Today WisdomTree rolled out two actively managed ETFs that incorporate a variety of factors and that target non-U.S. markets. The WisdomTree Emerging Markets Multifactor Fund (EMMF) and the WisdomTree International Multifactor Fund (DWMF) are managed based on a quantitative model.
The funds come with expense ratios of 0.48% and 0.38%, respectively, and list on the NYSE Arca exchange.
“There are many higher-cost actively managed funds that tend to hug the benchmark with modest tilts toward active picks,” said WisdomTree Director of Research Jeremy Schwartz. “In contrast, EMMF and DWMF are expected to have an active share greater than 80%, and we believe these differentials, combined with our multifactor model, create an opportunity to add value over time.”
EMMF focuses on emerging markets, with significant weightings to China and Taiwan, while DMMF covers developed markets except for the U.S. and Canada.
Essentially the funds’ underlying model seeks to identify companies that seem likely to have positive returns due to their exposure to factors such as value, quality, momentum and correlation. It also looks to identify the optimal timing for the trading of securities entering and exiting the portfolio. Rebalancing will occur at least on a quarterly basis, the prospectuses say.
The documents indicate the funds will implement currency hedging strategies to protect against currency fluctuations and that they will primarily invest in large- and midcap companies, though small-cap companies can also be included in the portfolios.
Contact Heather Bell at [email protected]