WisdomTree has filed paperwork with the SEC for an Emerging Markets Local Debt Fund ETF. There is no symbol noted at this time.The WisdomTree Emerging Markets Local Debt Fund (the “Fund”) will seek to provide investors with income and total returns through investment in local currency debt instruments of emerging market issuers.

The Fund’s Investment Strategy

The Fund is an actively managed exchange-traded fund (“ETF”). The Fund is designed to provide exposure to a broad range of emerging market countries and issuers through investment in local currency debt instruments. A “local currency” debt instrument is a bond, note or other debt obligation denominated in a currency other than the U.S. dollar.

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The Fund may be appropriate for investors seeking: 

  *   Exposure to emerging market economies  

  *   Potential appreciation from the value of emerging market currencies relative to the U.S. dollar 

  *   Income from investment in potentially higher-yielding emerging market debt instruments.

The Fund is designed to provide exposure to a broad range of emerging market countries. The Fund intends to invest in issuers in Asia, Latin America, Eastern Europe, Africa and the Middle East. Likely country exposures include Brazil, Chile, Columbia, Czech Republic, Hungary, Indonesia, Israel, Malaysia, Mexico, Peru, Philippines, Poland, Russia, South Africa, South Korea, Thailand and Turkey.

The Fund intends to invest primarily in debt instruments issued by emerging market governments, government agencies, corporations and supranational issuers. “Supranational issuers” include international organizations such as the World Bank, the International Monetary Fund, and regional development banks.

The Fund typically will maintain aggregate portfolio duration and portfolio maturity of between          and          years. Aggregate portfolio duration is a measure of the portfolio’s sensitivity to changes in the level of interest rates. The average portfolio maturity of the Fund is the average of all the current maturities of the individual securities in the Fund’s portfolio. Average portfolio maturity and aggregate portfolio durations are important to investors as an indication of the Fund’s sensitivity to changes in interest rates. Funds with longer portfolio maturities and higher durations generally are subject to greater interest rate risk. The Fund’s actual portfolio duration and maturity may be longer depending upon market conditions.

The universe of emerging markets local currency debt currently includes securities that are rated “investment grade” as well as “non-investment grade” securities. The degree of credit risk for a particular security may be reflected in its credit rating. Debt instruments rated investment grade generally are subject to less credit risk than non-investment grade instruments. While the Fund intends to provide a broad-based exposure to emerging market debt, the Fund will limit its exposure to more speculative credits. The Fund will invest no more than 15% of its assets in securities rated B or below by Moody’s, or equivalently rated by S&P or Fitch, or, if unrated, determined by WisdomTree Asset Management to be of comparable quality. Although these securities may offer the potential for higher yields, they generally are considered “highly speculative” and may be subject to higher potential risk. All money market securities acquired by the Fund will be rated in the upper two short-term ratings by at least two nationally recognized statistical rating organizations (“NRSROs”) or, if unrated, determined by WisdomTree Asset Management to be of equivalent quality.

The Fund also may invest in derivative instruments as a substitute for direct investments in debt instruments. A derivative instrument is a financial contract whose value depends upon, or is derived from, the value of an underlying asset, reference rate or index. For example, the Fund may invest in total return swaps, interest rate swaps, and currency swaps and forward currency contracts denominated in any currency. A total return swap is an agreement between two parties to exchange payments based on a reference asset, such as an index. In a typical total return swap a party makes a fixed payment and receives in exchange a variable payment based upon the total return of the reference asset. This allows the party to receive the returns of the reference asset without actually owning it. A typical interest rate swap involves the exchange of a floating interest rate payment for a fixed interest payment. A currency swap is an agreement between two parties to exchange one currency for another at a future rate. A forward currency contract is an agreement to buy or sell a specific currency at a future date at a price set at the time of the contract.

For the full prospectus click: HERE

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