WisdomTree, the New York-based fund company known for its fundamentally weighted indexes focusing on dividend and income exchange traded funds (ETFs), is taking their franchise another step further.
The ETF provider files with the Securities and Exchange Commission (SEC) for two new actively managed ETFs: the WisdomTree Dreyfus Commodity Currency (CCX) and the WisdomTree Emerging Market Local Debt Fund (ELD).
ELD is a fixed-income product that will seek income and capital appreciation by investing in emerging market debt that’s denominated in the local currency. Countries that may appear in the fund include Brazil, Chile, Colombia, Hungary, Indonesia, Poland, Turkey, Thailand and Peru, among others. Each country’s exposure will be limited to 20% of the fund, and the fund will hold both investment-grade and non-investment-grade debt. [ETFs to Hedge a Falling Dollar.]
CCX is another addition to WisdomTree’s lineup of eight currency ETFs. This fund will work like the others in that it will achieve returns that reflect the money market rates in commodity producing countries and changes in their currency against the U.S. dollar. [3 Things to Know When Using ETFs.]
The idea behind the fund, explains Shishir Nigam for Active ETFs in Focus, is that as commodity demand rises, money tends to flow into countries that produce those commodities, leading to appreciation in the local currency. CCX will give exposure to Australia, Brazil, Chile, Indonesia, New Zealand, Norway, Russia and South Africa.
WisdomTree also recently filed with SEC to offer a fund of funds product. Olivier Ludwig for Index Universe reports that the ETF will be designed to make monthly cash payouts while providing returns that correspond to the price and yield of an index of large-capitalization equity securities listed on U.S. securities exchanges, according to the filing. [ETFs for a Greek Tragedy.]
The fund of funds theory is that they invest in whole funds rather than investing directly in stocks, bonds, cash or other investments. The initial fund will charge for its own direct expenses, in addition to bearing a proportionate share of the expenses charged by the underlying funds in which it invests. [Mutual Fund to ETF Conversions Explained.]
For more stories about new ETFs, visit our new ETFs category.
Tisha Guerrero contributed to this article.