WisdomTree has announced the launch of the WisdomTree Eurozone Efficient Core UCITS ETF (NTSZ). NTSZ seeks to track the price and yield performance, before fees and expenses, of the WisdomTree Eurozone Efficient Core UCITS Index (the “Index”) and has a Total Expense Ratio (TER) of 0.20 per cent.
NTSZ has listed on Euronext Paris, Börse Xetra, and Borsa Italiana, and will list on the London Stock Exchange.
The index is designed to deliver 90 per cent exposure to mid and large-cap Eurozone equities and 60 per cent exposure to Eurozone government bond futures, effectively providing a leveraged, more capital-efficient alternative to the traditional 60/40 portfolio.
The ETF invests 90 per cent of its assets in a diversified basket of mid and large-cap Eurozone companies. To help magnify the benefits of the asset allocation, a 60 per cent exposure to Eurozone government bond futures is then overlaid on top, using the remaining 10 per cent of the portfolio as cash collateral for the futures. The futures portfolio consists of Eurozone government bond futures contracts with maturities ranging from two to 30 years. The exposures are rebalanced quarterly.
The strategy behind WisdomTree’s Efficient Core ETF range is grounded in academia and based on modern portfolio theory. Academics have long argued that the optimal portfolio for a given level of risk is a leveraged version of the portfolio that presents the best Sharpe ratio. By leveraging a traditional 60/40 portfolio, investors can create space for diversifiers such as gold, commodities or private assets without having to reduce their exposure to equities and fixed income.
Pierre Debru, Head of Research, Europe, WisdomTree, says: “The newest addition to our Efficient Core UCITS ETF line-up reinforces our commitment to delivering innovative portfolio construction tools. Complementing the existing range, this strategy helps investors make the most of the capital they deploy. By combining equity market exposure with capital efficiency in a single ETF, it can act as a core equity replacement while freeing up capital for diversification or alternative investments. It’s a more innovative and flexible way to build long-term portfolios.”
The WisdomTree Eurozone Efficient Core UCITS ETF forms part of WisdomTree’s USD1.8 billion range of Efficient Core strategies. The ETF follows the launches of the WisdomTree US Efficient Core UCITS ETF (NTSX) and the WisdomTree Global Efficient Core UCITS ETF (NTSG), both of which have attracted strong client interest for their innovative approach.
Alexis Marinof, CEO, Europe WisdomTree, says: “Our mission is to deliver innovative solutions that add genuine value to investors’ portfolios. As an innovative ETF issuer, WisdomTree has a strong heritage of bringing strategies to market that solve real challenges and provide lasting benefits, whether enhancing efficiency, improving diversification, or offering new ways to capture long-term growth. Our focus is on intelligent innovation that helps investors build stronger, more resilient portfolios for the future and that’s exactly what the Efficient Core ETF range does.”
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