Category: Open Ended Investment Company
The Fund seeks to track the price and yield performance, before fees and expenses of the WisdomTree US Equity Income UCITS Index (the “Index”). The Index is rule-based and fundamentally weighted and is comprised of the highest dividend yielding US companies based on a composite risk score ("CRS") screening which is made up of two factors (quality and momentum) each carrying an equal weighting. The share class seeks to deliver exposure to the Index while at the same time neutralising exposure to fluctuations of the US Dollar relative to the Euro by implementing a hedging methodology used in the Hedged Index. To be included in the Index, securities must meet minimum market capitalisation and liquidity requirements, have paid dividends over the prior annual cycle and be listed on a US stock exchange. The Index excludes companies based on environmental, social and governance criteria. Companies within the eligible universe are ranked by dividend yield and CRS, respectively. Securities ranking in the highest 30% by dividend yield and which do not fall in the bottom 10% of the CRS are selected for inclusion within the Index. Furthermore, a selected company might be removed from the Index if it is ranked in the top 5% based on dividend yield but falls in the bottom 50% of the CRS. The weight of each component company in the Index is calculated based on the aggregate cash dividends (the "Dividend Stream") and its CRS. The component companies with the top 20% CRS Scores will have their Dividend Stream adjusted by 1.5x (the "Adjusted Dividend Stream"). Component companies are then weighted annually in the Index to reflect their proportionate share of the Adjusted Dividend Stream. Companies which pay more dividends and have higher CRS are more heavily weighted. The Index is "reconstituted" on an annual basis. A "passive management" (or indexing) investment approach will be employed and the Fund will invest in a portfolio of equity securities that so far as possible and practicable consists of a representative sample of the component securities of the Index and forward foreign exchange contracts that so far as possible and practicable replicate the currency hedging methodology of the Hedged Index. The currency hedging methodology consists of entering into forward exchange contracts (contracts between two parties to buy or sell a specific currency in the future at an agreed upon exchange rate) in order to hedge the US Dollar exposure arising as a result of the difference between the US Dollar and the Euro. As it may be difficult, expensive or otherwise inefficient to purchase all the securities in the Index, the Fund may also hold shares or other securities which produce a similar investment return to securities in the Index or may invest in collective investment schemes.