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What Is Modern Alpha™?

 

At WisdomTree, we believe investors shouldn’t have to choose between cost efficiency and performance potential. Modern Alpha™ combines the outperformance potential of active management with the benefits of passive management—to offer investors cost-effective funds that are built to perform.

 

The traditional active management, or “legacy alpha” can often carry higher cost, less transparency in your portfolio and the risk of human judgment. But it can also mean an outperformance potential. The traditional passive investing, or “legacy beta” usually offers lower cost, and more transparency and objectivity. But it doesn’t give investors the opportunity to potentially outperform the market. Modern Alpha™ combines the positives of each of the legacy investment approaches to enhance the investment experience.

 

 

*Ordinary brokerage commissions apply. Low cost represents lower expense ratio compared to higher priced investment options and ETFs.

 

In Their Own Words

 

Jonathan Steinberg 

CEO and President
WisdomTree Asset Management

Professor Jeremy Siegel

Senior Advisor
WisdomTree Asset Management

Michael Steinhardt

Chairman of the Board
WisdomTree Investments Inc.

Kurt MacAlpine

Global Head of Distribution
WisdomTree Asset Management

 

The Benefits of Modern Alpha™

 

In an environment where investors demand more value for their money, where regulations increasingly concern investors best interests, and where fee pressure is growing, ETFs offer a number of advantages including lower fees, zero investments minimums, greater transparency, and more. Of course, all ETFs are not created equal.

 

WisdomTree’s Modern Alpha™ ETFs offer additional advantages, including the potential for:


  • Enhanced portfolio returns
  • Increased dividend income
  • Reduced portfolio volatility and risk
  • More efficient exposure to risk premium

 

Our Modern Alpha™ family

 

Our Modern Alpha™ family of ETFs provides the potential to outperform in many ways.

 

Dividend-weighted ETFs magnify the effects dividends have on performance, providing the potential for more income, for strength during down markets, for enhanced returns and reduced risk, and for improved overall portfolio returns.


Discover our range of Dividend-weighted ETFs

Factor ETFs provide the potential to benefit from exposure to specific factors (risk premiums) that have been proven to drive returns. Factor ETFs can provide exposure to a single factor—such as quality— or provide exposure to value, size, quality, momentum and low volatility in a multi-factor approach.


Discover our Factor ETFs

Thematic ETFs provide the potential to benefit from only profitable companies (many ETFs invest in unprofitable companies) and to lower the P/E ratio for the given market, helping to manage valuation risk and magnify the effects that earnings have on risk and return characteristics.


Discover our Artificial Intelligence ETF

Currency-hedged ETFs provide the potential to reduce portfolio volatility and risk by hedging currency risk.

Discover our Currency Hedged Equity ETFs

Enhanced Commodities ETFs provide the potential to deliver alpha with lower volatility, using broad commodities within multi-asset portfolios as a means of balancing portfolio risks, especially relative to equity mandates.

Discover our Enhanced Commodities ETFs

Fixed income ETFs provide the potential to enhance yields, to reduce risk and to capitalise on local currency debt as well as the ability to manage risk, and more.

Discover our range of Fixed Income ETFs

Alternative ETFs enable investors to access sophisticated institutional strategies in the ETF format, providing the potential for enhanced risk-adjusted returns compared to a specific benchmark or a similar covered call strategy.

Discover our Alternative PutWrite ETF

 

The rules of Modern Alpha™

 

At WisdomTree, we believe in following rules—just not those set by others. We make our own rules and develop both our own Indices and our own ETFs. But we do not innovate simply for innovation’s sake. For example, when considering whether to develop a new investment, we always ask three questions:

 

1

Is it a truly distinct investment? Because we believe in developing investments that stand out from the crowd.

2

Does the strategy add value? Because we want to offer unique access, a distinct way to reduce risk or a better way to achieve a goal.

3

Are we adding value through structure? Because we want people to be able to access sophisticated strategies with all the advantages of ETFs.

If the answer to at least two of these criteria is not yes, we will not pursue the investment idea.