WisdomTree lists UK Equity Income UCITS ETF on the London Stock Exchange
Thursday 08th October '15
Hector McNeil, Co-CEO
- WisdomTree UK Equity Income UCITS ETF (WUKD) begins trading on the London Stock Exchange
- WUKD offers investors exposure to a subset of the UK’s highest dividend yielding stocks in a diversified basket of over 100 constituents
- WUKD tracks a dividend-weighted index, offering the potential for better risk-adjusted performance relative to traditional UK market cap-weighted benchmarks.
- The index follows an existing WisdomTree’s Equity Income methodology which has over nine years of track record in the US, with the UK index being launched for the first time
- At 29bps TER, WUKD is one of the most cost effective dividend focused ETFs available
London, 08 October 2015: WisdomTree, an exchange-traded fund (“ETF”) and exchange-traded product (“ETP”) sponsor, announced the listing of the WisdomTree UK Equity Income UCITS ETF (WUKD) on the London Stock Exchange today. WisdomTree UCITS ETFs are physical funds, and in the case of the UK equity income strategy fully replicates the index.
The WisdomTree UK Equity Income Index strategy is comprised of the highest 33% of UK domiciled companies, from the WisdomTree UK equity universe, ranked by dividend yield. The resulting constituents are used to construct a diversified basket of stocks, with a 3% single stock weighting cap, a 25% sector cap and a unique fundamental weighting strategy based on the absolute amount of dividends paid by the companies. The methodology helps to mitigate risk and focus on the larger dividend paying stocks. Academic research shows that indices weighted by dividends, or which include higher yielding companies, have tended to outperform market capitalisation indices over the long run.
Viktor Nossek, Director of Research at WisdomTree Europe had this to say:
"The WisdomTree UK Equity Income UCITS ETF provides for greater diversification than is typical in other UK income strategies. It has over 100 constituents and features a large cap bias with over 83% of the index comprised of stocks with market capitalisation greater than £10bn and close to 15% in mid-cap stocks. The capping of individual sector exposures at 25% creates a more balanced portfolio construction compared to other unconstrained strategies, providing risk control at different parts of the investment cycle. In addition, a historic dividend yield of 5.9% compares favourably to competing indices.”
Hector McNeil, Co-CEO of WisdomTree Europe commented on the launch:
“We are proud to be launching the WisdomTree UK Equity Income UCITS ETF. Our strategy uses the same methodology that underpins many WisdomTree ETFs and has helped the company grow to become the 5th largest ETF issuer in the US market and the 7th globally. Based on client demand for WisdomTree’s Equity Income methodology, this is the first ETF which WisdomTree Europe is launching dedicated to the UK market. WisdomTree’s methodology combines experience and track record, with a high yielding broad index – something which investors will find useful in today’s low interest rate environment”.
WisdomTree pioneered indices weighted by the Dividend Stream® - defined as the sum total of regular dividends paid in a particular index. Historically, dividends have provided a majority of the stock market’s real return over time and, unlike other factors, dividends are an objective measure which are not affected by accounting treatments. Dividends are a major factor in determining stock price and a useful measure in determining company profitability and value, rather than stock price alone. In today’s low-yield world, a dividend-weighted ETF may increase the portfolio’s trailing 12-month dividend yield and provide extra income. Each ETF seeks to distribute dividends on a quarterly basis.
Additionally, WisdomTree’s dividend indices offer a number of potential benefits: founded on experience and transparency, many of WisdomTree’s indices have live track records since 2006, broad exposure to companies in the index, and access to a different weighting methodology which brings potential diversification benefits to a portfolio when held alongside market cap-weighted assets, by potentially reducing risk, increasing returns, or both.
Notes to Editor
About WisdomTree Europe Ltd
WisdomTree Investments, Inc., through its subsidiaries in the U.S. and Europe, including WisdomTree Europe Ltd based in London, is an exchange-traded fund (“ETF”) and exchange-traded product (“ETP”) sponsor and asset manager. WisdomTree offers products covering equities, fixed income, currencies, commodities and alternative strategies. Through WisdomTree Europe Ltd, it sponsors WisdomTree UCITS ETFs and BOOST short and leverage ETPs. WisdomTree currently has approximately $53.9billion (as of 01 Oct 2015) in assets under management globally. For more information, please visit www.wisdomtree.com.
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