We continue our examination of various exchange-traded fund (ETF) providers today by taking a look at WisdomTree. WisdomTree entered the ETF market in 2006 and is currently the fifth-largest provider of ETFs, with 62 funds.
WisdomTree‚??s unique value to investors is that it offers an alternative method for weighting its funds. Many ETFs follow a market-capitalization strategy, i.e. the proportion that a fund holds of its various equities reflects the ratio of those equities to each other in the stock market.
Instead of weighting its investments that way, WisdomTree looks at fundamentals in constructing its funds. WisdomTree offers two proprietary weighting systems: the Earning Stream method and the Dividend stream method. The company‚??s analysts have taken note, as have we, that higher and more consistent dividends are an objective indication of companies that give higher returns.
Read more about WisdomTree’s approach to ETFs at Eagle Daily Investor.