NEW YORK, Nov. 03, 2016 (GLOBE NEWSWIRE) — WisdomTree (NASDAQ:WETF), an exchange-traded product (“ETP”) sponsor and asset manager, today announced the launch of the WisdomTree Dynamic Currency Hedged International Quality Dividend Growth Fund (DHDG). DHDG seeks to provide exposure to developed international dividend-paying stocks with growth characteristics, while incorporating a dynamic element to mitigate currency exposure. DHDG has an expense ratio of 0.48%1.
Capturing International Quality Dividend Growth
Dividend-paying equities have increasingly become an attractive option for investors looking to generate income and pursue higher total return potential. Approximately 50% of the world’s investment opportunities are outside the U.S.2 – for investors seeking income, international investments in dividend-paying companies offer a new horizon.
WisdomTree’s approach to international quality dividend growth uses a forward-looking process designed to capitalize on dividend growth trends as they occur, in an attempt to raise the probability of generating exposure to future dividend growers. To identify these stocks, strict growth and quality selection factors are used: earnings growth expectations, high return on equity (ROE) and high return on assets (ROA) – the last two being measures associated with “quality.”
Compensated vs. Uncompensated Risk
Traditionally when investors allocate to foreign stocks, they take on local currency exposure as well. Developed world currencies can offer higher expected risk levels with no expected return enhancement. WisdomTree believes strategic hedging of currency exposure all the time is the most natural way to lower long-run volatility of international equity portfolios. However, a new way to hedge currency exposure looks to increase returns by adding hedges when they are expected to be more profitable.
WisdomTree, as the Index provider, has again collaborated with Record Currency Management to provide currency signals that hedge currency exposure dynamically, based on a three-factors: interest rate differentials, value and momentum.
“Investors often take on too much currency risk when they invest overseas. For those who do not want to make the timing decision themselves, DHDG will help dynamically adjust currency-hedge ratios based on a data-driven, transparent process. Adopting a dynamic approach with WisdomTree moves investors away from subjective calls and into a disciplined, factor-based approach to currency hedging. We believe our factors – carry, value and momentum – have potential to outperform both hedged and unhedged strategies over time by rotating currency hedges with their cycles,” said Jeremy Schwartz, WisdomTree Director of Research.
A Focus on Quality Dividend Growth: DHDG, IHDG, IQDG
WisdomTree now offers three different ways to be exposed to international equity ETFs focused on quality dividend growth: dynamically currency hedged using DHDG, fully currency hedged using the WisdomTree International Hedged Quality Dividend Growth Fund (IHDG), and currency unhedged with the WisdomTree International Quality Dividend Growth Fund (IQDG).
DHDG is new and has a limited operating history.
Investors should carefully consider the investment objectives, risks, charges and expenses of the Fund before investing. To obtain a prospectus containing this and other important information, please call 866.909.WISE (9473), or visit wisdomtree.com to view or download a prospectus. Read the prospectus carefully before you invest.
There are risks associated with investing, including possible loss of principal. Foreign investing involves special risks, such as risk of loss from currency fluctuation or political or economic uncertainty. The Fund invests in derivatives in seeking to obtain a dynamic currency hedge exposure. Derivative investments can be volatile, and these investments may be less liquid than other securities, and more sensitive to the effects of varied economic conditions. Derivatives used by the Fund may not perform as intended. A Fund that has exposure to one or more sectors may be more vulnerable to any single economic or regulatory development. This may result in greater share price volatility. Dividends are not guaranteed and a company currently paying dividends may cease paying dividends at any time. The composition of the Index underlying the Fund is heavily dependent on quantitative models and data from one or more third parties, and the Index may not perform as intended. The Fund invests in the securities included in, or representative of, its Index regardless of their investment merit, and the Fund does not attempt to outperform its Index or take defensive positions in declining markets. Please read the Fund’s prospectus for specific details regarding the Fund’s risk profile.
Jeremy Schwartz is a registered representative of Foreside Fund Services, LLC.
WisdomTree Funds are distributed by Foreside Fund Services, LLC in the U.S. only.
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About WisdomTree
WisdomTree Investments, Inc., through its subsidiaries in the U.S., Europe, Japan and Canada (collectively, “WisdomTree”), is an exchange-traded fund (“ETF”) and exchange-traded product (“ETP”) sponsor and asset manager headquartered in New York. WisdomTree offers products covering equities, fixed income, currencies, commodities and alternative strategies. WisdomTree currently has approximately $38.6 billion in assets under management globally.
WisdomTree® is the marketing name for WisdomTree Investments, Inc. and its subsidiaries worldwide.
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1The Fund’s gross expense ratio of 0.96% and the net expense ratio of 0.48% reflect contractual waivers of 0.48% through 10/31/17.
2Source: Bloomberg. Based on the MSCI ACWI Index universe, a broadly recognized global benchmark, as of 9/30/16.
CONTACT: Contact Information: WisdomTree Investments, Inc. Melissa Chiles / Jessica Zaloom +1.917.267.3797 / +1.917.267.3735 [email protected] / [email protected]