WisdomTree today announced the listing of a GBP hedged accumulating share class for the WisdomTree US Equity Income UCITS ETF on the London Stock Exchange…..
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Nizam Hamid, ETF Strategist
This new share class combines the benefits of WisdomTree’s unique dividend weighting methodology applied to high yielding US equities and the management of currency risk through a monthly currency hedge.
Because the US makes up a large allocation of global benchmarks, European investors end up with a large exposure to US equities. Whilst plain beta exposures have been popular, there has been an increasing trend to focus on more sophisticated fundamentally weighted investment strategies. WisdomTree’s US Equity Income UCITS ETF has delivered higher risk adjusted returns relative to the S&P 500 over the past year. The index, which is uniquely positioned for an alternatively dividend weighted strategy, has a live track record of over 10 years and has delivered above average returns and lower risk compared to the S&P 500.
Recent macro events, ranging from Brexit, Quantitative Easing and the expected tightening of interest rates in the US, have reminded investors of the need to be able to efficiently hedge out currency risk. This share class provides investors with an effective solution and adds to the broad range of currency hedged share classes that WisdomTree provides investors in Europe.
“WisdomTree is well known for providing differentiated strategies and currency hedging and this new share class is a perfect example of WisdomTree’s ability to deliver client focused solutions,” said Nizam Hamid, ETF Strategist. “In addition to providing a hedge against currency risk, this accumulating share class allows investors to benefit from the compounded returns in dividend-based strategies.”
“Managing currency risk – as witnessed through recent moves in Sterling as well as delivering operational benefits means that this is an effective solution for the investment and macro challenges faced by our clients,” said Morgan Lee, Head of European Distribution. “This additional share class is also a reflection of the positive feedback we have had from clients wanting to benefit from the efficiency of the share class structure we can offer.”
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