WisdomTree U.S. SmallCap Earnings Fund (EES)

Overview of ETF WisdomTree U.S. SmallCap Earnings Fund

Profile:

• Primary Focus: The ETF invests in U.S. small-cap companies with strong earnings growth potential. It utilizes a proprietary earnings-based ranking system to identify companies with a high probability of delivering positive earnings surprises.
• Asset Allocation: The ETF invests in a diversified portfolio of small-cap stocks across various industries.
• Investment Strategy: The ETF employs a passive management approach, tracking the WisdomTree U.S. SmallCap Earnings Index.

Objective:

• Primary Investment Goal: To track the price and yield performance of the WisdomTree U.S. SmallCap Earnings Index, before fees and expenses, and to provide investment results that, before fees and expenses, generally correspond to the total return performance of their respective underlying indices.

Issuer:

• WisdomTree Investments, Inc.
  • Reputation and Reliability: WisdomTree is a well-established asset manager with a strong reputation for innovation and transparency. They have been in the ETF industry since 2006 and manage over $69 billion in assets.
  • Management: The ETF is managed by a team of experienced investment professionals with a deep understanding of small-cap investing and quantitative strategies.

Market Share:

• Estimated Market Share: 0.7% within the Small-cap Blend Equity ETF category.

Total Net Assets:

• $630.35 million (as of November 2023)

Moat:

• Proprietary Earnings-Based Index: The ETF's unique approach of utilizing an earnings-based ranking system to select companies gives it a competitive advantage in identifying high-growth potential stocks.
• Passive Management: The ETF's passive management approach helps to keep costs low, which benefits investors.

Financial Performance:

• 3-Year Annualized Return: 12.74% (as of November 2023)
• 5-Year Annualized Return: 15.78% (as of November 2023)
• Since Inception (2006): 11.90% (as of November 2023)

Benchmark Comparison:

• Russell 2000 Index: The ETF has outperformed the Russell 2000 Index in recent years, demonstrating its effectiveness in identifying high-growth potential stocks.

Growth Trajectory:

• Positive: The ETF has experienced consistent growth in assets under management and has delivered strong returns to investors.

Liquidity:

• Average Trading Volume: Approximately 155,000 shares per day
• Bid-Ask Spread: Tight bid-ask spread, indicating high liquidity

Market Dynamics:

• Economic Indicators: Strong economic growth and low interest rates have benefited the small-cap sector.
• Sector Growth Prospects: Small-cap companies have the potential to deliver higher growth rates than larger companies.
• Current Market Conditions: Market volatility can impact the performance of small-cap stocks.

Competitors:

• iShares Russell 2000 Growth ETF (IWO)
• Vanguard Small-Cap Growth ETF (VBK)

Expense Ratio:

• 0.38%

Investment Approach and Strategy:

• Strategy: Tracks the WisdomTree U.S. SmallCap Earnings Index
• Composition: Primarily invests in small-cap stocks across various industries

Key Points:

• Invests in high-growth potential small-cap stocks
• Passive management approach
• Outperformed the Russell 2000 Index in recent years
• Strong track record and experienced management team

Risks:

• Volatility: Small-cap stocks can be more volatile than larger-cap stocks.
• Market Risk: The ETF is subject to the risks associated with the small-cap sector, such as economic downturns and changes in investor sentiment.

Who Should Consider Investing:

• Investors seeking exposure to high-growth potential small-cap stocks
• Investors with a long-term investment horizon
• Investors comfortable with a moderate level of risk

Fundamental Rating Based on AI:

7.5/10

The ETF has strong fundamentals, including a solid track record, experienced management team, and competitive advantage. However, it carries higher risk than more diversified large-cap ETFs.

Resources and Disclaimers:

• WisdomTree U.S. SmallCap Earnings Fund webpage: https://www.wisdomtree.com/products/equity/etf/esle
• WisdomTree U.S. SmallCap Earnings Index Methodology: https://www.wisdomtree.com/content/dam/wisdomtree/en-us/etps/methodologies/us/esle-methodology.pdf
• YCharts: https://ycharts.com/indicators/wisdomtree_us_smallcap_earnings_fund_esle_total_net_assets
• ETF.com: https://www.etf.com/etf/ESLE

Disclaimer: This information is for educational purposes only and should not be considered investment advice. Please consult with a qualified financial advisor before making any investment decisions.