WisdomTree's Transparent Actively-Managed Multifactor ETFs Debut

WisdomTree Investments bolstered their ETF roster today, launching two transparent actively-managed multifactor ETFs, the WisdomTree Emerging Markets Multifactor Fund (NYSEArca: EMMF) and the WisdomTree International Multifactor Fund (NYSEArca: DWMF).

EMMF seeks returns via ta transparent actively-managed strategy that invests in emerging market equity securities that have the highest potential for returns based on proprietary measures of valuation, quality, momentum and volatility reduction factors. DWMF uses a transparent actively-managed strategy, investing in developed market equity securities, excluding the U.S. and Canada, that have the highest potential for returns based on proprietary measures similar to EMMF.

Related: WisdomTree Debuts New Balanced Fund ETF ‘NTSX’

Both funds manage currency risk through a dynamic currency hedging strategy. EMMF has a net expense ratio of 0.48% DWMF has a net expense ratio of 0.38%.

“Actively managed strategies are an exciting new frontier for ETFs,” said Jeremy Schwartz, WisdomTree Director of Research. “We believe our Modern Alpha approach represents a new breed of strategies that incorporate the pursuit of outperformance with the benefits of the ETF structure.”

Like the WisdomTree U.S. Multifactor Fund (BATS: USMF), EMMF and DWMF both utilize a proprietary investment strategy which includes a mix of fundamental and technical factors that create a proprietary stock selection and weighting model. The approach involves screening a broad universe of stocks based on a composite multifactor score, a volatility score, and sector and country overweight and underweight bands to create a high active share portfolio in pursuit of outperformance.