08.24.2016

WisdomTree Plans Addition to Dynamic Hedge Family

08.24.2016

(This article originally appeared on ETF.com)

In a recent filing, WisdomTree outlined its plans for a new addition to its family of ETFs with dynamic currency hedges. The WisdomTree Dynamic Currency Hedged International Quality Dividend Growth Fund will track an index similar to the ones tracked by the $422 milllion WisdomTree International Hedged Quality Dividend Growth Fund (IHDG) and the $3 million WisdomTree International Quality Dividend Growth Fund (IQDG).

WisdomTree’s “Quality Dividend Growth” methodology targets dividend-paying stocks, screens them for growth and quality factors, and weights the selected stocks by annual dividends. The fund will cover developed markets other than the U.S. and Canada.

The firm’s dynamic hedging approach is reset on a monthly basis, and the hedge can range from none at all to fully hedged and anywhere in between. The degree to which the fund is hedged is determined by three equally weighted criteria: differences in interest rates (the cost of the hedge); momentum (based on 10- and 240-day moving averages); and long-term valuation (purchasing power parity).

WisdomTree has four other dynamically hedged ETFs that were launched in January, but this will be the first one to be based on its “Quality Dividend Growth” methodology.

The filing did not include a ticker, expense ratio or listing exchange.

 

 

 

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