rebalanced.

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