WisdomTree US Shrt-Term Corp Bd’s management team is just 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 least expensive fee quintile among peers.  

 The strategy's investment process inspires confidence and earns it a High Process Pillar rating. The team managing the passive strategy earns the strategy an Average People Pillar rating. The strategy's parent organization still has a way to go to reach the industry standard, evidenced by unsubstantial personal investments from portfolio managers and a bench of limited-tenure portfolio managers. As a result, the firm obtains a Below Average Parent Pillar rating.

Analyst Rating

Morningstar's evaluation of this fund's process seeks to determine how repeatable, consistent, and reliable it is, and whether management maintains a competitive advantage. WisdomTree US Shrt-Term Corp Bd Fd earns a High Process Pillar rating.   The leading factor in the rating is that this fund tracks an index. Historical data, such as Morningstar's Active/Passive Barometer, finds that passively managed funds have generally outperformed their active counterparts, especially over longer time horizons. Excellent risk-adjusted performance also influences the rating. This can be seen in the fund's five-year alpha calculated relative to the category index, which suggests that the managers have shown skill in their allocation of risk. The parent firm's five-year risk-adjusted success ratio of 61% contributes to 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 impressive success ratio suggests that this firm does well for investors and that this fund may benefit from that.

 The investment strategy as stated in the fund's prospectus is as follows: 


The investment seeks to track the price and yield performance, before fees and expenses, of the WisdomTree U.S. Short-term Corporate Bond Index.  Under normal circumstances, and at least 80% of the fund's total assets will be invested in component securities of the index and investments that have economic characteristics that are substantially identical to the economic characteristics of such component securities. The index is designed to capture the performance of selected issuers in the short-term U.S. investment grade corporate bond market that are deemed to have favorable fundamental and income characteristics. It is non-diversified.

 This strategy's 12-month yield is 3.1%, which is near its average peer. It also has a 5.2% 30-day SEC yield (a measure similar to yield-to-maturity).

High

Process

WisdomTree’s  team is comparable to peers, resulting in an Average People Pillar rating. There are two managers listed on the fund: Anil Katarya, Travis King. Experience on the team is abundant, with 16 years of average portfolio management experience. Together, they manage a total of four strategies, with a Bronze asset-weighted average Morningstar Medalist Rating, indicating the potential 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 an exchange-traded fund provider whose proprietary indexes underpin many of its funds. After the firm's core lineup of fundamentally weighted funds lost its luster in a difficult value environment, WisdomTree faces an identity crisis.

WisdomTree has plugged the holes in its value-oriented lineup with trendy thematic funds. Offerings that aim to capitalize on hot topics like cloud computing and genetic advancement fall outside the firm's realm of expertise and look like Band-Aids to curb outflows, not well-vetted long-term investments. Predictably, this point-and-shoot product-development approach had led WisdomTree to shut down funds at a lofty rate.

Bucking an industrywide, investor-friendly trend, WisdomTree has modestly trimmed fees on just a handful of funds. Such stubbornness calls into question whether the publicly traded firm prioritizes fundholders' or shareholders' interests. Recent inflows have helped, but severe outflows over the late 2010s have weakened the firm's financial position over the past several years.

The firm's research organization remains a highlight. Despite scattershot product launches, the team has demonstrated the ability to also hatch economically sound ideas and develop them into practicable products, like its funds that mechanically exclude state-owned enterprises. 

WisdomTree's commitment to investor education is another plus. Its Advisor Solutions platform, launched in 2016, provides advisors with a wealth of resources, and recent partnerships with Onramp Invest and Gemini should help advisors navigate cryptocurrency complexity. WisdomTree can read its clients' needs, but its trendy fund lineup shows that it's too willing to cater to their wants. It retains its Below Average rating.

Below Average

Parent

WisdomTree US Short Term Corporate Bond Fund

SFIG tracks an index composed of investment grade, short-term, US bonds. Constituents are selected and weighted by fundamental company and bond risk characteristics.

Amid speculation that the Federal Reserve is at or nearing the end of its interest rate tightening cycle and that the central bank could prove successful in engineering a soft landing for the U.S. economy, there's optimism that high-yield corporate bonds are poised for upside.

SFIG: Prime Idea for Corporate Bond Exposure

WisdomTree Barclays Yield Enhanced U.S. Short-Term Aggregate Bond Fund

While the recent January jobs report brings hope that the U.S. economy could stave off a potential recession in 2023, it also breeds worry that interest rates could stay elevated for longer than the capital markets expect. As such, investors will need a short-term rate strategy in their bond portfolio.

Shield Against Rate Fluctuations With This Short-Term Bond ETF

WisdomTree Bloomberg Floating Rate Treasury Fund

Interest rates currently sit at a target range between 2.25%-2.50% after the latest 75 basis point rate high by the Federal Reserve this week. The increase comes in response to June's unexpected 9.1% CPI as the Fed remains committed to its fight against inflation.

While the Fed Continues to Hike Rates, Expect Bond Market Volatility

Advisors are quickly discovering that traditional fixed income strategies just aren't cutting it, particularly with significant exposure to long-dated Treasuries. WisdomTree's U.S. Conservative Growth Model Portfolio is an option for higher quality income with equity exposure.

News for WisdomTree US Short Term Corporate Bond Fund ETF (SFIG)