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With Q2 earnings season underway, it is worth noting that over the last year, WisdomTree...

With Q2 earnings season underway, it is worth noting that over the last year, WisdomTree earnings-weighted ETFs have outperformed cap-weighted peers by 7.5% (Smallcaps: EES vs. IJR), 5.5% (Midcaps: EZM vs. MDY) and 0.7% (Largecaps: EPS vs. SPY) respectively.
Comments (10)
  • Scootger
    , contributor
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    Its worth noting that no one has commented on this post.

     

    If you have to rely on buying Wisdom Tree funds to create outperformance, you have very little knowledge of investing and should run now while you still can. Example, EES traded 54 at the top of the market and 18 at the bottom, you got crused if you got in anywhere near the top.They IPO'd this fund at the top of the mkt as and added F-U to investors that fell for it. This particular ETF fund was created by wealthy giants of the industry to suck more capital out of unsuspecting retail investors. "No load" "Low fee's" "Liquidity" "Dividends" "5 Star Fund" what a joke. These ETF's essentially track the major indexes and use fancy names with market terminology just sophisticated enough to to dupe investors into feeling safe or that they have an edge. If anyone out there was invested in these funds at or near the top I would like to know if the fund manager gave you a call and told you to sell before the market cracked. No chance it happened. They also do not tell you that they take their fee's, where the investor cannot see, in trading commissions they pay themselves while trading your money in house. Having run a broker dealer, and executed millions of shares for mutual funds, that is where they take their gravy money. Little by little they take within the commission ceiling percentage rules created by FINRA and the SEC.

     

    If you do not have a long short manager watching your money you have no chance long term. I am a fan of liquidity, and do not want to retail investor running away, but I am sick and tired of the little guy being lied to right to his face. See Barron's Article this weekend about how Morningstar Ratings are useless, I love it. I've been waiting for someone to step up and blow the whistle. I am too. I'm tired of seeing blue collar people getting taken down. I am writing this hoping one person listens, does more reseach, learns more about the market, and makes better decisions, and does not buy something because it "outperformed the SPY last year".
    14 Jul 2010, 05:20 PM Reply Like
  • SA Editor Jonathan Liss
    , contributor
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    Scootger, If you like at the make-up of these WisdomTree funds, they are considerably different than standard cap-weighted indexes. If you bought any fund when the Dow was at 14,000, you're probably still down considerably right now. The fact remains these funds have outperformed their cap-weighted peers consistently - especially at the small and mid-cap level (the large caps have mirrored each other for some reason - maybe due to a greater overlap in holdings/weightings). Not sure why you think they are a scam? By offering investors a different weighting methodology, they offer an additional low-cost way to try and create alpha - rarely a bad thing far as I can tell.

     

    I do agree with you liquidity can be problematic but for long-term investors (who I think you're addressing), that shouldn't be too much of an issue and with $61M, $86M and $85M in assets under management respectively and WisdomTree very close to profitability, there's really no risk of these funds being closed.
    15 Jul 2010, 03:12 AM Reply Like
  • Scootger
    , contributor
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    These are long only strategies, they are useless in today's markets, the managers of these assets do not work on Thursday and Friday, they golf. They got lucky or used their tiny assets to drive up their illiquid NAV's last year in an up market, or simply repored a BS number and printed a NAV that looked good, no one is regulating their reports. How where their returns in 08, gross. Maybe go back and write your piece again including the returns for each fund lifespan instead of picking last year when everyone made moeny. Investors are waking up to the fact that they need to have a Long and Short strategy that provides outperformance in up and down markets, not investing in funds that work only for bull market baby managers. The long only mutual fund manager that gets paid to track and index is a dying breed, the investing community is onto the scam.How can a fund allow fresh capital on any given day, how does a manager of this fund calculate returns for his/her investors? I.E. If I invest on Jan 1 and the market is up the next 6 months, then another investor puts money in in July, how does the manager fold in the capital and give reports to investors correctly if they are constantly letting in fresh capital. I will tell you how, they make up the NAV's and reports and take money little by litte from unsuspecting investors. If the PM's of this fund were truly managing the capital in numerous equities they could not possibly let fresh capital in everyday. That is why long short hedge funds are the truth, only allowing investors to come in once a year and consistently ourperforming mutual funds. If you truly want to teach people where to invest write your next piece on long short strategy, but you can't you apparently get paid to pump Wisom Tree Funds to mom and pop.
    15 Jul 2010, 10:47 AM Reply Like
  • SA Editor Jonathan Liss
    , contributor
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    The WisdomTree funds mentioned here have only been around a few years but since they were launched, they have outperformed their respective cap-weighted ETFs. You can spin that anyway you want but it's the truth. No one is saying that a long/short strategy isn't wise in this market - ETFs are best used as building blocks of an overall portfolio strategy. For investors maybe looking to get a slight (or significant) edge over standard market cap-weighted funds on the long side of their portfolio, this gives them another way to try and achieve alpha. I'm not sure what your issue with that is exactly...
    15 Jul 2010, 02:15 PM Reply Like
  • Scootger
    , contributor
    Comments (228) | Send Message
     
    Your profile says you are an "occasional investor" and an "infrequent trader". Now I get it. You simply do not understand the difference between the ETF suck play and building a portfolio of great companies and shorting underperformers. You are falling into the same trap that most retail investors do, its right in front of your face but you do not see it. I cannot believe you have so many followers, congrats, I guess seekingalpha readers prefer to make investment desicions based on information you get from watching commercials for mutual funds. Overlay a chart of your EPS Wisdom TREE Earnings BS Fund andSPYyou are buying the SAME thing with less liquidity guy, yeah you are getting a 1.8% yield, but I can stick you in a John Hancock Tax Advantage Dividend fund HTY and take home a 12% yield if you want your money in a sleepy, illiquid, dividendpayer that will crater with the corrections. Best of luck with your career blowing people up.
    15 Jul 2010, 03:50 PM Reply Like
  • SA Editor Jonathan Liss
    , contributor
    Comments (472) | Send Message
     
    I am a long term buy and hold investor - thus an infrequent trader. You're focussing on EPS/SPY is convenient b/c it's the pair where the correlation is closest. In the case of smallcaps and midcaps the outperformance of the earnings weighted funds is significant. As a long term trader, liquidity probably means a lot less to me than it does to you. And no, I don't own any of these funds so I have no reason to push them one way or another...
    15 Jul 2010, 04:06 PM Reply Like
  • Scootger
    , contributor
    Comments (228) | Send Message
     
    If I could get any stock off I would have shorted a basket of Wisdom Tree Funds on your advice, but not enough retail investors are being sucked in to buy them, no upticks. Thanks for the look, keep the shorts coming please.
    16 Jul 2010, 09:52 PM Reply Like
  • PalmDesertRat
    , contributor
    Comments (2940) | Send Message
     
    bot some mdy this morning at 176.42
    23 Aug 2012, 09:38 AM Reply Like
  • PalmDesertRat
    , contributor
    Comments (2940) | Send Message
     
    took some mdy profits today at 185.103
    13 Sep 2012, 01:52 PM Reply Like
  • PalmDesertRat
    , contributor
    Comments (2940) | Send Message
     
    bot some mdy today at 175.04
    14 Nov 2012, 11:09 AM Reply Like
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