WisdomTree has launched a new US large-cap equity ETF in Europe targeting companies exhibiting robust quality and growth characteristics.
Pierre Debru, Head of Quantitative Research & Multi Asset Solutions, WisdomTree.
The WisdomTree US Quality Growth UCITS ETF has been listed on London Stock Exchange in US dollars (QGRW LN) and pound sterling (QGRP LN) as well as on Deutsche Börse Xetra (QGRW GY) and Borsa Italiana (QGRW IM) in euros.
The fund implements a strategy that WisdomTree has provided to US investors since 2022 through its US-listed ‘Quality Growth’ ETFs. That suite, which consists of three funds targeting large, mid, and small-cap US equity segments, has $360 million in total assets.
Methodology
QGRW is linked to the proprietary WisdomTree US Quality Growth UCITS Index which ranks the 500 largest US-listed companies based on a composite score of two equally weighted fundamental factors: growth and quality.
The growth factor is determined by a company’s median analyst earnings growth forecast, its trailing five-year EBITDA growth, and its trailing five-year sales growth. The quality factor, meanwhile, is determined by a company’s trailing three-year average return on equity and trailing three-year average return on assets.
The 100 companies with the highest composite scores are selected and weighted by market capitalization.
By combining both quality and growth factors, WisdomTree aims to capture fast-growing companies that also boast solid fundamental qualities, effectively sidestepping overly speculative firms lacking in robust profitability. The approach is designed to serve as a strategic, long-term equity solution that may provide higher upside participation in bull markets and generate positive excess returns over a full market cycle.
Pierre Debru, Head of Quantitative Research & Multi Asset Solutions, WisdomTree, commented: “High-quality growth stocks have historically been better at helping investors withstand drawdowns than a pure growth allocation without sacrificing the ability to participate in market rebounds. Our newest ETF is an alternative to growth strategies such as the Nasdaq 100, as it takes a more holistic approach to portfolio construction instead of focusing solely on the market capitalization of constituents or their stock exchange listing.”
The fund comes with an expense ratio of 0.33%.