WisdomTree to Launch 4 Funds Tied to Jeremy Siegel's Insights

WisdomTree filed preliminary prospectuses last week for four new funds that aim to build on insights from economist Jeremy Siegel, a Wharton School emeritus finance professor and WisdomTree consultant.

The funds are “blockchain-enabled” but won’t invest in assets, such as cryptocurrencies, that rely on blockchain technology.

The WisdomTree Siegel Global Equity Digital Fund, a passive index fund, seeks to track the performance, before fees and expenses, of the WisdomTree Siegel Global Equity Index, which comprises a diversified portfolio of U.S. and international equity ETFs and investments.

Typically, at least 80% of that fund’s assets will be invested in the index’s component securities. The index, in seeking relative market outperformance, focuses on including underlying funds that exhibit higher dividend yields, according to the Jan. 19 filing from WisdomTree Digital Trust.

WisdomTree maintains the index, which is governed by a “published, rules-based methodology” with a WisdomTree index committee. The committee will “leverage insights” from Siegel and has the authority to select and replace underlying funds within the parameters of the index methodology, the filing says.

WisdomTree Digital Trust registered six other digital funds the same day, including the WisdomTree Siegel Longevity Digital Fund, the WisdomTree Siegel High Income Digital Fund and the WisdomTree Siegel Moderate Digital Fund. The moderate portfolio is designed to correspond to a traditional 60% stock/40% bond allocation.

The prospectuses indicate the funds will have no service or shareholder fees. The minimum initial purchase is $25.

Per the prospectus, investors may set up an account with WisdomTree Digital or affiliate WisdomTree Securities through a mobile app, WisdomTree Prime, for which the firm currently has a waitlist.

A WisdomTree spokesperson, citing a quiet period, said through email Monday that the company couldn’t comment on the new funds beyond the filings. The asset manager already has 10 digital funds effective with the SEC.

In a December blog post, a WisdomTree executive wrote that “digital funds are open-ended and registered products under the 1940-Act — like traditional mutual funds. A transfer agent keeps the primary record of share ownership for the funds in its own books-and-records, but, unlike traditional mutual funds, the transfer agent also keeps a secondary record of the shares on either the Stellar or Ethereum blockchains.” 

Prospectus wording indicates the secondary recording of shares on the blockchain “will not affect the fund’s investments in securities. The fund will not directly or indirectly invest in any assets that rely on blockchain technology, such as cryptocurrencies.”

Investors’ ability to move shares between blockchains may provide benefits, “such as transaction speed or efficiency, while also helping facilitate the fund’s shares being available for purchase, sale or transfer in the broader blockchain ecosystem,” according to the prospectuses.

Jeffrey Ptak, chief ratings officer for Morningstar Research Services, tweeted about the new offerings last week, saying, “It appears to be a rules-based index so not totally getting how they’ll leverage Siegel’s insights. But I’m probably missing something.”

In a December tweet, WisdomTree noted that it sought to improve on the traditional 60/40 investment portfolio by introducing Siegel-WisdomTree Model Portfolios three years ago.

Image: Bloomberg