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WisdomTree launches three new ETFs on BATS Exchange


Three new ExchangeTraded funds from WisdomTree – the WisdomTree Europe Local Recovery Fund (EZR), the WisdomTree Strong Dollar Emerging Markets Equity Fund (EMSD), and the WisdomTree Global ex-US Hedged Real Estate Fund (HDRW) – are now trading on BATS Exchange.

EZR seeks to provide exposure to European companies with significant European revenue that are best positioned to benefit from increased growth in Europe.

Jeremy Schwartz, WisdomTree Director of Research, says. "Currently, the sector leading growth in the European economy is local consumption and local demand, not global trade.  EZR provides more direct exposure to these European focused businesses. Moreover, typically cyclical sectors have exhibited stronger performance during economic recoveries than their defensive counterparts. EZR is designed with this in mind, including exposure to the six sectors most tied to the cyclical growth potential of the European economy. WisdomTree also employs a unique and innovative weighting process–tied to an economic factor exposure– that tilts weight towards companies that are more sensitive to European economic prospects." [4]EMSD seeks to provide broad exposure to emerging markets companies that are relatively best positioned for a strengthening US dollar environment. 

EMSD is designed to avoid commodity centric sectors that are often hurt by a strengthening US dollar, as well as companies in sectors that typically issue the most debt (financials, telecommunications, and utilities). These highly indebted sectors often issue their debt in US dollars and a strengthening US dollar makes the debt harder to pay back, weighing on equity performance. The result is more exposure to emerging market technology and consumer oriented companies, particularly those companies that have a meaningful amount of revenue exposure in the US markets.

Schwartz said, "Knowing that emerging markets currencies can be both volatile and expensive to hedge, WisdomTree strived to create an alternative solution that would focus on stock selection and weighting, and have the potential to perform relatively well in a strong US dollar environment. Like EZR, the innovative weighting methodology in EMSD is tied to an economic factor exposure–in this case the US dollar–that tilts weight towards emerging market companies relatively better positioned for a strengthening US dollar environment."

EMSD enables investors to focus on the emerging markets sectors and companies expected to perform better in strong US dollar environments while maintaining diversification.

HDRW seeks to provide exposure to global ex-US real estate, dividend-paying companies, while at the same time neutralising exposure to fluctuations of the value of foreign currencies relative to the US dollar.

Schwartz says: "In the current low interest rate environment, companies focused on real estate activities have the potential to provide attractive income streams and differentiated exposure, relative to broader equities. HDRW offers exposure to these dividend-paying companies, sensitive to real estate activities in both developed and emerging markets, while neutralising the impact of currency movements against the US dollar."

The funds are the first WisdomTree ETFS to list on BATS.

“As a global leader in the ETF industry, WisdomTree has a track record of creating successful products that span asset classes and help investors around the globe meet their investment goals,” says Bryan Harkins, Executive Vice President and Head of US Markets at BATS. “We are excited about the continued momentum of our ETF listings business and we are proud to partner with an innovative thought-leader like WisdomTree.”

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