WisdomTree DEFA Fund (DWM)

All Comments on DWM

  • commenter
    David
    Jackson
    Dec 14 11:26 AM
    My Website
    Interview: Luciano Siracusano, Director of Research for ETF Firm WisdomTree Asset Management [view article]
    Thanks Luciano!

    On the case for dividend stocks, do you think the case for them is statistical, or also theoretical -- ie. that dividend stocks *should* perform better, not just *have* performed better?     Reply
  • commenter
    Luciano
    Siracusano
    Dec 14 10:47 AM
    Interview: Luciano Siracusano, Director of Research for ETF Firm WisdomTree Asset Management [view article]
    Thanks for the questions, David.

    I disagree that the case for dividend-paying stocks is “weak,” as you put it. First, let me just say that WisdomTree’s approach is not based on a moment in time, or what is happening this week or even this year. It is based on research spanning many decades. However, if you want to limit this discussion to 2006, if you look at today’s Wall Street Journal in the Money & Investing section and turn to Lipper’s stock fund indexes, you will see that the “Equity Income Fund” category is the best performing domestic fund category this year, up 17.65%. So, I believe you can make the opposite case: that dividend-paying stocks in 2006 have actually shown relative strength compared to the rest of the U.S. market.

    With respect to your question on expense ratios, I have an answer for you. But I need to step out into a meeting now and will be returning at around 1:00 est. I will answer it then and continue answering your questions throughout the day.     Reply
  • commenter
    Luciano
    Siracusano
    Dec 14 10:05 AM
    Interview: Luciano Siracusano, Director of Research for ETF Firm WisdomTree Asset Management [view article]
    complicated question. let me come back to it. Reply
  • commenter
    Luciano
    Siracusano
    Dec 14 10:04 AM
    Interview: Luciano Siracusano, Director of Research for ETF Firm WisdomTree Asset Management [view article]
    Yiqing, you are correct that Morningstar characterizes this fund that way. It is also true that Morningstar lists the average market cap for DLS as of October 31, 2006 as $1.4 billion. So I think a lot of this discussion revolves around how we define “smallcap.” Definitions of what is considered smallcap vary by portfolio manager and by where we are in the market cycle. For example, if you check the top 20 holdings in both the Russell 2000 and the S&P 600 indexes, two domestic smallcap indexes, you will see that the great majority of their top 20 holdings have market capitalizations between $2 billion and $3 billion. So I think definitions of smallcap are more accurately tied to what percentage of the overall market the so-called “smallcap segment” represents. I believe if you check Morningstar’s website they actually do it this way: Morningstar defines the top 70% of the market capitalization of an equity universe as “largecap”; the next 20% is considered “midcap”; and the remaining segment, typically under 10%, is characterized as “smallcap.” If you use those parameters Morningstar has established for the domestic US market and apply them to international markets, I believe you will see that is roughly where the WisdomTree International LargeCap Dividend Index, WisdomTree International Midcap Dividend Index and WisdomTree International Smallcap Dividend Index break out by market capitalization. They are cut once a year based on defined parameters designed to capture market cap size segments from the WisdomTree DIEFA index, which today covers approximately $16.5 trillion in international market capitalization across 21 developed world equity markets. Reply
  • commenter
    Luciano
    Siracusano
    Dec 14 09:46 AM
    Interview: Luciano Siracusano, Director of Research for ETF Firm WisdomTree Asset Management [view article]
    You are right I can’t comment on WisdomTree funds that are currently in registration, nor on any related indexes. Reply
  • commenter
    Luciano
    Siracusano
    Dec 14 09:44 AM
    Interview: Luciano Siracusano, Director of Research for ETF Firm WisdomTree Asset Management [view article]
    abbi, let me think about this a little more and come back to you later.
    thanks,
    Luciano     Reply
  • commenter
    Luciano
    Siracusano
    Dec 14 09:43 AM
    Interview: Luciano Siracusano, Director of Research for ETF Firm WisdomTree Asset Management [view article]
    With respect to your second question:

    It is true that WisdomTree competes against some of the greatest names in asset management today. However, in our view, WisdomTree has a number of unique competitive advantages. We believe WisdomTree’s proprietary research has produced an innovative product strategy. We were first to market with a family of fundamentally weighted ETFs and expect to continue to grow as market awareness of WisdomTree grows. Early customer response seems to show significant interest in our approach and we are encouraged that our ETFs have attracted $1.3 billion in assets under management in just 6 months. Additionally, we have an experienced management team; in fact, a number of our senior people came from Barclays.     Reply
  • commenter
    Luciano
    Siracusano
    Dec 14 09:29 AM
    Interview: Luciano Siracusano, Director of Research for ETF Firm WisdomTree Asset Management [view article]
    Well, I think there may be one too many cap-weighted ETFs. (:

