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WisdomTree and Dreyfus to launch family of active currency income ETFs


WisdomTree Investments and the Dreyfus Corporation, part of BNY Mellon Asset Management, have announced plans to launch five actively-managed WisdomTree Dreyfus currency income exchange-tr

WisdomTree Investments and the Dreyfus Corporation, part of BNY Mellon Asset Management, have announced plans to launch five actively-managed WisdomTree Dreyfus currency income exchange-traded funds on the NYSE Arca market on May 13.

The WisdomTree Dreyfus Chinese Yuan Fund, WisdomTree Dreyfus Indian Rupee Fund, WisdomTree Dreyfus Brazilian Real Fund, WisdomTree Dreyfus Japanese Yen Fund and WisdomTree Dreyfus Euro Fund will seek to earn current income reflective of money market rates available to foreign investors in the specified country or region.

The funds, which will also seek to provide exposure to changes in the value of the designated currency relative to the US dollar, are classified as actively managed ETFs by the Securities and Exchange Commission.

While the funds maintain the full transparency of ETFs, WisdomTree and Dreyfus say the ability to conduct active portfolio management should permit greater investment flexibility. Although each fund invests in very short-term investment grade instruments, they are not money-market funds and their objective is not to maintain a constant share price.

‘For the first time, we are bringing the ETF structure to an increasingly important asset class,’ says WisdomTree president and chief operating officer Bruce Lavine. ‘Investors can now have exposure to non-US money-market yields and their associated currency movements through a fully transparent, low-fee ETF structure.

‘Currency as an asset class may offer potential diversification benefits when added to a portfolio due to its historically low correlation to equities and fixed income. The WisdomTree Dreyfus currency income ETFs give investors the ability to further diversify their cash holdings internationally.’

Lavine adds: ‘We think there is a growing awareness among investors to view their holdings from a global viewpoint instead of just a dollar viewpoint. When investors do that, they frequently look for alternatives to the low yields and the depreciating purchasing power that they have seen with the dollar lately.’

WisdomTree Investments has developed a family of fundamentally-weighted indices and ETFs. In contrast to capitalisation-weighted indices, the WisdomTree Indexes anchor the initial weights of individual stocks to a measure of fundamental value, an approach that the company believes provides investors with a viable alternative to market cap-weighted indices.

Each WisdomTree ETF is a sub-fund of WisdomTree Trust, a Delaware statutory trust registered as an open-end investment company with the Securities and Exchange Commission and with more than USD4.6bn in assets under management.

Dreyfus Corporation, established in 1951 and based in New York City, manages together with its subsidiaries more than USD280bn in mutual funds, separately managed accounts and institutional portfolios.

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