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WisdomTree Launches 401(k) US retirement fund platform


WisdomTree Retirement Services, a subsidiary of US exchange-traded fund provider WisdomTree Investments, has announced the launch of a 401(k) platform for retirement savings that seeks to

WisdomTree Retirement Services, a subsidiary of US exchange-traded fund provider WisdomTree Investments, has announced the launch of a 401(k) platform for retirement savings that seeks to offer investors flexibility, transparency, low costs and meaningful asset allocation.

The platform uses index-based investing and WisdomTree’s fundamentals-based ETFs and offers added flexibility to include no-load actively managed mutual funds for further diversification. The open architecture platform features third-party Erisa fiduciary and investment advisory services and is designed to be used by plan sponsors, advisers, brokers and third-party administrators.

‘The inclusion of ETFs in 401(k) plans – the staple of the vast majority of American retirement portfolios – is a logical next step for these products,’ says Arthur Levitt, senior adviser to WisdomTree Investments and former chairman of the Securities and Exchange Commission.

‘Along with other advocates of investor protection in our marketplace, I see ETFs revolutionising the way 401(k) plans are assembled and operated in terms of transparency, low fees and broader selection of available investments.’

WisdomTree chief executive Jonathan Steinberg says: ‘We are excited to introduce this new 401(k) platform at a time when the is poised for a transformation. With emphasis being placed on fees and transparency, we believe the timing is perfect. We believe WisdomTree is ideally suited for retirement plans, as a hallmark of our fundamentally-weighted strategies is the focus on capital preservation and reduced volatility.

‘The comprehensive service platform is entirely fee-transparent, highly flexible and low in cost, offering an all-inclusive 401(k) ETF program for as low as 65 to 70 basis points. Within the WisdomTree 401(k) platform we have eliminated the trading fees and commissions typically associated with retail ETF purchases.’

WisdomTree has teamed up with CLS Investment Firm for asset allocation services, while Professional Capital Service will handle participant record-keeping and ICTC (Ameritrade) is responsible for custody and trading services.

WisdomTree is offering investors two options. The Model Plan is a wrap-fee ETF 401(k) turnkey solution that offers six ETF portfolios attuned to investors’ risk tolerance or target retirement date. The models feature ETFs from WisdomTree as well as Vanguard and iShares, and advisors can supplement the ETF portfolios from a menu of no-load mutual funds. The Custom Plan features the same investment options but allows advisers who can assume more fiduciary responsibility for their clients to create customised portfolios.

‘We anticipate a shift in the way the retirement plan community thinks about investment strategies and related best practices,’ says director of retirement services Al Shemtob. ‘We believe that the transparent, low cost, investor-friendly nature of ETFs will prove attractive to advisers and plan administrators, as the Pension Protection Act sheds light on the hidden fees present in many mutual fund offerings and places new emphasis on fee disclosures, lower expenses and ultimate fiduciary responsibility.’

WisdomTree Investments has developed a family of fundamentally-weighted indices covering all major market capitalisations, both domestically and internationally. In contrast to capitalisation-weighted indices, the WisdomTree indices anchor the initial weights of individual stocks to a measure of fundamental value.

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