Exchange traded fund sponsor and asset manager WisdomTree has launched the WisdomTree Dynamic Long/Short US Equity Fund (DYLS) and WisdomTree Dynamic Bearish US Equity Fund (DYB) on the BATS Exchange.
DYLS offers a stock selection strategy designed to add alpha in the core long stock portfolio, while hedging market drawdowns with a dynamic hedge on the market. DYB also offers a stock selection strategy designed to add alpha in the core long stock portfolio, but is designed to provide “more bearish” net positioning. DYLS and DYB each have a net expense ratio of 0.48 per cent.
As markets have become more correlated and more volatile, non-traditional alternative investments have become an increasingly popular way to add return potential, while mitigating risk. But the majority of alternative investments typically require substantial investment minimums, have limited liquidity, have higher fees, are structured as partnerships that issue K-1s and are typically only available to institutional or high net worth investors.
Jeremy Schwartz (pictured), WisdomTree Director of Research, says, “Data shows that blending a long/short index with traditional equity and bond allocations has improved risk-adjusted returns.”
WisdomTree now offers smart alternative strategies in the ETF structure. These liquid alternative solutions follow rules-based passive indexes, are available to all investors, and provide daily liquidity, lower fees, transparency, and potentially more favourable tax treatment.
Schwartz says: “WisdomTree’s strategies challenge the traditional long/short and hedge fund community with systematic, liquid long/short index-based ETFs. DYLS and DYB are designed to generate alpha at the core through quantitative and fundamental stock selection – while also having the ability to hedge market risk dynamically.”
