WisdomTree US Corporate Bond’s management team is rated Average, but a solid investment process still helps this strategy retain its Morningstar Medalist Rating of Bronze. The portfolio maintains a sizable cost advantage over competitors, priced within the cheapest fee quintile among peers.  

 The strategy's effective investment philosophy supports an Above Average Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained a significant overweight position in corporate bonds and A rated bonds compared with category peers. 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

Morningstar's evaluation of this fund's process aims to determine how repeatable, consistent, and reliable it is, and whether management maintains a competitive advantage. WisdomTree US Corp Bd Fund earns an Above Average Process Pillar rating.    The predominant contributor to the rating is its parent firm's excellent long-term risk-adjusted performance, as shown by the firm's average 10-year Morningstar Rating of 3.4 stars. This fund tracks an index, which also increases its process rating. Historical data, like Morningstar's Active/Passive Barometer, shows that passively managed funds have generally outperformed their active counterparts, especially over longer time horizons. Lastly, the process is limited by the instability of talent across its parent firm. The firm's asset-weighted manager tenure of three years suggests it could do more to retain portfolio managers.

 Compared with other funds in the Corporate Bond Morningstar Category, this fund takes on lower credit risk. But in terms of long-term interest-rate sensitivity, it hews closely to its average peer over the past few years. Opening the analysis to additional factors, the portfolio has displayed biases over time, whether towards or away from certain fixed-income instruments. Compared with the average strategy in the category, the managers have been substantially overweight corporate bonds in recent years. In the latest month, the strategy has relatively overweighted corporate bonds compared with its peers as well. Additionally, there's been a notable overweight bias towards A rated bonds over the past few years. Compared with category peers, the strategy had more exposure to A rated bonds in the most recent month. Finally, during the past few years, the fund leaned meaningfully towards debt with one- to three-year maturities. In this month, the strategy also leaned more towards debt with one- to three-year maturities compared with its peers.

 This strategy has a 4.4% 12-month yield, higher than its average peer's 4.2%. In addition, it has a 5.1% 30-day SEC yield (a measure similar to yield-to-maturity). Typically, higher yields come at the cost of higher credit risk. But that isn't always the case. Over the past 12 months, the average yield of the fund has been higher than the average yield of its Morningstar Category peers. The portfolio's average surveyed credit quality is on par with peers, with both the fund and the average being rated BBB.

Above Average

Process

WisdomTree’s team is good but unexceptional, earning the strategy an Average People Pillar rating. There are two managers listed on the fund: Anil Katarya, Travis King. The team is well equipped, with an average of 17 years of 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 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 Corporate Bond Fund

WFIG tracks an index composed of investment grade, US corporate bonds. Constituents are selected and weighted by fundamental company and bond risk characteristics.

Three months of discouraging inflation data coupled with some hot economic data points are considered headwinds for U.S. Treasurys because both scenarios indicate rate cuts by the Federal Reserve aren't as imminent as previously expected. On the other hand, some market observers argue the case for corporate credit, particularly investment-grade fare, remains sturdy.

Despite Treasury Headwinds, Corporate Credit Beckons

It's unknown when the Federal Reserve will trim interest rates. It's also unknown how many times the central bank will do so this year.

This Corporate Bond ETF Is Increasingly Relevant

iShares J.P. Morgan EM Corporate Bond ETF

WisdomTree Emerging Markets Local Debt Fund

VanEck J.P Morgan EM Local Currency Bond ETF

KraneShares Bloomberg China Bond Inclusion Index ETF

KraneShares Asia Pacific High Yield Bond ETF

ProShares S&P 500 Bond ETF

Bull vs. Bear is a weekly feature where the VettaFi writers' room takes opposite sides for a debate on controversial stocks, strategies, or market ideas — with plenty of discussion of ETF ideas to play either angle. For this edition of Bull vs.

Bull vs. Bear: Should Your EM Debt Allocation Include China?

Broadly speaking, 2021 was a forgettable year in the bond market and more frustration could be on the way in 2022 as the Federal Reserve ramps up tapering activities and sets out upon interest rate hiking course. Corporate bonds could be one way for investors to remain engaged with fixed income in the new year [.

Corporate Bonds Could Reward Income Investors in 2022

Investment-grade corporate bonds aren't doing much to foster confidence among investors this year. For example, the widely followed Markit iBoxx USD Liquid Investment Grade Index is off 5.18% year-to-date, adding another layer of frustration to the 2021 fixed income market.

What to Watch With Corporate Bonds in 2022

While inflation has been a primary theme mentioned on earnings calls over the course of 2021, many U.S. corporations can deal with rising prices thanks to some pricing power. That's the view of Fitch Ratings, and should it prove accurate, it could be beneficial to some corporate bond exchange traded funds, including the WisdomTree U.S. [.

Most Domestic Companies Have Pricing Flexibility

Data confirm corporate borrowers are again taking advantage of favorable interest rates to issue new debt. That could be a sign that investors may want to apply more scrutiny to exchange traded funds providing exposure to corporate bonds.

With a Surge in Supply, It's Time to Be Choosy with Corporate Bonds

With Treasury yields residing in territory that hardly make the asset class worth the trouble for advisors servicing income-seeking investors, investment-grade corporate bonds are taking on added importance in the income equation.

Favor Credit Rates With These Investment-Grade Ideas

SPDR Portfolio Intermediate Term Corporate Bond ETF

iShares Broad USD Investment Grade Corporate Bond ETF

Beleaguered investment-grade corporate bond exchange traded funds got a lifeline Monday when the Federal Reserve said it buy $200 billion worth of high-grade corporate debt, helping the iShares iBoxx $ Investment Grade Corporate Bond ETF (NYSE: LQD) to a gain of 7.39% on more than double the daily average.

3 Corporate Bond ETFs For Fed Debt Buying

The corporate bond market is being pinched by the coronavirus pandemic and recession fears.

A Corporate Bond ETF Helping Investors Avoid Potential Downgrade Offenders

With Treasury yields recently having breached the 1% level, advisors and investors are scrambling to source yield with bonds, but with the coronavirus knocking high-yield corporate debt down a peg, other corporate bond strategies could come into focus.

News for WisdomTree US Corporate Bond Fund ETF (WFIG)