WisdomTree Investments, Inc. WETF, one of the largest issuers of smart beta exchange-traded funds, added to its ETF stable Thursday with the debut of two new funds.
The WisdomTree ICBCCS S&P China 500 Fund WCHN, which tracks the S&P China 500 Index, adds to WisdomTree's expansive lineup of international ETFs, including emerging markets funds. China is the largest country weight in many traditional, diversified emerging markets ETFs, but those funds often feature large exposure to state-owned enterprises while lacking leverage to more exciting growth opportunities in the Chinese economy.
“When measured purely by market capitalization, China has the second largest equity market in the world,” said WisdomTree. “Over the last decade, Chinese policy-makers led by President Xi Jinping have sought to gradually open the historically off-limits Chinese markets to outside capital.”
A Different Approach
WCHN is heavily allocated to three sectors: technology, financial services, and consumer discretionary. Those groups combine for 68.5 percent of the new ETF's weight. Tencent Holdings Ltd. TCEHY and Alibaba Group Holding, Ltd. BABA combine for 16.6 percent of WCHN's roster. WCHN's top 10 holdings combine for nearly 35 percent of the new ETF's weight.
“The S&P China 500 Index is one of the only broad-based indexes offering exposure to all Chinese equity share classes, listed both in Mainland China and internationally,” according to WisdomTree. “In addition, because the S&P China 500 Index reflects the sector composition of the total universe of Chinese companies, it has a more diversified sector exposure when compared with other China-focused indexes.”
WCHN charges 0.55 percent per year, or $55 on a $10,000 investment.
An ETF Of ETFs
The WisdomTree Balanced Income Fund WBAL is WisdomTree's newest income offering. WBAL looks to hold an income-oriented portfolio of 60 percent stocks and 40 percent fixed income.
WBAL tracks the WisdomTree Balanced Income Index, which “is designed to provide a balanced exposure to global equities and fixed income and is comprised of ETFs. The ETFs comprising the Index, which may include WisdomTree ETFs and non-WisdomTree ETFs, must trade on a U.S. stock exchange and are reconstituted and rebalanced annually,” according to WisdomTree.
The WisdomTree High Dividend Fund DHS and the WisdomTree Barclays Yield Enhanced US Aggregate Bond Fund AGGY combine for almost 40% of WBAL's weight. Nine of the ETF's 11 holdings are other WisdomTree ETFs. WBAL charges 0.35 percent per year, or $35 on a $10,000 investment.
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