XSOE Profile
The WisdomTree Emerging Markets ex-State-Owned Enterprises Fund is designed to offer investors exposure to emerging market equities with a focus on excluding state-owned enterprises. Under normal market conditions, the fund commits at least 80% of its total assets to securities that are constituents of the underlying index, as well as to investments with similar economic characteristics. This strategy ensures that the fund maintains a significant alignment with the index's performance, providing targeted exposure to the emerging markets while avoiding the influence of state-owned entities.
The underlying index employed by the fund is a modified float-adjusted market capitalization-weighted index. It includes a diverse range of common stocks from emerging market countries, strategically excluding those companies that are majority-owned or controlled by government entities. This exclusion is intended to focus on privately-owned businesses within these markets, which are believed to offer higher growth potential and different risk profiles compared to state-owned enterprises.
The index construction involves adjusting the market capitalization weights of constituent stocks to reflect their free-float market capitalization, which accounts for the shares available for public trading. By doing so, the index aims to provide a more accurate representation of the investment opportunity set within emerging markets, avoiding distortions caused by the presence of government-controlled companies.
Investors in the WisdomTree Emerging Markets ex-State-Owned Enterprises Fund gain access to a carefully curated selection of stocks from emerging economies, with the added benefit of avoiding state-owned entities. This approach is designed to offer exposure to companies with potentially higher growth trajectories and more dynamic market performances, while aligning with a strategy that seeks to mitigate the influence of government ownership on investment returns.
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