WisdomTree (WSDT) last Thursday (3/17/11) introduced WisdomTree Asia Local Debt Fund (ALD), a new actively-managed ETF targeting Asia Pacific ex-Japan local currency debt. WisdomTree provides surprisingly little information on the fund, but somehow managed to accumulate a massive $145 million in assets prior to launch.
ALD seeks a high level of total return (income as well as capital appreciation) by investing in local debt denominated in the currencies of Asia Pacific ex-Japan countries.
The 0.55% expense ratio seems steep for a fund with the majority of its assets in cash (49.0% money market and 3.6% in T-bills). Only 47.4% of the fund is actually invested in foreign bonds according to the summary page.
The fund has 12 constituent countries and current country allocations are said to be Indonesia 11.2%, Malaysia 11.1%, South Korea 11.1%, Thailand 11.1%, Singapore 11.0%, Australia 11.0%, Hong Kong 5.7%, India 5.7%, China 5.6%, Philippines 5.6%, New Zealand 5.6%, and Taiwan 5.4%.
However, this appears to conflict with the 52.6% in U.S. Treasury Bills and dollar denominated money market funds. The apparent exclusion of Japan is another mystery. Many Asia-region products cap or exclude Japan due to its relatively large market cap, but ALD is actively-managed.
ALD’s yield is unknown at this time. Currency exposure also cannot be determined due to the conflicting information on holdings and country allocations. The stated duration of 2.93 is also questionable since we don’t know if that accounts for the U.S. cash allocations or not.
Despite all the unknowns, WisdomTree appears to have an instant success in ALD. Initial assets of $145 million places it ahead of more than 680, nearly 60%, of all other ETFs and ETNs on the market.
Additional information is in the press release (pdf) and prospectus.
Disclosure covering writer, editor, and publisher: No positions in any of the securities mentioned. No positions in any of the companies or ETF sponsors mentioned. No income, revenue, or other compensation (either directly or indirectly) received from, or on behalf of, any of the companies or ETF sponsors mentioned.