InvestmentsJul 6 2016

WisdomTree unveils Europe dividend ETF

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WisdomTree unveils Europe dividend ETF

WisdomTree Investments has launched an exchange-traded fund which invests in European dividend stocks.

The New York-headquartered firm has today (6 July) unveiled its Eurozone Quality Dividend Growth Ucits ETF, which looks to tap into opportunities derived from shifting trends in dividends.

The ETF is weighted towards technology and consumer staples, with a low exposure to financials.

It is the latest edition to the firm’s income range - which includes its recently launched global and US products - which focuses on companies with the potential to grow their earnings.

Viktor Nossek, director of research at the European arm of WisdomTree, said this strategy is aligned with Warren Buffet’s approach of investing in companies with low debt, and which have a healthy return on both equity and assets.

WisdomTree Europe’s ETF strategist Nizam Hamid said: “In this current low-interest rate environment, we believe a quality tilt in the Eurozone may appeal to investors looking for a strategy that concentrates on forward-looking fundamentals.”

The annual charge for the ETF is 0.29 per cent.

There are too many launches of new ETFs, which appears to be a reflection of the search for yield. Nic Round, Treowe Wealth Advisers

Nic Round, managing director of Treowe Wealth Advisers, said: “In general terms, there are too many launches of new ETFs, which appears to be a reflection of the search for yield.

“The point is whether the underlying stocks are covered by other ETF funds, and if so, then there is no need for this type of fund.

“However, I suspect it will suit some investors with very clear mandates.”

Scott Gallacher, director of Rowley Turton, said: “This new ETF is a little too specialist for most of our clients, and perhaps may suffer from poor timing if Brexit affects Europe as opposed to just the UK.

“Rather than focusing on a single narrow area of investment we prefer funds that have a much broader approach.

“This means the investment manager will have more freedom to seek performance (or security) in the fashion they judge most appropriate, without being unduly constrained by a narrow fund mandate.”

katherine.denham@ft.com