Maintain Broad Fixed Income Exposure While Managing Interest Rate Risk
Zero and Negative Duration ETFs Track Barclays Aggregate
and BofA Merrill Lynch High Yield Interest Rate Indexes
NEW YORK, Dec. 18, 2013 (GLOBE NEWSWIRE) -- WisdomTree (Nasdaq:WETF), an exchange-traded fund ("ETF") sponsor and asset manager, today announced the launch of its Rising Rates ETF Solution Suite on the NASDAQ Stock Market. The ETFs combine widely followed fixed income strategies with targeted U.S. Treasury exposures to achieve specific durations in order to help manage interest rate risk.
A New Tool for Traditional Fixed Income
"With interest rates at historic lows, the values of traditional fixed income portfolios may be vulnerable to losses should rates increase in the future. The WisdomTree Rising Rates ETFs allow fixed income investors to maintain traditional allocations while providing greater flexibility to manage interest rate risk," said Rick Harper, WisdomTree's Head of Currency and Fixed Income.
WisdomTree has worked with leading Fixed Income index providers to develop interest rate driven solutions centered on their benchmark indexes.
Barclays U.S. Aggregate Index based strategies
- WisdomTree Barclays U.S. Aggregate Bond Zero Duration Fund (AGZD), 0.23% expense ratio
- WisdomTree Barclays U.S. Aggregate Bond Negative Duration Fund (AGND), 0.28% expense ratio
BofA Merrill Lynch 0-5 Year U.S. High Yield Constrained Index based strategies
- WisdomTree BofA Merrill Lynch High Yield Bond Zero Duration Fund (HYZD), 0.43% expense ratio
- WisdomTree BofA Merrill Lynch High Yield Bond Negative Duration Fund (HYND), 0.48% expense ratio
Japan in Focus – WisdomTree Japan Interest Rate Strategy Fund (JGBB)
Additionally, WisdomTree has launched the WisdomTree Japan Interest Rate Strategy Fund (JGBB), a strategy designed to benefit if interest rates increase in Japan. JGBB seeks to provide long exposure to U.S. Treasury Bills while at the same time providing exposures to Japanese Government Bonds (JGBs) that are intended to rise in value as Japanese interest rates rise. The Fund also seeks to partially offset against fluctuations in the relative value of the Japanese yen against the U.S. dollar. JGBB is listed on the NASDAQ Stock Market and has an expense ratio of 0.50%.
"The Bank of Japan (BOJ) has overtly targeted a 2% inflation target and unveiled an extensive quantitative and qualitative monetary easing program designed to stimulate Japan's economy. The BOJ's bond buying may be able to compress these JGB rates in the short term, but according to BOJ Governor Kuroda, interest rates should eventually rise if the BOJ accomplishes its goal. JGBB expands WisdomTree's 'Abenomics' toolkit; it is designed to benefit from a weakening yen and rising interest rate environment in Japan," Mr. Harper concluded.
Investors should carefully consider the investment objectives, risks, charges and expenses of the Funds before investing. To obtain a prospectus containing this and other important information, call 866-909-9473 or visit wisdomtree.com. Read the prospectus carefully before investing.
There are risks associated with investing, including possible loss of principal. High-yield or "junk" bonds have lower credit ratings and involve a greater risk to principal. Fixed income investments are subject to interest rate risk; their value will normally decline as interest rates rise. The Duration Funds seek to mitigate interest rate risk by taking short positions in U.S. Treasuries, but there is no guarantee this will be achieved. Derivative investments can be volatile and these investments may be less liquid than other securities, and more sensitive to the effects of varied economic conditions.
Fixed income investments are also subject to credit risk, the risk that the issuer of a bond will fail to pay interest and principal in a timely manner, or that negative perceptions of the issuer's ability to make such payments will cause the price of that bond to decline. The Duration Funds may engage in "short sale" transactions of U.S. Treasuries where losses may be exaggerated, potentially losing more money than the actual cost of the investment and the third party to the short sale may fail to honor its contract terms, causing a loss to the Duration Funds. While the Duration Funds attempt to limit credit and counterparty exposure, the value of an investment in the Duration Funds may change quickly and without warning in response to issuer or counterparty defaults and changes in the credit ratings of each Fund's portfolio investments. Investing in mortgage- and asset-backed securities involves interest rate, credit, valuation, extension and liquidity risks and the risk that payments on the underlying assets are delayed, prepaid, subordinated or defaulted on. Due to the investment strategy of certain Funds, they may make higher capital gain distributions than other ETFs.
