Exchange-traded fund (ETF) and exchange-traded product (ETP) sponsor and asset manager WisdomTree has launched the WisdomTree US Multifactor Fund (USMF), on the BATS Exchange.
USMF seeks to track the price and yield performance of the WisdomTree US Multifactor Index and has a net expense ratio of 0.28 per cent.
WisdomTree’s eleven years of experience in the ETF asset management industry is based on its investment philosophy that broad-based, fundamentally weighted ETFs can add value compared to both traditional passive and active managers. Now, through its latest strategy, WisdomTree will directly target multiple smart beta factors in an effort to generate excess return, and reduced volatility, relative to the broader market.
Luciano Siracusano, Chief Investment Strategist at WisdomTree, says: “WisdomTree’s existing suite of dividend- and earnings-weighted ETFs have typically tapped into the smart beta factors of value, quality and size and, in many instances, have outperformed their market capitalisation-weighted benchmarks, while exhibiting relatively low tracking error against those benchmarks. But, for investors willing to assume higher tracking error relative to traditional market capitalisation-weighted benchmarks, a multifactor approach, such as the WisdomTree US Multifactor Fund, has the potential to enhance returns, while providing greater factor diversification and thus, may lower volatility compared to single-factor approaches.”
USMF seeks to track the WisdomTree US Multifactor Index, which was designed to beat the market through an innovative selection and weighting methodology by gaining exposure to the factors of value, quality, momentum, size and low correlation, while managing volatility and maintaining sector neutrality.
Siracusano says: “We believe USMF is a simple, intuitive solution for investors seeking to incorporate the potential of factor investing into their US equity allocations.”