AGGY Beat 98% of Its Respective Morningstar Category over a One-Year Period ...
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WisdomTree announced the one-year anniversary of the WisdomTree Barclays U.S. Aggregate Bond Enhanced Yield ETF (AGGY).1
AGGY Outperformed Popular Active and Passive Strategies
AGGY seeks to track the Barclays U.S. Aggregate Enhanced Yield Index2 which draws from the same universe of securities as the Barclays US Aggregate Index (Agg)3, but increases weights to higher yielding securities in an effort to boost income potential. This yield-enhanced methodology has not only outperformed the market cap-weighted Barclays Aggregate benchmark; its index performance has also beaten the largest actively managed total-return bond ETFs as well.
The Barclays U.S. Aggregate Enhanced Yield Index has returned 7.67% since fund inception and has delivered an additional 120 bps of return compared to the Barclays U.S. Aggregate Index as of 7/31/2016.4 View standardized performance for AGGY here.
“In the current low-interest rate environment, many have begun looking outside the Agg to boost income potential, by dipping into the more speculative sectors of the market. AGGY can provide investors with an opportunity to enhance income from within the investment grade market, while broadly maintaining the traditionally desirable risk characteristics of the Agg,” said Rick Harper, WisdomTree Head of Fixed Income and Currency.
Overweight in Credit and Underweight in Treasuries
In addition to outperforming the most popular market cap-weighted core strategies, AGGY has also beaten 98% of the funds in its respective Morningstar category over the one-year period that ended 7/31/2016. AGGY’s underlying exposures provide insight into the cause of this outperformance. By decreasing allocations to U.S. Treasuries at a time when they may offer little relative value and overweighting exposure to credit, AGGY has tapped into areas of the Agg that may have better risk/return attributes.
“Many investors overlook the potential in re-weighting the components of the Agg to create unique investment solutions. By taking a different approach, AGGY addresses the need for income enhancement while mitigating risk across a variety of market environments. In our view, AGGY can play a critical role within broad-based fixed income portfolios,” added Harper.
1 The Fund’s gross expense ratio of 0.20% and the net expense ratio of 0.12% reflect a contractual waiver of 0.08% through 12/31/16.
2 On August 24, 2016, Bloomberg announced the completion of the acquisition of the indexing business of Barclays and accordingly the Barclays indexes are being rebranded as the "Bloomberg Barclays" indexes.
3 Barclays U.S. Aggregate Index: Represents the investment-grade, U.S. dollar-denominated, fixed-rate taxable bond market, including Treasuries, government-related and corporate securities, as well as mortgage and asset backed securities.
4 Source: WisdomTree