NEW YORK, Sept. 22, 2022 (GLOBE NEWSWIRE) — WisdomTree Investments, Inc. (NASDAQ: WETF), sponsor and manager of exchange-traded funds (“ETF”) and exchange-traded products (“ETP”), today announced the launch of the WisdomTree Emerging Markets ex-China Fund known
(XC), a passively managed ETF listed on the NYSE. XC seeks to track the price and yield performance, gross of fees and expenses, of the WisdomTree Emerging Markets ex-China Index (WTEMXC).1 and has an expense ratio of 0.32%.
“As Chinese market cap has exploded over the past two decades, investors with broad exposure to emerging markets now have about 1/3 of their exposure to a market that is experiencing an incredible amount of headwinds and tailwinds, making it difficult to implement certain asset allocation views. We believe reasonable valuations and depressed sentiment sets the stage for the transition to a more benign environment for emerging markets through 2023,” said Jeremy Schwartz, WisdomTree’s Global Chief Investment Officer. “XC will allow investors to combine with other China-specific exposures – such as the WisdomTree China Ex-State-Owned Enterprises Fund (CXSE) – to scale exposure to any desired balance between China and other emerging markets.”
XC excludes state-owned enterprises (SOEs). At high levels, companies in which the local government has a significant stake (defined as more than 20%) have demonstrated conflicts of interest in their management and tend to have lower profitability than their non-SOE peers. Excluding state-owned companies shifts the portfolio towards high-growth sectors such as consumer discretionary, healthcare and communications services, which reflect the current composition of emerging market economies.
XC: What’s under the hood?
XC is focused on enabling investors to translate their views on China while maintaining a focused approach in former state ownership and potentially propelling portfolios to higher growth. XC is positioned to drive this impactful change through its strategy for former SOEs in emerging markets:
- State-owned companies: Companies that are 20% owned by local government agencies are exempt from inclusion
- Eligibility criteria include market capitalization, volume and ESG considerations
- Weight Modified float-adjusted market capitalization
- Holding caps and weight adjustments
- Country weights: The target weight is the market capitalization of the universe before SOEs were removed
- Sector weights: limit differences to 3% from the base universe
Investors should carefully consider the Fund’s investment objectives, risks, charges and expenses before investing. For a prospectus containing this and other important information, call 866.909.9473 or visit knowledgetree.com. Read the prospectus carefully before investing.
The fund is new and therefore has no performance history.
There are risks involved in investing, including a possible loss of capital. Foreign investments are associated with special risks, such as B. Risk of loss due to currency fluctuations or political or economic uncertainty. Investments in emerging markets are generally less liquid and less efficient than investments in developed markets and are subject to additional risks. The Fund’s investment strategy limits the type and number of investment opportunities available and as a result the Fund may underperform other funds. The Fund’s exposure to a particular sector, country or region may increase its vulnerability to individual economic or regulatory developments relating to that sector, country or region. The fund is not diversified, therefore changes in the market value of a single security can cause the value of the fund’s shares to fluctuate more than would be the case in a diversified fund. Investing in currencies involves additional specific risks such as credit risk and interest rate fluctuations. The Fund invests in securities that are included in or representative of its index, regardless of their investment value, and the Fund does not attempt to outperform its index or take defensive positions in falling markets. Please refer to the fund’s prospectus for specific details on the fund’s risk profile.
WisdomTree Funds are distributed by Foreside Fund Services LLC. Foreside Fund Services LLC. is not affiliated with the other companies mentioned.
Jeremy Schwartz is a registered agent of Foreside Fund Services, LLC.
1 The Wisdom Tree Emerging Markets ex-China Index measures the performance of stocks in emerging markets (excluding China) that are not state-owned companies. State-owned companies are defined as government ownership of more than 20% of a company’s outstanding shares. The Index uses a modified, float-adjusted market capitalization weighting process to determine the weights of countries in the universe (excluding China) prior to the removal of SOEs, while limiting sector deviations to 3% of the base universe. The index was launched on May 2, 2022 with a base value of 200.
WisdomTree Investments, Inc., through its US and European subsidiaries (collectively “WisdomTree”), is an ETF and ETP sponsor and fund manager headquartered in New York. WisdomTree offers products covering equities, commodities, fixed income, leveraged and inverse, currencies, cryptocurrencies and alternative strategies. WisdomTree currently has approximately $73.3 billion in assets under management worldwide.
WisdomTree® is the marketing name for WisdomTree Investments, Inc. and its subsidiaries worldwide.