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WisdomTree Launches Fundamental U.S. Corporate Bond ETF Suite
WisdomTree announced the launch of four U.S. Corporate Bond ETFs on the BATS Exchange on Wednesday.
The four new ETFs seek to offer an intuitive alternative to market cap-weighted fixed income:
- WisdomTree Fundamental U.S. Corporate Bond Fund (BATS: WFIG)
- WisdomTree Fundamental U.S. Short-Term Corporate Bond Fund (BATS: SFIG)
- WisdomTree Fundamental U.S. High Yield Corporate Bond Fund (BATS: WFHY)
- WisdomTree Fundamental U.S. Short-Term High Yield Corporate Bond Fund (BATS: SFHY)
WFIG and SFIG seek to provide investors with the potential to capture the performance of selected issuers in the U.S. investment-grade corporate bond market—they each have a net expense ratio of 0.18%1 .
WFHY and SFHY seek to provide investors with the potential to capture the performance of selected issuers in the U.S. high yield corporate bond market—they each have a net expense ratio of 0.38%.
For WFIG and SFIG focused on U.S. investment-grade corporate bonds, WisdomTree has identified deteriorating cash flows, rising leverage and weakening profitability compared to peers as effective markers for potential credit concerns. WisdomTree believes eliminating these issuers can generate a considerable improvement in the strategy’s downside risk protection.
For WFHY and SFHY focused on U.S. high-yield corporate bonds, the presence of negative cash flows over several years has provided a warning signal for speculative credits. The strategies focus on issuers exhibiting more favorable cash flow characteristics to mitigate downside risk and significantly reduce overall volatility.
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