Daily ETF Watch: New WisdomTree Bond Family

WisdomTree rolls out smart-beta fixed-income ETFs.

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Reviewed by: Heather Bell
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Edited by: Heather Bell

WisdomTree has rolled out four smart-beta bond ETFs. The funds, their tickers and expense ratios are as follows:

The ETFs follow the same core methodology, but applied to their respective targeted slices of the bond market. All of the funds target bonds from U.S.-domiciled issuers with at least one year to maturity, but the short-term funds put an upper limit on that of five years. And while WFHY requires its holdings to have a par amount of at least $500 million, the three other funds only require a par amount of $350 million.

Each ETF’s underlying index methodology evaluates bonds relative to their industry group peers. First, the methodology screens out companies to isolate those with favorable fundamental metrics. For the investment-grade funds, those metrics target cash flow, profitability and leverage, while the high-yield funds only look at cash flow. In the next step, each index overweights the remaining bonds that have strong income characteristics, the prospectuses said.

The funds listed on Bats, the Lenexa, Kansas-based exchange operator that owns ETF.com.

Contact Heather Bell at [email protected].

Heather Bell is a former managing editor of etf.com. She has also held editorial positions at Dow Jones Indexes and Lehman Brothers. Bell is a graduate of Dartmouth college and resides in the Denver area with her two dogs.