WisdomTree U.S. Mid Cap Quality Gr’s management team is rated Average, but a solid investment process still helps this strategy retain its Morningstar Medalist Rating of Gold. The portfolio maintains a cost advantage over competitors, priced within the lowest fee quintile among peers.  

 The strategy's sensible investment philosophy merits a High Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained a significant overweight position in liquidity exposure and an underweight in momentum exposure compared with category peers. High liquidity exposure is attributed to stocks with a high trading volume, lending managers more flexibility. And low momentum exposure is rooted in holding stocks that are not currently on a winning streak and instead holding those that managers believe are undervalued. The strategy’s management team earns an Average People Pillar rating. The strategy's parent organization earns the firm a Below Average Parent Pillar rating. People Pillar and Parent Pillar ratings for this strategy are indirectly assigned by a Morningstar analyst rather than algorithmically derived. Please see the notes following each pillar section for more details. The details of assigning methods can be found in each pillar section.

Analyst Rating

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Dick's Sporting Goods

Toll Brothers

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Bio-Techne

Floor & Decor Holdings

TopBuild

Lincoln Electric Hlds

Morningstar's evaluation of this security's process aims to determine the likelihood that it will outperform its Morningstar Category benchmark on a risk-adjusted basis over the long term. WisdomTree U.S. MidCap Qual Gr Fd earns a High Process Pillar rating. 

The most significant contributor to the rating is that this fund tracks an index. Historical data, like Morningstar's Active/Passive Barometer, finds that passively managed funds have generally outperformed their active counterparts, especially over longer time horizons. The parent firm's excellent risk-adjusted performance, as shown by its average 10-year Morningstar Rating of 3.3 stars, also contributes to the process. The parent firm's five-year risk-adjusted success ratio of 54% reinforces the process. The measure indicates the percentage of a firm's funds that survived and outperformed their respective category's median Morningstar Risk-Adjusted Return for the period. Their commendable success ratio suggests that this firm does well for investors and that this fund may benefit from that.

 This strategy skews toward smaller, deeper value companies compared with its average peer in the Mid-Cap Growth Morningstar Category. Looking at additional factor exposure, this strategy has held more highly liquid stocks compared to Morningstar Category Peers in the past few years. More-liquid assets contribute to more-flexible exit strategies without price changes and tend to be a ballast during market selloffs. For example, if the portfolio faces successive redemptions in a short period of time, it will be less likely to suffer from a significant loss. In recent months, the strategy was more exposed to the Liquidity factor compared with its Morningstar Category peers as well. This strategy has had lower exposure to momentum stocks over peers in recent years. Momentum tends to be a powerful force in asset markets, as stocks that have done well recently usually continue to do so in the short term. As top performers change, this can sometimes be hard to capture without higher trading costs. Similarly, in recent months, the strategy also had less exposure to the Momentum factor than peers. During the last few years, this strategy has also tilted in favor of high-quality stocks, those that have demonstrated low financial leverage and solid return on equity. This means the fund holds consistently profitable, growing companies with solid balance sheets that may help it weather downturns better than Morningstar Category peers. In this month, the strategy also had more exposure to the Quality factor over its peers. More information on a fund and its respective category's factor exposure can be found in the Factor Profile module within the Portfolio section. 

 The portfolio is overweight in consumer cyclical and energy relative to the category average by 6.7 and 6.3 percentage points, respectively. The sectors with low exposure compared to category peers are technology and healthcare, underweight the average by 9.6 and 5.5 percentage points of assets, respectively. The strategy owns 125 securities and its assets are more dispersed than the typical peer in the category. In the most recent disclosure, 14.5% of the portfolio's assets were concentrated in the top 10 fund holdings, compared to the category’s 25.9% average.

High

Process

WisdomTree’s team is good but unexceptional, earning the strategy an Average People Pillar rating. There’s a sizable bench of five managers listed on the fund. Together, they manage a total of 114 strategies, with solid long-term prospects. The strategies average a Bronze asset-weighted Morningstar Medalist Rating, indicating a position to deliver positive alpha relative to the category median in aggregate.  

