(Boursier.com) — WisdomTree, a player in financial innovation on a global scale, launches the WisdomTree US Efficient Core UCITS ETF (NTSX) fund. The fund aims to track the price and yield before fees and expenses of the WisdomTree US Efficient Core UCITS Index. The total outstanding fees (TFE) of this ETF is 0.20%. Listed today on Börse Xetra and Borsa Italiana, NTSX will arrive on the London Stock Exchange on October 18, 2023.
The index is designed to provide 90% exposure to large cap US stocks, and 60% to US Treasury futures, providing a more capital efficient leveraged alternative to the portfolio 60 /40 traditional. This ETF is the first of its category in Europe.
The ETF invests 90% of its assets in a diversified basket of the 500 largest U.S. companies by market capitalization, which meet WisdomTree’s ESG (environmental, social and governance) criteria. To reinforce the benefits of this asset allocation, a 60% exposure to US Treasury futures is then layered on top of this, using the remaining 10% of the portfolio as cash collateral for the futures. . The futures portfolio consists of an equal-weighted basket of five U.S. Treasury futures contracts, with maturities ranging from two to thirty years. Exposures are rebalanced quarterly.
The strategy behind the WisdomTree US Efficient Core UCITS ETF is based on a variety of academic research as well as modern portfolio theory. Scholars have long argued that the optimal portfolio for a given level of risk is a leveraged version of the portfolio that has the best Sharpe ratio.
By using leverage on a traditional 60/40 portfolio, investors benefit from a similar level of volatility to an all-stock portfolio, while taking advantage of a better Sharpe ratio.
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