WisdomTree launches two smart beta fixed income ETFs

WisdomTree has launched WisdomTree EUR Government Bond Enhanced Yield Ucits ETF (GOVE) and the WisdomTree EUR Aggregate Bond Enhanced Yield Ucits ETF (YLD) on the Deutsche Börse Xetra/Borsa Italiana.

The strategies seek to take a more intuitive approach to indexing by seeking to provide enhanced yields on core
European investment grade bonds and treasuries, without potentially riskier exposures.

WisdomTree EUR Aggregate Bond Enhanced Yield Ucits ETF aims to achieve both a higher yield and a low tracking error with respect to the market benchmark, the Bloomberg Barclays Euro Aggregate Bond index, which measures the performance of the investment grade, Euro denominated, fixed rate bond market, including treasuries, government-rated, corporate and securitized bonds. The ETF does this by following a rules-based approach which tilts the weights of the market benchmark towards higher yielding segments of the market while controlling risk and
tracking error vs the market benchmark. TER is 0.18%.

WisdomTree EUR Government Bond Enhanced Yield Ucits ETF aims to achieve both a higher yield and a low tracking error with respect to the market benchmark, the Bloomberg Barclays Euro Treasury Bond index, which measures the performance of the investment grade, Euro denominated, fixed rate government bonds issued by the sovereign countries participating in the EMU. The ETF does this by following a rules-based approach to tilt the weights of the market benchmark towards higher yielding segments of the market while controlling for risk and tracking error versus the market benchmark. TER is 0.16%.

Rafi Aviav, WisdomTree head of Product Development in Europe, said, “The new ETFs are important addition to the European fixed income fund landscape. The strategy employed by both funds offers a unique solution for investors to potentially increase the yield they’re getting from the market while tightly controlling risk. By tilting towards yield the strategy aims to deliver on one of the most important attributes for fixed income investors, while avoiding excessive tracking error and risk-taking with respect to the benchmark.”

ABOUT THE AUTHOR
Ridhima Sharma
Ridhima Sharma speaks German and is DACH Correspondent for InvestmentEurope. She has more than 8 years of experience in the media industry. Before joining us, she was working in India and covering automotive and lifestyle sectors. Over the years many of her stories have been published in various magazines across India.

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