 Note: This People Pillar rating is indirectly assigned by an analyst. Morningstar analysts evaluate the People Pillar for passive products at the brand level and may also differentiate by asset class. There is at least one other passive strategy at the firm that is covered by a Morningstar analyst, so the People Pillar rating of the fund is inherited from the rating that the Morningstar analyst assigned to investment vehicles under the same brand name.

Average

People

WisdomTree is improving, but its shaky global fund lineup and uncertain trajectory hold its rating to Below Average. 

WisdomTree’s research organization has long been a strength. Under CIO Jeremy Schwartz, the team has generated creative, economically sound ideas and evolved them into investable products, like the efficient core series. A recent focus on investor education spawned the Portfolio Analysis Tools Hub, an online platform that taps the team’s brainpower to help investors make better investment decisions.

The firm’s product lineup is a mixed bag. To complement its core lineup of fundamentally weighted strategies, WisdomTree has recently launched funds targeting established factors instead of trendy themes—an encouraging reorientation. Yet the shutdown of WisdomTree U.S. Growth and Momentum ETF calls WisdomTree’s commitment to these funds into question, and vestiges from its laxer product-development era look ripe for closure. Its European lineup features risky trading tools that are hard for investors to use well. 

WisdomTree’s future may hinge on WisdomTree Prime, its blockchain-based digital wallet. The launch reflects founder and CEO Jonathan Steinberg’s conviction in the disruptive potential of the blockchain. Prime shouldn’t hurt WisdomTree fund investors (most funds on the platform are zero-fee), but it may distract the firm from shoring up its core offering.

Below Average

Parent

WisdomTree US MidCap Quality Growth Fund

QMID tracks a market cap-weighted index of US mid-cap growth companies that exhibit the strongest quality characteristics relative to their peers.

QMID is WisdomTree's newly-launched MidCap Quality Growth Fund. Fees are 0.38%, and QMID aims to provide mid-cap investors with consistent exposure to the quality and growth factors. Growth is measured by 80% historical three-year sales and earnings growth and 20% estimated one-year earnings growth, while quality is measured by three-year ROE and ROA. This article compares QMID with IJH and IJK, two S&P MidCap 400 and S&P MidCap 400 Growth ETFs. While QMID improves on growth, its quality advantage over IJK is unclear.

QMID: Meet WisdomTree's Brand New Mid-Cap Quality Growth ETF

WisdomTree US SmallCap Quality Growth Fund

By Matt Wagner, CFA, Associate Director, Research and Hyun Kang, Research Analyst Different selection processes among benchmarks can lead to vastly different portfolio holdings, as evidenced by the wide dispersion in returns this year across indexes with the same goals of tracking growth or value factors. Cumulative Year-to-Date Return Difference: S&P vs.

Introducing the WisdomTree U.S. MidCap and SmallCap Quality Growth Funds

WisdomTree US Quality Dividend Growth Fund

WisdomTree Bloomberg Floating Rate Treasury Fund

WisdomTree Investments has added two new ETFs to its roster. The firm launched two new quality growth ETFs on Thursday, adding to its existing suite, led by the WisdomTree Floating Rate Treasury Fund (USFR) and the WisdomTree U.S. Quality Dividend Growth Fund (DGRW) which each have more than $10 billion in AUM.

WisdomTree Launches 2 Quality Growth ETFs

WisdomTree Inc

NEW YORK--(BUSINESS WIRE)--WisdomTree, Inc. (NYSE: WT), a global financial innovator, announced today the launch of the U.S. MidCap Quality Growth Fund (QMID) and U.S. SmallCap Quality Growth Fund (QSML) on the NASDAQ. QMID and QSML seek to track the price and yield performance, before fees and expenses, of the WisdomTree U.S. MidCap Quality Growth Index1 and WisdomTree U.S. SmallCap Quality Growth Index2, respectively. Both funds have expense ratios of 0.38%. QMID and QSML aim to identify stoc.

News for WisdomTree US MidCap Quality Growth Fund ETF (QMID)