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Security Profile
- Security Type
- Index ETF
- CUSIP
- 97717X511
- Market Cap
- Micro Cap · $5 Million
- IPO
- 7/9/2015
Fund Description: WisdomTree Trust WisdomTree Barclays U.S. Aggregate Bond Enhanced Yield Fund is an exchange-traded index fund or Index ETF which is a separate investment portfolio of the WisdomTree Trust, an open-end investment management company. INVESTMENT OBJECTIVE: The WisdomTree Trust WisdomTree Barclays U.S. Aggregate Bond Enhanced Yield Fund seeks investment results that closely correspond to the price and yield performance, before fees and expenses, of the Barclays U.S. Aggregate Enhanced Yield Index. INDEX DESCRIPTION: The Barclays U.S. Aggregate Enhanced Yield Index is designed to broadly capture the U.S. investment grade, fixed income securities market while seeking to enhance yield within desired risk parameters and constraints. Rather than re-weight individual securities, the Index uses a rules-based approach to re-weight subgroups of the Index with the aim of earning a higher yield while broadly retaining the risk characteristics of the Index. The 20 subgroups identified in the Index reflect the different risk dimensions of investment grade securities such as sector (asset class) exposure (i.e., treasuries, agency, credit, and securitized), interest rate risk (i.e., duration) and credit risk (i.e., spread). Yield can typically be increased by shifting exposure along any of a number of these risk dimensions and re-weighting the subcomponents of the Index. The Index segments the eligible universe of U.S. investment grade fixed income securities into subgroups defined by sector, quality and maturity characteristics. There are 20 defined subgroups, with six subgroups covering the treasury and agency sectors, nine covering the credit markets, and the remaining five covering securitized securities. The Index employs a proprietary weighting methodology that seeks to enhance yield by allocating more weight to subgroups with higher yields while maintaining defined risk constraints designed to mitigate volatility and turnover drift from the eligible U.S. investment grade fixed income universe. Subgroups with higher yields are identified based on a subgroup’s yield to worst measurements, rather than its yield to maturity. Yield to worst refers to the lowest potential yield that can be received on a bond without issuer default. The duration range of the Index is expected to be within one year of the duration of the Index. A significant portion of the bonds represented in the Index are U.S. agency mortgage-backed pass-through securities. U.S. agency mortgage-backed pass-through securities are securities issued by entities such as Government National Mortgage Association and Federal National Mortgage Association that are backed by pools of mortgages. FUND STRATEGY: The Fund employs a passive management or indexing investment approach designed to track the performance of the Index. The Fund generally uses a representative sampling strategy to achieve its investment objective, meaning it generally will invest in a sample of the securities in the Index whose risk, return and other characteristics resemble the risk, return and other characteristics of the Index as a whole. Most transactions in mortgage-backed pass-through securities occur through standardized contracts for future delivery in which the exact mortgage pools to be delivered are not specified until a few days prior to settlement, referred to as a to-be-announced transaction or TBA Transaction. In a TBA Transaction, the buyer and seller agree upon general trade parameters such as agency, settlement date, par amount and price. The actual pools delivered generally are determined two days prior to the settlement date; however, it is not anticipated that the Fund will receive pools, but instead will participate in rolling TBA Transactions. The Fund expects to enter into such contracts on a regular basis. The Fund, pending settlement of such contracts, will invest its assets in high-quality, liquid short term instruments. Under normal circumstances, at least 80% of the Fund’s total assets (exclusive of collateral held from securities lending) will be invested in component securities of the Index and investments that have economic characteristics that are substantially identical to the economic characteristics of such component securities. The Fund may invest up to 20% of its assets in other fixed income securities and/or such other investments, including other exchange-traded funds (ETFs) that invest in fixed income securities with characteristics similar to the Index constituents, that the Adviser and/or Sub-Adviser believe will help the Fund track the performance of the Index. Other fixed income securities will consist primarily of investment grade securities with similar risk characteristics as the Index components, but up to 5% of the Fund’s total assets may be held in non-investment grade securities with credit ratings deemed to be of no less than BB. FUND MANAGEMENT: WisdomTree Asset Management, Inc. serves as investment adviser to the Fund. Mellon Capital Management Corp. serves as sub-adviser to the Fund.
Company Contact
- Headquarters
- 245 Park Avenue, 35th Floor, New York, NY 10167
- Phone
- 866-909-9473 · Toll-Free 866-909-9473
- Investor Relations
- Jason Weyeneth, CFA · 917-267-3858 · JWeyeneth@wisdomtree.com