WisdomTree brings US 'better than 60/40' ETF to the UK
investmentweek.co.ukIt will track the price and yield performance, before fees and expenses, of the WisdomTree US Efficient Core UCITS index.
The WisdomTree US Efficient Core ETF aims to provide a capital efficient alternative to a traditional 60/40 portfolio. It aims to track the price and yield performance, before fees and expenses, of the WisdomTree US Efficient Core UCITS index, and has a total expense ratio of 0.2%.
Listed today (17 October) on Börse Xetra and Borsa Italiana, the ETF will list on the London Stock Exchange on 18 October. The strategy was originally launched in the US in 2018.
The WisdomTree US Efficient Core ETF works by investing 90% in a diversified basket of the 500 largest US firms by market capitalisation that meet certain ESG criteria.
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In addition, a 60% exposure to US Treasury futures is then overlaid on top, using the remaining 10% of the portfolio as cash collateral for the futures.
The futures portfolio is made up of an equal-weight basket of five US Treasury futures contracts with maturities ranging from two to 30 years, with exposures rebalanced quarterly.
This two-part arrangement across equities and bonds should «help magnify the benefits of the asset allocation», according to WisdomTree, by leveraging a traditional 60/40 portfolio.
Pierre Debru, head of quantitative research and multi asset solutions at WisdomTree, said investors can look at this ETF as a core US equity replacement.
«WisdomTree's US Efficient Core strategy can provide greater return enhancement, risk management and diversification potential versus a 100% equity portfolio,» he said.
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The ETF may have similar
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