NEW YORK, March 4, 2015 (GLOBE NEWSWIRE) -- WisdomTree (Nasdaq:WETF), an exchange-traded fund ("ETF") and exchange-traded product ("ETP") sponsor and asset manager, today announced the launch of the WisdomTree Europe Hedged SmallCap Equity Fund (EUSC) on the NYSE Arca. EUSC seeks to provide exposure to small capitalization stocks within European equity markets while hedging exposure to the euro. The Fund has a net expense ratio of 0.58%.
Small Cap Equities – A Response to European Central Bank (ECB) Policy Potential
In Europe – as in other global equity markets – small companies tend to offer big potential, providing access to the local economic prospects. Mario Draghi followed up his promises to do "whatever it takes" and the European Central Bank (ECB) announced a new round of aggressive stimulus that is encouraging momentum and positive economic sentiment for European assets.1
Jeremy Schwartz, WisdomTree Director of Research, said, "When you have inflection points – such as the ECB's decisive action to undertake quantitative easing (QE) by purchasing government bonds and expand the balance sheet – this may be supportive for equities and designated 'risk' assets.2 And typically, small caps are often tied to local economic prospects, more so than globally oriented large caps and therefore, more responsive to shifts in local economic cycles. Small caps could be a favored asset class if the ECB QE program successfully reignites inflation and growth in Europe."
Building on Success of $12 Billion WisdomTree Europe Hedged Equity Fund (HEDJ)
The euro continues to be a source of uncertainty. For investors looking to isolate local European equity exposure by removing the euro as a source of risk, the WisdomTree Europe Hedged Equity Fund (HEDJ) has become an important exposure with approx. $12 billion in assets under management.
Schwartz said, "To expand our coverage of European stocks beyond the large capitalization, exporter focus of HEDJ, we have designed EUSC to capture the small cap portion of the equity markets that we believe are more levered to local European growth and revenue."
"When considering the divergence between the U.S. central bank – which is looking to tighten monetary policy, and the ECB – which undertook more aggressive stimulus, it is reasonable to expect the euro to remain challenged relative to the U.S. dollar. As a result, we believe that currency exposure may negatively impact U.S. investors' international equity returns," Schwartz added.
Expanding The WisdomTree Suite of European-Focused Funds
With the launch of EUSC, WisdomTree now offers four ETFs for European equity exposure.
|Ticker||Fund Name||Expense Ratio|
|EUSC||WisdomTree Europe Hedged SmallCap Equity Fund||0.58%|
|HEDJ||WisdomTree Europe Hedged Equity Fund||0.58%|
|DFE||WisdomTree Europe SmallCap Dividend Fund||0.58%|
|EUDG||WisdomTree Europe Dividend Growth Fund||0.58%|
This EUSC Fund is new and has a limited operating history.
Investors should carefully consider the investment objectives, risks, charges and expenses of the Fund before investing. To obtain a prospectus containing this and other important information, please call 866.909.WISE (9473), or visit wisdomtree.com to view or download a prospectus. Read the prospectus carefully before you invest.
There are risks associated with investing, including possible loss of principal. Foreign investing involves special risks, such as risk of loss from currency fluctuation or political or economic uncertainty. Investments in currency involve additional special risks, such as credit risk and interest rate fluctuations. The Funds focus their investments in Europe, thereby increasing the impact of events and developments associated with the region, which can adversely affect performance. The securities of small-capitalization companies generally trade in lower volumes and are subject to greater and more unpredictable price changes than larger-capitalization stocks or the stock market as a whole. Derivative investments can be volatile, and these investments may be less liquid than other securities, and more sensitive to the effects of varied economic conditions. The EUSC Fund uses various strategies to attempt to minimize the impact of changes in the value of the euro against the U.S. dollar, and these strategies may not be successful. The Fund invests in the securities included in, or representative of, its Index regardless of their investment merit, and the Fund does not attempt to outperform its Index or take defensive positions in declining markets. Due to the investment strategy of these Funds, they may make higher capital gain distributions than other ETFs. Please read each Fund's prospectus for specific details regarding each Fund's risk profile.
Jeremy Schwartz is a registered representative of Foreside Fund Services, LLC.
WisdomTree Funds are distributed by Foreside Fund Services, LLC.
WisdomTree Investments, Inc., through its subsidiaries in the U.S. and Europe (collectively, "WisdomTree"), is an exchange-traded fund ("ETF") and exchange-traded product ("ETP") sponsor and asset manager headquartered in New York. WisdomTree offers products covering equities, fixed income, currencies, commodities and alternative strategies. WisdomTree currently has approximately $49.2 billion in assets under management globally. For more information, please visit www.wisdomtree.com or follow us on Twitter @WisdomTreeETFs.
WisdomTree® is the marketing name for WisdomTree Investments, Inc. and its subsidiaries worldwide.
1 Source: European Central Bank (ECB), June 5, 2014, press conference.
2 'Risk' Assets: Assets not backed by the full faith and credit of a government entity.
Source:WisdomTree Investments, Inc.