As of June 30, 2014, WisdomTree had 49 equity exchange-traded funds (ETFs), and 42 of those were incepted prior to December 31, 2013. We thought it worthwhile to showcase, out of these 42 equity ETFs, the top five and bottom five performers of 2014, measured through June 30, 2014, to see what distinct themes about global equity performance would emerge.
Average Annual Performance
Top 5 Performers
• India as the Top Performer: WisdomTree’s India Earnings Fund (EPI) was far and away the top performer of the group. Initially, this was due to excitement over the prospects for a change in government leadership, leading up to the announcement on May 16, 2014, of the Bharatiya Janata Party (BJP)1 and Prime Minister Modi’s electoral victory. Performance has been positive since then as it is perceived that India’s very necessary reform effort is moving in a positive direction.
• Utilities for Yield-Hungry Investors: Interest rates in developed markets have been trending downward2, but investors have been hungry for income-producing options. Utilities are one such place they have looked. The WisdomTree Global ex-U.S. Utilities Fund (DBU) tracks, after costs, fees and expenses, the performance of an Index3 that focuses on the Utilities sector outside of the U.S. Performance of greater than 20% over the period was seen in such markets as Poland, Portugal, Spain, Finland and Indonesia.4 It’s important to note that the S&P 500 Utilities Index was up 18.7% for the period5, so the “ex-US” missed a very strong U.S. Utilities market over the period.
• The Middle East Upgrades: In June 2014 MSCI officially upgraded the United Arab Emirates and Qatar to emerging market status.6 Since then, however, the situation in the Middle East region has become volatile, so much of the positive performance from the WisdomTree Middle East Dividend Fund (GULF) occurred closer to the beginning of 2014 than to the midpoint.
• Real Estate: While the WisdomTree Global ex-U.S. Real Estate Fund (DRW) has broken into double digits with its performance, it’s important to note that U.S. real estate Indexes have outperformed it over this period7. It is another sector that, like Utilities, has the potential for helping to solve a need for income. The ultralow interest rates around the world and further support from the European and Japanese central banks are supporting real estate and income investment strategies around the world.
• U.S. Mid-Caps: The WisdomTree MidCap Dividend Fund (DON) rounds out the top five performing ETFs over this period.
Bottom 5 Performers