WisdomTree Launches US Multi-Asset ETF in Europe
WisdomTree has launched a multi-asset ETF that offers alternative exposure to the traditional 60/40 portfolio via a basket of U.S. equities and Treasury futures.
The WisdomTree US Efficient Core UCITS ETF (NTSX) is listed on the London Stock Exchange, Deutsche Boerse and Euronext Milan with a total expense ratio of 0.20%.
NTSX is self-indexed and aims to deliver up to 90% exposure to U.S. large caps and 60% to U.S. Treasury futures in a bid to provide a “more capital-efficient alternative to the traditional 60/40 portfolio”.
The asset manager said the exchange-traded fund is a leveraged version of the 60/40 portfolio, allowing investors to receive a similar level of volatility as a 100% equity portfolio but with a better Sharpe ratio than a traditional allocation.
The U.S. equity bucket will be selected from the 500 largest companies by market capitalization with an added ESG, or environmental, social and governance, screen.
The 60% U.S. Treasury futures exposure is then overlaid on top, with the remaining 10% of the portfolio used as cash for the futures collateral.
According to WisdomTree, the futures portfolio comprises five equally weighted U.S. Treasury futures contracts with maturities of two to 30 years that are rebalanced quarterly.
The fund is already listed in the U.S. and has amassed $825 million since it launched in 2018.
Diversification Beyond All Equities
“We believe investors can look at this ETF as a core U.S. equity replacement. NTSX can provide greater return enhancement, risk management and diversification potential versus a 100% equity portfolio,” Pierre Debru, head of quantitative research and multi-asset solutions at WisdomTree, said.
“It may have similar volatility to a 100% equity allocation over market cycles, but our research shows it can help reduce drawdowns and potentially provide higher risk-adjusted returns too,” he added.
He also said the fund could also be used to replace a combination of stocks and bonds to “free up space for allocations to other diversifiers and alternative strategies.”
Alexis Marinof, head of Europe at WisdomTree, said: “NTSX can help investors create optimal portfolio blends and magnify portfolio exposures through the same concept that drives their asset allocation.”
In August, WisdomTree expanded its range of short and leveraged ETFs after it unveiled the WisdomTree CAC 40 3x Daily Leveraged (3CAC) and WisdomTree CAC 40 3x Daily Short (3CAS).
A month earlier, it closed three fixed-income ETFs due to low demand.
ETFS Capital, etf.com’s parent company, owns 10.2% of WisdomTree’s shares outstanding.
