WisdomTree expands its equity range with a new ETF

WisdomTree has launched today the WisdomTree US Quality Growth UCITS ETF (QGRW). It aims to replicate the price and performance evolution, before commissions and expenses, of the WisdomTree US Quality Growth UCITS Index and has a total expense ratio (TER) of 0.33%. The QGRW has started trading today on the Xetra Stock Exchange and the Italian Stock Exchange, and will do so on the London Stock Exchange on April 24, 2024.

The proprietary index is designed to follow the performance of large-cap US companies with strong quality characteristics (for example, high profitability) and growth that meet WisdomTree's ESG (Environmental, Social, and Governance) criteria.

Investment Approach

The WisdomTree approach aims to offer a greater participation in bullish markets and generate a positive excess return over a full market cycle. The growth factor aims to capture companies that have a growth in sales, realized profits, and expected profits, among which innovative companies and tech giants usually figure, allowing greater upside participation. The quality factor adds stability to a portfolio and helps filter out less profitable, highly speculative, and low-quality names. This combination positions the WisdomTree US Quality Growth UCITS ETF as a long-term strategic equity solution for investors seeking thoughtful exposure to the growth segment of the US equity market without sacrificing the quality of their portfolio.

European investors can now access the QGRW, which is a strategy that was already available in the United States, originally launched in 2022. WisdomTree US Quality Growth UCITS ETF will join WisdomTree's Quality Growth ETF range of $360 million.

With the WisdomTree US Quality Growth UCITS ETF, investors can continue to benefit from WisdomTree's systematic, transparent, and style-consistent investment process that is based on academic research.

Growth tends to attract innovative and growing companies, which translates into greater investment in tech giants, although historical returns suggest that investing in unfiltered growth stocks can be a losing game in the long run. Applying a quality filter to growth stocks can help ensure that the companies in the portfolio are healthy and can deliver results over time. High-quality growth stocks have historically outperformed pure growth investment to help investors withstand maximum drops without sacrificing the ability to participate in market rallies. The new ETF is an alternative to growth strategies like the Nasdaq 100, as it adopts a more comprehensive approach to portfolio construction, rather than focusing solely on the market capitalization of constituents or the stock exchange where they are listed.

Pierre Debru, Head of Quantitative Research & Multi Asset Solutions at WisdomTree

Since the foundation of WisdomTree, we have focused on launching differentiated and value-added investment solutions for our clients. At the heart of our equity philosophy is the conviction that quality stocks should be the cornerstone of every equity portfolio. They are vital for creating resilient portfolios that can help investors accumulate wealth in the long term and weather the inevitable storms that arise. We know that investors are positioning their portfolios to benefit from the upcoming rate cuts in the U.S., which are expected to be a positive catalyst for U.S. growth equities. But as we have seen in recent years, nothing is guaranteed in financial markets. Therefore, by focusing on quality rather than market capitalization, investors can benefit from a more robust approach than market cap-weighted growth funds, without sacrificing profitability in bull markets.

Alexis Marinof, Head of Europe at WisdomTree