WisdomTree launched two multi-asset, open architecture model portfolios designed to challenge the traditional 60/40 portfolio approach.
The new Siegel-WisdomTree Global Equity Model Portfolio and Siegel-WisdomTree Longevity Model Portfolio were developed in a collaboration between the firm and Professor Jeremy Siegel, its senior investment strategy advisor, professor of finance at The Wharton School at the University of Pennsylvania and author of Stocks for the Long Run.
The firm was looking for a way to “help investors and advisors solve some significant challenges in the market,” Tom Skrobe, WisdomTree head of product solutions, told ThinkAdvisor at TD Ameritrade’s National LINC 2020 conference in Orlando, Florida, last week. For one thing, it will help advisors “deliver a solution [so] that their clients could generate income in retirement, [and] also manage their longevity risk because people are living longer and will need their assets…for longer periods of time than they have in the past,” he said.
The portfolios are “heavily allocated to equities … in seeking to mitigate the longevity shor-fall risk,” and feature an all-exchange-traded fund portfolio structure that WisdomTree said helps to “optimize tax-efficiency.”
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The total net expense ratio is 0.29% for the Siegel-WisdomTree Global Equity Model Portfolio and 0.25% for the Siegel-WisdomTree Longevity Model Portfolio.
Although the Longevity Model Portfolio is strategic in nature, the firm said it also “reflects tactical tilts based on market conditions” and may include WisdomTree and non-Wisdom Tree ETFs at any given time. Currently, the portfolio includes mostly WisdomTree funds but also features the Vanguard High Dividend Yield ETF (0.06% net expense ratio), Vanguard International High Dividend Yield ETF (0.32%) and Hartford Multifactor Developed Markets ETF (0.29%). It is “not a static model,” Siegel told ThinkAdvisor. “If one asset class suddenly does not look favorable for one reason or another, we will reduce that asset allocation.”
The new model portfolios were made available first to advisors via the Model Market Center on the TD Ameritrade Institutional platform.
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