    Seriously though, I am curious if the same people who say that having 300 ETFs are “too many” say the same thing about having 8,000 mutual funds or 10,000 hedge funds. Honestly, I think the best way to answer this is “compared to what?” Actively managed mutual funds, on average, have higher fees than ETFs, are less liquid, are less transparent, and are less tax efficient. Yet there are more than 8,000 of them. I think some may be thinking about this issue backwards. What do you guys think?     Reply
  • commenter
    Luciano
    Siracusano
    Dec 14 09:21 AM
    Interview: Luciano Siracusano, Director of Research for ETF Firm WisdomTree Asset Management [view article]
    WisdomTree differs from some of the other ETF managers in that it offers dividend-based ETFs that cover major market capitalizations across large regions of the developed world. WisdomTree indexes are typically weighted based on the cash dividends companies pay, so larger companies tend to get larger weights in the WisdomTree indexes. We call this weighting by the “Dividend Stream.” The other ETFs you’ve mentioned are typically based on specialty dividend indexes of 50 or 100 stocks. DVY and PEY, because of the selection and weighting methodologies of their underlying indexes, have considerable mid-cap biases. The Dow Jones dividend index is weighted based on dividend per share. The Mergent Dividend Achievers Index, which PEY is designed to track, is weighted based on dividend yield. This results in very different portfolios compared to weighting by the Dividend Stream. WisdomTree created two domestic indexes that select stocks with high dividend yields. But these two indexes, and the ETFs that are designed to track them – DTN and DHS – have much greater exposure to large-cap stocks. I think that is an important distinction. Reply
  • commenter
    Luciano
    Siracusano
    Dec 14 09:15 AM
    Interview: Luciano Siracusano, Director of Research for ETF Firm WisdomTree Asset Management [view article]
    Hi everyone. Before I begin answering some of your individual questions, let me just thank Seeking Alpha for this opportunity to interact with you today. I hope to answer as many questions as I can in the time we have. Let me begin with this first question. Reply
  • commenter
    Richard Shaw
    Dec 14 08:21 AM
    My Website
    Interview: Luciano Siracusano, Director of Research for ETF Firm WisdomTree Asset Management [view article]
    Luciano:

    Your website says: "The Index measures the performance of US companies, listed on the NYSE, AMEX or NASDAQ Global Market, that pay regular cash dividends and that meet other liquidity and capitalization requirements established by WisdomTree."

    Would please expand on "other liquidity and capitalization requirments"

    Thank you.

    Richard Shaw     Reply
  • commenter
    Richard Shaw
    Dec 14 08:16 AM
    My Website
    Interview: Luciano Siracusano, Director of Research for ETF Firm WisdomTree Asset Management [view article]
    Luciano:

    What are the separate roles of Wisdom Tree (advisor) and Bank of New York (sub-advisor) in maintaining the index going forward, selecting securities for the funds, daily monitoring and trading, etc? What is the experience of the key staff working on the funds at both Wisdom Tree and Bank of New York?

    Thank you.

    Richard Shaw     Reply
  • commenter
    Niki
    Hermanson
    Dec 13 06:49 PM
    Interview: Luciano Siracusano, Director of Research for ETF Firm WisdomTree Asset Management [view article]
    Hi Luciano!

    I am a long term investor. What would you say is the added value of the WisdomTree small cap ETF over a low cost small cap value oriented fund?

    Many thanks,
    Niki Hermanson     Reply
  • commenter
    undercover
    Dec 13 02:51 PM
    Interview: Luciano Siracusano, Director of Research for ETF Firm WisdomTree Asset Management [view article]
    Hi Luciano,

    Going in an entirely different direction than the others, I want to talk about WisdomTree stock as an investment in and of itself. I look at your company as comparable to a biotech company with great drugs in the pipeline, drugs which had billion dollar market potential. I use this analogy because I believe the ETF industry is just in it's infancy, and I see billions if not trillions of dollars being moved from mutual and hedge funds into ETF's. My question is do you think my analogy has some merit?     Reply
  • commenter
    Brett
    Steenbarger
    Dec 13 11:55 AM
    My Website
    Interview: Luciano Siracusano, Director of Research for ETF Firm WisdomTree Asset Management [view article]
    Hello Luciano,

    I want to thank you and the Seeking Alpha team for the creation of a conversation between traders and industry leaders. I very much hope this is the first in a series of such forums.

    My question builds on Roger Nusbaum's excellent query about international bond ETFs. There is a huge gap at present between those who trade positions (active retail and prop traders) and those who trade portfolios (hedge fund and bank traders; money managers). With the expanding universe of ETFs, I believe this gap will narrow and we will start to see individual traders becoming their own portfolio managers.

    What education do you engage in and what education do you foresee in the near future to help the active trading world take advantage of what is literally a universe of trading possibilities, such as those mentioned by Roger?

    Thanks again,

    Brett Steenbarger     Reply
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