WisdomTree ETF

Pros and cons of WisdomTree ETF

WisdomTree ETF started out in the ETF business in 2006 with some 20 ETF’s they provided to their American customers. Today WisdomTree ETF has grown to one of the leading ETF providers being the 7th on the US market and number 10 on a worldwide scale. But what are the pros and cons of WisdomTree as an ETF creator for you as an individual ETF investor?

Pros of WisdomTree ETF

WisdomTree may be considered as an innovative and niche ETF provider as it brings some new approaches to the ETF market, especially catered to a customer base that does not want to follow the crowd.

Fine choice of regional ETF’s

WisdomTree offers many regional ETF’s covering regions and countries. For instance you will find specific ETF’s aimed at countries like Ireland, India and the Eurozone. On the website of WisdomTree ETF you can pick your favorite region and see which ETF’s are available in that region or country.

Dividend weighted ETF’s

This calls for some explanation. Instead of other ETF providers WisdomTree has opted for a different approach in weighing its assets. Generally speaking equities are weighted at market value of the company. At WisdomTree they decided that dividends were a more appropriate way of measuring the relative importance of a company’s worth.

By looking at dividends WisdomTree uses a more fundamental way of looking at stocks. Of course this can have a great difference in the composition of an ETF. I must say that I like this approach. The most interesting thing about it is that WisdomTree offers a different flavor to the existing offerings of ETF’s from competitors.

Leveraged ETF’s by WisdomTree

With the Boost ETP’s of WisdomTree an individual investor may add some leverage to an ETF. If this is a wise way of investing in ETF’s is depended on the individual needs of investor. Of course a Boost ETF may tend to approach the world of futures with a distinction that such an ETF is composed just like other ETF’s.

Great website with all information included

WisdomTree has one of the best websites covering its ETF’s. It gives full information on all ETF’s listed and you can easily search among sectors and regions. Maybe the best ETF provider website in the world……

Most ETF’s are physically backed

WisdomTree mainly offers physical ETF’s which is a big plus. It makes their ETF’s transparent and risk evasive.

Cons of WisdomTree ETF

Are there any weaknesses WisdomTree brings to the international ETF market?

WisdomTree dividends based ETF’s react differently

As WisdomTree is dividend orientated in equity ETF’s this means that a basket of WisdomTree ETF’s react differently than market capita ETF’s do. This is not a real weakness of WisdomTree but you will have to keep it in mind.

Using its own WisdomTree indices

WisdomTree offers many ETF’s based upon their own indices. This may be a bit tricky for investors as not all these indices are well-known or can be gauged. When an ETF is tracking a well-known index like the S&P 500 you just may look at this index and you know how your ETF will behave. At WisdomTree you really have to look at your particular ETF and benchmarking it is more difficult.

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