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WisdomTree launches Western Asset Unconstrained Bond Fund


WisdomTree has launched the WisdomTree Western Asset Unconstrained Bond Fund (UBND), an actively managed fund that seeks to provide broad exposure to the global dollar denominated bond market for balanced core fixed income exposure. 

UBND is listed on the Nasdaq Stock Market with a net expense ratio of 0.55 per cent.

An unconstrained fixed income strategy provides increased flexibility to generate returns and manage risk in multiple market environments. In practice, an unconstrained fixed income strategy seeks to untether a manager’s investment decisions from a traditional fixed income benchmark.

Rick Harper, WisdomTree Head of Fixed Income & Currency, says: “UBND seeks to provide exposure to the desirable characteristics of fixed income – income potential, diversification and risk reduction – while avoiding the undesirable – segments of bond markets with overvalued securities and unattractive risk-return tradeoffs.  And in the ETF structure, we’re providing daily transparency into an actively managed bond portfolio, so investors can see what they hold, not what they held.”

By providing this strategy in an ETF, WisdomTree sought to tap the expertise of Western Asset Management Company (Western Asset), a manager with over 11 years of unconstrained investing experience. Mark Lindbloom, Western portfolio manager of UBND, was recently named the Morningstar Fixed Income Fund Manager of the Year for 2014.2

“Despite its name, unconstrained strategies are not undisciplined— a focus on risk is essential to management of these strategies. At its core, unconstrained investing allows the flexibility to allocate capital based on an independent assessment of value rather than the issuance patterns of the major constituents in an index. Traditional market-capitalisation weighted benchmarks reflect supply, not necessarily value,” says Lindbloom.

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