ETF Spotlight on the WisdomTree Asia Local Debt Fund (NYSEArca: ALD), part of an ongoing series.
Assets: $348.2 million
Objective: The WisdomTree Asia Local Debt Fund is actively managed and tries to generate a high level of total returns through investing in local debt denominated in currencies of Asia Pacific ex-Japan countries.
Holdings: Top holdings include Malaysia 3.26% 3/1/2018 5.3%, Korea 2.75% 9/10/2017 5.2%, Malaysia 4.012% 9/15/2017 4.8%, Philippines 4.95% 1/15/2021 4.2% and Queensland Tsy Corp 6.0% 7/21/2022 4.6%.
What You Should Know:
- WisdomTree sponsors the fund.
- ALD has a 0.55% expense ratio.
- The ETF has 40 bond holdings and the top ten make up 37.3% of the overall portfolio.
- Country allocations include South Korea 12.8%, Singapore 12.5%, Malaysia 12.4%, Australia 12.0%, China 6.6%, India 6.4%, New Zealand 6.4%, Taiwan 6.4%, Philippines 6.3%, Indonesia 6.3%, Thailand 6.2% and Hong Kong 5.9%.
- Credit quality allocations include AAA 21.5%, AA 30.2%, A 21.1%, BBB 6.5%, BB 5% and not rated 15.7%.
- The fund is up 0.7% over the past month, up 2.9% over the past three months and up 4.2% year-to-date.
- The ETF has a 3.07 year effective duration.
- The fund shows a 2.57% 30-day SEC yield.
- ALD is trading 1.8% above its 200-day exponential moving average.
- Since the fund tracks local currency denominated debt, investors will be exposed to currency risks.
- If the foreign currencies depreciate, or U.S. dollar appreciates, the bond gains will translate to a lower U.S. dollar return.
- As an actively managed ETF, the managers won’t adhere to a strict methodology and have more leeway to change up their styles to fit the prevailing market environment.
Next page: The latest news
The Latest News:
- ALD touched a new 52-week high Tuesday, one just 13 ETFs to do so.
- Heavy trading centered on new issues and piled into Indonesian sovereign debt ahead of the presidential elections on July 9, Reuters reports.
- Japan’s aging population has helped drive demand for Asian bonds as the country’s pension fund moves to diversify its holdings, Bloomberg reports.
- “The moves by GPIF and other public pension funds should be positive for pretty much all of Asia’s financial markets,” Thiam Hee Ng, a senior economist at the Asian Development Bank in Manila, said in the Bloomberg article. “Japanese investors have traditionally been quite conservative. We’d expect that they would focus their investment on the more developed and high-rated markets in Asia like Korea, Hong Kong or Singapore.”
WisdomTree Asia Local Debt Fund
For past stories in this series, visit our ETF Spotlight category.
Max Chen contributed to this article.