Foreign investing involves special risks, such as risk of loss from currency fluctuation or political or economic uncertainty. JGBB focuses its investments in Japan, thereby increasing the impact of events and developments in Japan that can adversely affect performance. Investments in currency involve additional special risks, such as credit risk, interest rate fluctuations, derivative investment risk which can be volatile and may be less liquid than other securities and the effect of varied economic conditions. As this Fund can have a high concentration in some issuers the Fund can be adversely impacted by changes affecting issuers. This may result in greater share price volatility. Interest rate risk with respect to the Fund is the risk that fixed income securities will decline in value because of decreases in interest rates in Japan.
Please read each Fund's prospectus for specific details regarding each Fund's risk profiles. You cannot invest directly in an index.
Barclays Capital Inc. and its affiliates ("Barclays") is not the issuer or producer of the Funds and Barclays has no responsibilities, obligations or duties to investors in the Funds. Barclays and the Barclays Indexes are trademarks owned by Barclays Bank PLC and licensed for use by WisdomTree with respect to the WisdomTree Trust as the Issuer of the Funds. Barclays' only relationship to WisdomTree is the licensing of these Barclays Indexes which is determined, composed and calculated by Barclays without regard to WisdomTree or the Funds. While WisdomTree may for itself execute transaction(s) with Barclays in or relating to these Barclays Indexes in connection with the Funds that investors acquire from WisdomTree, investors in the Funds neither acquire any interest in these Barclays Indexes nor enter into any relationship of any kind whatsoever with Barclays upon making an investment in the Funds. The Funds are not sponsored, endorsed, sold or promoted by Barclays, and Barclays makes no representation or warranty (express or implied) to the owners of the Funds, the Issuer or members of the public regarding the advisability, legality or suitability of the Funds or use of these Barclays Indexes or any data included therein. Barclays shall not be liable in any way to the Issuer, investors, or to other third parties in respect of the use or accuracy of these Barclays Indexes or any data included therein or in connection with the administration, marketing, purchasing or performance of the Funds.
Merrill Lynch, Pierce, Fenner & Smith Incorporated and its affiliates ("BofA Merrill Lynch") indices and related information, the name "BofA Merrill Lynch", and related trademarks, are intellectual property licensed from BofA Merrill Lynch, and may not be copied, used, or distributed without BofA Merrill Lynch's prior written approval. The licensee's products have not been passed on as to their legality or suitability, and are not regulated, issued, endorsed, sold, guaranteed, or promoted by BofA Merrill Lynch. BOFA MERRILL LYNCH MAKES NO WARRANTIES AND BEARS NO LIABILITY WITH RESPECT TO THE INDICES, ANY RELATED INFORMATION, ITS TRADEMARKS, OR THE PRODUCT(S) (INCLUDING WITHOUT LIMITATION, THEIR QUALITY, ACCURACY, SUITABILITY AND/OR COMPLETENESS).
WisdomTree Japan Interest Rate Strategy Index (WTJIRS): Designed to provide exposure to the relative performance of Treasury bills (long position) in relation to Japanese government bonds (short position in JGB futures) as well as the change in the value of the yen against the U.S. dollar (short: JPY vs. USD).
Abenomics: Series of policies enacted after the election of Japanese Prime Minister Shinzo Abe on December 16, 2012 aimed at stimulating Japan's economic growth.
Barclays U.S. Aggregate Bond Index: Represents the investment-grade, U.S. dollar-denominated, fixed-rate taxable bond market, including Treasuries, government-related and corporate securities, as well as mortgage and asset backed securities.
BofA Merrill Lynch 0-5 Year US High Yield Constrained Index: Tracks the performance of short-term US dollar denominated below investment grade corporate debt publicly issued in the US domestic market.
WisdomTree Funds are distributed by ALPS Distributors, Inc. ALPS Distributors, Inc. is not affiliated with Barclays or BofA Merrill Lynch.
Rick Harper is a registered representative of ALPS Distributors, Inc.
WIS006109 (12/2014)
About WisdomTree
WisdomTree® is a New York-based exchange-traded fund ("ETF") sponsor and asset manager. WisdomTree currently offers 61 ETFs across Equities, Fixed Income, Currency Income and Alternatives asset classes. WisdomTree also licenses its indexes to third parties for proprietary products and promotes the use of WisdomTree ETFs in 401(k) plans. WisdomTree currently has approximately $33.6 billion in ETF assets under management. For more information, please visit www.wisdomtree.com or follow us on Twitter @WisdomTreeETFs.
WisdomTree is the marketing name for WisdomTree Investments, Inc. and its wholly owned subsidiary WisdomTree Asset Management, Inc. WisdomTree Asset Management, Inc. is a registered investment advisor and is the investment advisor to the WisdomTree Trust and the WisdomTree ETFs. The WisdomTree Trust is a registered open-end investment company. Each WisdomTree ETF is a series of the WisdomTree Trust.