WisdomTree will begin trading its new “WisdomTree Managed Futures Strategy Fund” (NYSE:WDTI) Wednesday, January 5th. The The WisdomTree Managed Futures StrategyFund seeks to achieve positive total returns in rising or falling markets that are not directly correlated to broad market equity or fixed income returns. The Fund is managed using a quantitative, rules-based strategy designed to provide returns that correspond to the performance of the Diversified Trends Indicator™ (“DTI Index” or “Benchmark”). The Fund intends to invest in a combination of U.S. treasury futures, currency futures, non-deliverable currency forwards, commodity futures, commodity swaps, U.S. government and money market securities. The Benchmark is a widely-used indicator designed to capture the economic benefit derived from rising or declining price trends in the markets for commodity, currency and U.S. treasury futures.
Expense Ratio: 0.95%
The Fund’s Investment Strategy
The Fund seeks to achieve positive total returns in rising or falling markets that are not directly correlated to broad market equity or fixed income returns. The Fund is managed using a quantitative, rules-based strategy designed to provide returns that correspond to the performance of the Diversified Trends IndicatorTM (the “Benchmark”). The Benchmark is a widely-used indicator designed to capture the economic benefit derived from rising or declining price trends in the commodity, currency and fixed income futures markets.
The Fund invests substantially all of its assets in a combination of commodity and currency- linked investments and fixed income securities designed to correspond to the performance of the Benchmark. The Fund’s commodity- and currency -linked investments generally are limited to investments in listed futures contracts, forward currency contracts and swap transactions that provide exposure to commodities and non-U.S. currencies. The Fund may also invest in structured notes. The Fund does not invest directly in physical commodities. The Fund achieves fixed income exposure through investment in U.S. Treasury securities and listed futures contracts on Treasury securities. The Fund attempts to capture the economic benefit derived from rising and declining trends based on the “moving average” price changes of commodities, currencies and fixed income futures contracts over a recent period. In an attempt to capture these trends, the Fund’s investments are positioned as “long” or “short” (with one exception). To be “long” means to hold or be exposed to a security or instrument with the expectation that its value will increase over time. To be “short” means to sell or be exposed to a security or instrument with the expectation that it will fall in value. The Fund will benefit if it has a long position in a security or instrument that increases in value or a short position in a security or instrument that decreases in value. Conversely, the Fund will be adversely impacted if it holds a long position in a security or instrument that declines in value and a short position in a security or instrument that increases in value. The energy sector is either long or flat; it is never short. When the energy sector is flat, the Fund will allocate a higher percentage of its investments to other sectors within the Benchmark. Although the Fund seeks returns comparable to the returns of the Benchmark, the Fund may be over-weight or under-weight its exposure to any sector or component within the Benchmark. The Fund will not hold more than 25% of its assets in any one industry. For these purposes, the components of the Benchmark (e.g., gold, natural gas) will be considered as separate industries. Neither the Fund nor the Benchmark is leveraged.
The Fund seeks to gain exposure to the commodity and currency markets, in whole or in part, through investments in one or more subsidiaries organized in the Cayman Islands (each, a “WisdomTree Subsidiary”). The Fund will invest in more than one subsidiary only if it receives a private letter ruling from the Internal Revenue Service concluding that the investment in multiple subsidiaries permits the Fund to satisfy the regulated investment company diversification requirements. Each Subsidiary is wholly-owned and controlled by the Fund. The Fund’s investment in each subsidiary may not exceed 25% of the Fund’s total assets at the end of each fiscal quarter. The Fund’s investment in each Subsidiary is expected to provide the Fund with exposure to commodity returns within the limits of the federal tax requirements applicable to the Fund and other investment companies. Unlike the Fund, each Subsidiary may invest without limitation in commodity- and currency-linked derivatives. Each Subsidiary is otherwise subject to the same general investment policies and restrictions as the Fund and, in particular, the same requirements with respect to leverage, liquidity and valuation. Except as noted, references to the investment strategies of the Fund should be understood as references to the investment strategies of each Subsidiary.
For the full prospectus: HERE
