WisdomTree has launched the WisdomTree US Quality Growth UCITS ETF which seeks to track the price and yield performance, before fees and expenses, of the WisdomTree US Quality Growth UCITS Index and has a total expense ratio (TER) of 0.33 per cent. The ETF will be listed on Börse Xetra, Borsa Italiana and the London Stock Exchange.
The firm writes that the proprietary Index is designed to track the performance of US large-cap companies with strong quality (e.g., high profitability) and growth characteristics that meet WisdomTree’s ESG criteria.
WisdomTree’s approach aims to provide higher upside participation in bull markets and generate positive excess returns over a full market cycle. The growth factor aims to capture companies experiencing growth in sales, realised earnings, and expected earnings, often including disruptive companies and technological giants, allowing for greater upside participation. The quality factor adds stability to a portfolio and helps filter out the most unprofitable, highly speculative, and low-quality names. The firm writes that this combination positions the WisdomTree US Quality Growth UCITS ETF as a strategic, long-term equity solution for investors looking for thoughtful exposure to the growth segment of the US equity market without sacrificing the quality of their portfolio.
Pierre Debru, Head of Quantitative Research & Multi Asset Solutions, WisdomTree, says: “Growth tends to capture disruptive and growing companies, which translates into higher allocation to technological giants, yet historical returns suggest that investing in growth stocks with no filters can be a losing game over the long run. Applying a quality screen to growth stocks can help ensure portfolio companies are healthy and can deliver results over time. High-quality growth stocks have historically been better at helping investors withstand drawdowns than a pure growth allocation without sacrificing the ability to participate in market rebounds. The new ETF is an alternative to growth strategies such as the Nasdaq 100, as it takes a more holistic approach to portfolio construction instead of focusing solely on the market capitalisation of constituents or their stock exchange listing.”
European investors can now access QGRW, which is already an available strategy in the US, initially launched in 2022. WisdomTree US Quality Growth UCITS ETF will join WisdomTree’s USD360 million range of Quality Growth ETFs.
Through the WisdomTree US Quality Growth UCITS ETF, investors can continue to benefit from WisdomTree’s style-consistent, transparent, and systematic investment process rooted in academically driven research, the firm says.
Alexis Marinof, Head of Europe, WisdomTree, says: “Since WisdomTree was founded, we’ve focused on launching differentiated and added-value investment solutions for our clients. At the heart of our equity philosophy is the belief that quality stocks should be the cornerstone of every equity portfolio. They are vital to building resilient portfolios that can help investors build wealth over the long term and navigate the inevitable storms. We know investors are positioning portfolios to benefit from the forthcoming interest rate cuts in the US, which is expected to be a positive catalyst for growth-oriented US equities. But as we’ve seen in recent years, nothing is promised in financial markets. So, by focusing on quality rather than market capitalisation, investors can benefit from a more robust approach than market cap-weighted growth funds, without sacrificing returns in up markets.”
