WisdomTree Launches its First 20 ETFs

June 14, 2006

WisdomTree launched twenty dividend-weighted ETFs on Friday, June 17; the company promises to “change the way investors think about indexing.”

WisdomTree Investments will launch twenty new dividend-weighted exchange-traded funds (ETFs) on the New York Stock Exchange (NYSE) on Friday, June 17, in a move that WisdomTree CEO Jonathan Steinberg says has the "potential to change the way investors think about indexing and investing."

In a conference call announcing the deal, WisdomTree said that traditional market-cap weighted indexes were "flawed," and called WisdomTree's dividend-weighted approach "a better way to index."  WisdomTree's indexes (and the ETFs that track them) weight companies based on the size of their cash dividend stream, rather than their market capitalization. 

The company said that indexes weighted by market capitalization, by definition, invest too much money in over-valued stocks and not enough money in under-valued stocks, leading to poor performance. By focusing on fundamental factors and targeting the dividend stream, WisdomTree believes it can deliver between 100 and 500 basis points of additional annual returns to investors - a result based on backtested, historical data. 

The Funds

WisdomTree is not the first company to launch a dividend-weighted ETF - Barclays Global Investors (BGI) has that honor, thanks to its $6 billion iShares Dow Jones Select Dividend Fund (DVY), which launched in 2003.

The WisdomTree filings differ from DVY in many ways, however, and one of the biggest differences is that the WisdomTree filings cover everything. They are a full suite of indexes, and are designed to "enhance or replace" traditional cap-weighted funds in an investor's portfolio, according to the company.

The WisdomTree funds include six domestic funds and fourteen international funds.

Domestic Funds

 

WisdomTree Total Dividend Fund (ER: 0.28%; Yield: 3.22%)

WisdomTree High-Yielding Equity Fund (ER: 0.38%; Yield: 4.29%

WisdomTree LargeCap Dividend Fund (ER: 0.28%; Yield: 3.01%)

WisdomTree MidCap Dividend Fund (ER: 0.38%; Yield: 3.73%)

WisdomTree SmallCap Dividend Fund (ER: 0.38%; Yield: 5.44%)

WisdomTree Dividend Top 100 Fund (ER: 0.38%; Yield: 3.86%)

 

International Funds

 

WisdomTree DIEFA (Developed Markets) Fund (ER: 0.48%; Yield: 3.67%)

WisdomTree DIEFA High-Yielding Equity Fund  (ER: 0.58%; Yield: 4.68%)

WisdomTree International LargeCap Dividend Fund (ER: 0.48%; Yield: 3.59%)

WisdomTree International MidCap Dividend Fund (ER: 0.58%; Yield: 3.88%)

WisdomTree International SmallCap Dividend Fund (ER: 0.58%; Yield: 4.01%)

WisdomTree International Dividend Top 100 Fund (ER: 0.58%; Yield: 4.41%)

WisdomTree Europe Total Dividend Fund (ER: 0.48%; Yield: 3.94%)

WisdomTree Europe High-Yielding Equity Fund (ER: 0.58%; Yield: 4.99%)

WisdomTree Europe SmallCap Dividend Fund (ER: 0.58%; Yield: 4.37%)

WisdomTree Japan Total Dividend Fund (ER: 0.48%; Yield: 1.40%)

WisdomTree Japan High-Yielding Equity Fund (ER: 0.58%; Yield: 1.88%)

WisdomTree Japan SmallCap Dividend Fund (ER: 0.58%; Yield: 1.40%)

WisdomTree Pacific ex-Japan Total Dividend Fund (ER: 0.48%; Yield: 4.32%)

WisdomTree Pacific ex-Japan High-Yielding Equity Fund (ER: 0.58%; Yield: 6.29%)

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