Conservative · Stocks to Consider and Updates

Stock to Consider: WidsomTree International Equity Fund

  As discussed on Monday, I have added the WisdomTree International Equity Exchange Traded Fund (NYSE: DWM – $49.56) to the conservative portfolio to replace the FMI International Fund, which will be closed to new investors at the end of the month. According to the company, the WisdomTree alternative: seeks to track the price and yield performance of the WisdomTree International Equity Index. At least 95% of the fund’s total assets will be invested in component securities of the index and investments that have economic characteristics that are substantially identical to the economic characteristics of such component securities. The index is a fundamentally weighted index that is comprised of dividend-paying companies in the industrialized world, excluding Canada and the United States, that pay regular cash dividends. The fund primarily invests in large-cap value companies that comprise about 69% of the portfolio with the remainder in mid-cap (16%) as well as small-cap and other investments (15%).

The fund’s top ten holdings of a total of 676 positions are as follows:

Cash = Cash and other marketable liquid assets.

       By geographical region, DWM is heavily weighted in Europe and to a lesser extent Asia. The North American exposure represents the fund’s cash position.

      The fund’s investments by sector are concentrated in financial, industrial and consumer discretionary positions, but are otherwise widely diversified.

      The fund, with approximately $700 million in total assets under management, is awarded 4 out of 5 stars from Morningstar based on its risk-adjusted performance compared to the 269 funds within the Morningstar foreign large value category.  The fund also yields 3.2%, at current levels, and should provide investors with a well-diversified exposure to non-U.S.-based companies. I am initiating DWM with an 8% allocation in the conservative portfolio.


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