Toronto-based WisdomTree Asset Management Canada Inc. is looking to enter the Canadian exchange-traded fund (ETF) market with eight ETFs. Some of those products will use a dynamic currency hedging strategy that will allow the funds to be hedged as needed in order to protect the funds’ returns.
The new ETF company is a subsidiary of New York-based Wisdom Tree Investments Inc., the sixth-largest ETF provider in the world, according to an ETF industry note released Wednesday by Montreal-based National Bank Financial Ltd. The U.S. firm announced in April that it would open an office in Canada.
WisdomTree has filed prospectus documents for eight ETFs, some of which include currency-hedged, non-hedged or dynamically-hedged versions, according to the note. Through WisdomTree’s dynamic currency hedging strategy, a currency hedge can vary depending on market conditions.
The firm aims to bring the following ETFs to the Canadian market:
> WisdomTree Emerging Markets Dividend Index ETF, which will include dividend-paying companies within the emerging markets;
> WisdomTree Europe Hedged Equity Index ETF, which will invest in European companies that have at least $1 billion in market capitalization and generate at least 50% of their revenue outside of Europe. Companies will be weighted based on annual cash dividends paid. The fund will hedge foreign currency risk;
> WisdomTree International Quality Dividend Growth Index ETF, which will hold 300 international companies with at least $1 billion in market capitalization and will be weighted based on annual cash dividends paid. The firm has filed a prospectus for unhedged, Canadian dollar (C$)-hedged and dynamically hedged versions of the ETF;
> WisdomTree U.S. Earnings 500 Index ETF, which will track a corresponding WisdomTree index consisting of the 500 largest companies in the firm’s earnings index that have generated positive cumulative earnings in the past four quarters. The fund will offer unhedged and C$-hedged units;
> WisdomTree U.S. High Dividend Index ETF, which will track corresponding WisdomTree indices that select U.S. companies from the firm’s dividend index universe and will be weighted by dividend. The firm filed a prospectus for unhedged, C$-hedged and dynamically hedged versions of the ETF;
> WisdomTree U.S. MidCap Dividend Index ETF, which will be based on mid-cap companies from the firm’s dividend index universe and will be weighted by dividend. The fund will offer an unhedged version and one that is hedged to the C$;
> WisdomTree U.S. Quality Dividend Growth Index ETF, which will hold 300 U.S. companies with at least $2 billion in market capitalization and will be weighted by dividend. The firm filed a prospectus for unhedged, C$-hedged and dynamically hedged versions of the ETF;
> WisdomTree U.S. SmallCap Dividend Index ETF, which will track the corresponding WisdomTree index, which selects small-cap companies from the firm’s dividend index universe and then weights them by dividend. The fund will offer unhedged and C$-hedged units.
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