WisdomTree begun trading the WisdomTree Western Asset Unconstrained Bond Fund (Nasdaq: UBND) on Thursday, June 11, 2015.
Here is a synopsis of the new ETF:
FUND INFORMATION:
| Symbol: UBND | Exchange: Nasdaq |
| Name: WisdomTree Western Asset Unconstrained Bond Fund | Net Expense Ratio: 0.55% |
FUND OBJECTIVE:
The WisdomTree Western Asset Unconstrained Bond Fund seeks a high level of total return consisting of both income and capital appreciation. UBND is an actively managed ETF which seeks to provide a high level of total return and a lower level of risk through investments in fixed income assets around the world. The Fund intends to invest in Debt originating in the following regions/countries: North America, South America, Asia, Australia and New Zealand, Latin America, Europe, Africa and the Middle East.
KEY FEATURES:
1. Investment Flexibility: The Fund is not managed to a benchmark and is able to deploy capital across all fixed income strategies and sectors based on experience and valuations.
The Fund’s exposure to any single corporate issuer will generally be limited to 10% of the Fund’s total assets. The Fund’s exposure to any single sovereign issuer (other than the United States government) generally will be limited to 25% of the Fund’s total assets. The percentage of the Fund’s assets in a specific region, country or issuer will change from time to time. The Fund’s exposure to any one country generally will be limited to 30% of the Fund’s net assets, excluding U.S. exposure, though this percentage may change from time to time in response to economic events and changes to the respective credit ratings of the Debt in such country.
The universe of Debt includes securities that are rated “investment grade” as well as “non-investment grade” (junk bonds). The Fund may invest up to 20% of its net assets in securities other than Debt. The Fund may invest up to 35% of its net assets in derivatives and will not invest more than 20% of its nets assets in derivatives that are not Debt.
2. Bond-Like Volatility: The Fund targets 3.00% to 5.00% annualized volatility.
3. Emphasis on Value: The Fund permits a world-class investment manager to incorporate the best ideas for total returns into a single portfolio.
4. Disciplined Risk Management: Active management is focused on risk-adjusted returns supported by robust risk management infrastructure.
Fund Top Consituents (06/12/15):
| US Treasury Bond, 3.125%, 08/15/2044 | 16.72% |
| GSMS 2007-GG10 AM, 5.794683%, 8/10/2045 | 8.12% |
| Office Cherifien Des Pho, 4.5%, 10/22/2025 | 4.21% |
| Virgin Media Secured Fin, 5.375%, 04/15/2021 | 4.14% |
| Ally Financial Inc, 8.00%, 03/15/2020 | 3.13% |
| Mex Bonos Desarr Fix Rt, 10%, 12/5/2024 | 3.10% |
| HCA Inc, 5.00%, 03/15/2024 | 2.71% |
| Ford Motor Credit Co Llc, 8.125%, 01/15/2020 | 2.70% |
| Level 3 Financing Inc, 5.375%, 8/15/2022 | 2.69% |
| CIT Group Inc, 5.00%, 08/01/2023 | 2.65% |
Useful Links:
UBND Home Page
ETFtrack Comment:
Why to use an Unconstrained Bond ETF? As WisdomTree refers: ‘ …an unconstrained fixed income strategy allows an investment manager increased flexibility to generate total returns and manage risk compared to the constraints imposed by an index-based approach. Despite its name, unconstrained strategies are not undisciplined—our view is that a focus on risk is essential to management of these strategies. The specific level of risk that the manager targets is a primary differentiating factor among unconstrained strategies—some target bond-like volatility, while others are more opportunistic and target much higher levels of risk. Western Asset’s (sub-adviser) approach focuses on the less risky end of this spectrum by targeting a bond-like volatility of 3% to 5% per year. As a result, this approach can be used as a complement to or a substitute for a traditional core fixed income portfolio. An unconstrained approach to fixed income may help investors navigate today’s particularly difficult market
environment’.
Category: Bonds> Diversified Bonds> Global Diversified Bonds