WisdomTree celebrates 10-year anniversary of US earnings ETFs

Feb 28th, 2017 | By | Category: Equities

WisdomTree is celebrating the ten-year anniversary of the WisdomTree domestic earnings family of ETFs – the WisdomTree MidCap Earnings Fund (NYSE: EZM), WisdomTree SmallCap Earnings Fund (NYSE: EES), WisdomTree Total Earnings Fund (NYSE: EXT), and WisdomTree Earnings 500 Fund (NYSE: EPS).

WisdomTree celebrates 10-year anniversary of US earnings ETFs

The WisdomTree family of domestic earnings ETFs have their constituent holdings weighted by ‘core earnings’ – designed to reflect the actual profitability of an enterprises ongoing operations.

Companies within the funds’ underlying indices, which have been designed in-house by WisdomTree’s indexing division, must be listed in the US and have generated positive cumulative earnings over their most recent four fiscal quarters. The indices utilize a smart beta strategy which weights constituents by earnings rather than the traditional method of market capitalization. “Core earnings”, computed by Standard & Poors, is used as the weighting metric and is designed to include expenses, incomes and activities that reflect the actual profitability of an enterprises ongoing operations.

According to WisdomTree, this methodology taps into value and quality factors, and within the mid and small capitalization asset classes, the size factor, all of which have been associated with excess returns compared to the broader market over time.

Indeed the ETFs have outperformed the majority of peers in their respective Morningstar categories over the past decade.

Since their respective inceptions in February 2007 through February 2017, EZM ranked 4th out of 222 funds, outperforming 98% of the funds in its peer group; EES ranked 44th out of 372 funds, outperforming 88%; EXT ranked 107th out of 832 funds, outperforming 87%; and EPS ranked 171st out of 832 funds, outperforming 80%. Data as of 28 February 2017.

Luciano Siracusano, WisdomTree chief investment strategist, commented: “WisdomTree is one of the few smart beta providers with a proven performance record over the past decade. Ten years of real-time results are a significant milestone for our earnings-weighted ETFs and a testament to the strength of this strategy across a mix of market conditions. By weighting profitable companies based on the earnings they generate, WisdomTree has created broad exposures to major US equity classes, while helping investors generate low-fee alpha in the core of their allocations.”

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