WisdomTree (WETF), the fifth-largest U.S. provider of exchange traded funds, introduced four ETF model portfolios aimed at investors with varying degrees of objectives and risk tolerance.
“These four model portfolios are strategic in nature but also reflect our current allocation preferences, which we will elaborate on below. Portfolios are monitored on an ongoing basis, and their components and composite performance will be updated on a quarterly basis. Changes to the portfolios will typically be implemented at quarter-end to reflect WisdomTree’s strategic and tactical views on the global equity and fixed income markets. Portfolios will be rebalanced back to their targeted asset allocation weights at least annually,” according to a note published by WisdomTree’s Chief Investment Strategist, Luciano Siracusano, Director of Research, Jeremy Schwartz and Head of Fixed Income and Currency, Rick Harper.
One of the four model portfolios – the WisdomTree 100% Dividend ETF Allocation – is geared toward advisors and investors looking for capital appreciation and high current income. That 10-ETF portfolio includes well-known WisdomTree dividend offerings, such as the WisdomTree MidCap Dividend Fund (DON) and the WisdomTree LargeCap Dividend Fund (DLN) . [An ETF Stock Right for the Times]
Over the past three years, DLN has outpaced the Vanguard Dividend Appreciation ETF (NYSEArca: VIG ) by 310 basis points while DON has thumped the S&P MidCap 400 index by 710 basis points.
WisdomTree’s Conservative Allocation portfolio is an 80%/20% fixed income/equity mix that also features DLN and DON as well as 10 bonds ETFs, including four from other ETF providers in addition to the WisdomTree Barclays U.S. Aggregate Bond Zero Duration Fund (AGZD) and the WisdomTree BofA Merrill Lynch High Yield Bond Zero Duration Fund (HYZD) . [Hedge Rate Risk With These Unique Bond ETFs]
That “model portfolio is designed for investors with a mid- to long-range time horizon who are willing to tolerate mild short-term price fluctuations. The portfolio seeks to balance the generation of income with the preservation of capital and combines both passive and actively managed fixed income ETFs as well as a smaller equity allocation in U.S. and international equity ETFs,” according to WisdomTree.
The Moderate Allocation portfolio is a 60%/40% equity/bond split that “seeks to balance growth of capital through domestic and international equity ETFs, with potentially volatility-reducing fixed income ETFs that also serve as a source of current income.”
In addition to its bond holdings, the moderate allocation portfolio generates current income through stakes in six WisdomTree dividend ETFs, including the WisdomTree U.S. Dividend Growth Fund (DGRW) . DGRW, one of the fastest-growing dividend ETFs on the market today, evaluates companies based on earnings quality, return on assets and return on equity. From Nov. 30, 2013 to Nov. 30, 2014, the WisdomTree U.S. Dividend Growth Index saw dividend growth of 10.1%, according to WisdomTree data.
DGRW is also one of the largest holdings in the aggressive model portfolio, an 80%/20% equity/fixed income portfolio aimed at growth-oriented investors seeking robust capital appreciation. While DGRW and three other U.S.-focused WisdomTree ETFs reside in that portfolio, the aggressive model also features a noticeable international feelwith seven developed and emerging markets ETFs.