Our Take on ESG Investing | Modern Alpha Channel

By Jarrett Lilien, President & COO

WisdomTree launched 15 years ago with a simple premise: to create a better investment experience. Each day we seek to fulfill this mission, whether by offering more transparent investment vehicles with our pure-play U.S. ETF family, providing exposure to traditionally hard-to-access asset classes and countries or designing methodologies that focus on the future growth and sustainability of the underlying companies.

As a long-time leader and believer in the need for clear purpose, diversification and full transparency in how investors allocate their money, ESG (environmental, social and governance) investing is a big part of WisdomTree’s approach. We believe there is a better way to invest and ESG is part of it.

Walk the Walk

We recognize that the importance of an ESG approach goes beyond just great products. For several years now, WisdomTree has been applying measures to be a more socially responsible company, as we continue to expand our own diversity, equality and inclusion efforts. We’re proud to have built a diverse and inclusive workforce across gender, race, age and ability, including in our leadership teams and on our boards. Our employee-led Women’s Initiative Network (WIN) events also showcase our commitment to equity in the workforce and are designed to empower women in our organization. WisdomTree Investments’ Sustainability Corporate Governance Committee keeps us accountable in our efforts to embed sustainability mandates at a corporate level.

Sustainability and responsibility are embedded throughout our organization, as we encourage initiatives around community service and being more eco-friendly. It’s our view that WisdomTree’s efforts to be a more socially responsible company benefit our investors, employees and shareholders.

Read our Corporate Social Responsibility report here.

Our ESG Offering

We believe, when combined with our traditional investment philosophy including diversification, transparency and tax efficiency, ESG considerations are a valuable additional risk or performance factor. We currently offer a family of broad-based U.S., international and emerging market equity strategies that combine the potential performance benefits of our multifactor methodology while reflecting ESG values to meet investors’ evolving needs. Our ex-state-owned methodology, introduced in 2014, underlines our conviction that government-owned companies, particularly in the emerging markets, can often have a negative impact on long-term performance. We offer three distinct ex-state-owned approaches in broad emerging markets, China and India. Additionally, WisdomTree recently became an UNPRI signatory.

Empowering Advisors and Their Clients

In a recent research study led by our Head of Advisor Innovation, Brad Shepard, we found that while 85% of advisors believe presenting ESG funds would improve their clients’ view of them, the majority of them don’t bring these investments up unless their clients specifically ask. That could be a missed opportunity.

We are committed to providing the necessary education and tools for advisors to feel comfortable and equipped to discuss ESG investing approaches with their clients, and to offer a level of transparency for investors themselves to make educated investment decisions.

Our mission to create a better investment experience continues with ESG.

Learn more about our ESG approach.

Originally published by WisdomTree, 3/11/21

Important Risks Related to this Article

ESG investment strategy may limit the types and number of investment opportunities available to the Fund and, as a result, the Fund may underperform other funds that do not have an ESG focus. Companies selected for inclusion in the Fund may not exhibit positive or favorable ESG characteristics at all times and may shift into and out of favor depending on market and economic conditions. While the Fund is actively managed, the Fund’s investment process is expected to be heavily dependent on quantitative models and the models may not perform as intended. 

U.S. investors only: Click here to obtain a WisdomTree ETF prospectus which contains investment objectives, risks, charges, expenses, and other information; read and consider carefully before investing.

There are risks involved with investing, including possible loss of principal. Foreign investing involves currency, political and economic risk. Funds focusing on a single country, sector and/or funds that emphasize investments in smaller companies may experience greater price volatility. Investments in emerging markets, currency, fixed income and alternative investments include additional risks. Please see prospectus for discussion of risks.

Past performance is not indicative of future results. This material contains the opinions of the author, which are subject to change, and should not to be considered or interpreted as a recommendation to participate in any particular trading strategy, or deemed to be an offer or sale of any investment product and it should not be relied on as such. There is no guarantee that any strategies discussed will work under all market conditions. This material represents an assessment of the market environment at a specific time and is not intended to be a forecast of future events or a guarantee of future results. This material should not be relied upon as research or investment advice regarding any security in particular. The user of this information assumes the entire risk of any use made of the information provided herein. Neither WisdomTree nor its affiliates, nor Foreside Fund Services, LLC, or its affiliates provide tax or legal advice. Investors seeking tax or legal advice should consult their tax or legal advisor. Unless expressly stated otherwise the opinions, interpretations or findings expressed herein do not necessarily represent the views of WisdomTree or any of its affiliates.

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