WisdomTree Dynamic Currency Hedged SmallCap Equity Fund (DDLS)

Overview

The entity described is a specialized investment fund focused on a niche segment of the financial market. It primarily commits its financial resources targetting small-capitalization equity securities situated in industrialized countries, excluding Canada and the United States. This narrow focus is supplemented by an innovative approach to managing currency risk, employing dynamic hedging strategies to mitigate the impact of foreign exchange fluctuations on its portfolio. This hedging strategy shields investors from the volatility that can arise from changes in the exchange rate between the U.S. dollar (USD) and the currencies of the countries where the investments are located. Despite its specialized investment focus, the fund maintains a non-diversified status, implying a concentrated investment approach that does not broadly spread its risk across a wide array of securities.

Products and Services

• Component Securities Investment:

  The fund commits a significant portion of its assets, at least 80%, to investing in the component securities of its targeted index. These investments are specifically chosen for their potential to mirror the economic characteristics of the index's component securities, ensuring a close alignment with the performance and risk profile of the index itself.

• Dynamic Currency Hedging:

  An integral part of its service offering, the fund leverages dynamic hedging techniques to manage the currency exposure arising from its investments in foreign equity securities. This approach adapts to changes in currency value, balancing the fund's exposure between foreign currencies and the US dollar, thereby aiming to protect the investment from currency risk that could affect the fund's returns.

• Focus on Small-Capitalization Equities:

  The investment strategy is heavily geared towards small-capitalization companies in the industrialized world, excluding the U.S. and Canada. This focus on small caps allows the fund to seek growth by investing in companies with the potential for rapid growth, though this also involves a higher level of risk compared to investments in larger, more established companies.

• Exposure to International Markets:

  By investing in equities outside of Canada and the U.S., the fund offers investors an opportunity to diversify their portfolios internationally. This exposure to international markets can provide growth opportunities by tapping into the potential of overseas economies, though it also carries the risks associated with international investing, including political and economic instability and differing regulatory environments.