WisdomTree Plans Active Brazil Bond ETF

October 11, 2010

Building on the success of its local currency emerging debt fund ELD, WisdomTree plans Brazil Bond Fund.

WisdomTree, looking to replicate the success of the local-currency emerging market bond ETF it rolled out in August, filed with the Securities and Exchange Commission to offer an actively managed Brazilian bond exchange-traded fund that will own both government and corporate debt denominated in either dollars or reais.

The Brazil Bond Fund fund will also be able to own real-denominated debt issued  by supranational organizations such as the European Investment Bank, International Bank for Reconstruction and Development and the International Finance Corporation, as well as development agencies supported by other national governments.

Emerging markets debt has grown in popularity in recent months as investors look to diversify their bond holdings at a time when yields on developed-world bonds are low. New York-based WisdomTree’s own Emerging Market Local Debt ETF (NYSEArca: ELD) gathered $66.8 million last month, raising its assets to $271.9 million since launching on Aug. 9, according to data compiled by IndexUniverse.com.

The Brazil Bond Fund will be able to invest in debt instruments with various maturities and credit risks, from investment grade to high-yield, the filing said.

It will be able to achieve its exposure through derivatives, noting in the filing that any investment in such vehicles will be a function of, “among other things, market accessibility, credit exposure, tax ramifications and regulatory requirements applicable to U.S. investment companies.”


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