Post-Rebalance Raising ROE and Improving Quality
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This chart illustrates how the rebalance has raised the ROE across four WisdomTree Earnings Indexes. In the 2014 rebalance, for example, the ROE of the WisdomTree SmallCap Earnings Index before and after the rebalance was 7.43% and 11.97%, respectively.
As the bull market in equities carries on, it becomes ever more important to pay attention to the underlying valuations and market fundamentals. Above we show how the rebalance both lowered the P/E ratios of each WisdomTree Earnings Index and raised the ROE, a key metric of quality. We believe these are attractive attributes of market exposures, made even more important by the continued gains in the market we have seen in recent years.
1Source: Bloomberg, as of 11/30/14.
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