The WisdomTree Barclays Yield Enhanced U.S. Aggregate Bond Fund (AGGY) was launched on 07/09/2015, and is a smart beta exchange traded fund designed to offer broad exposure to the Total Bond Market ETFs category of the U.S. equity market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
The fund is managed by Wisdomtree, and has been able to amass over $382.83 M, which makes it one of the average sized ETFs in the Total Bond Market ETFs. This particular fund seeks to match the performance of the Bloomberg Barclays U.S. Aggregate Enhanced Yield Index before fees and expenses.
The Bloomberg Barclays U.S. Aggregate Enhanced Yield Index broadly capture the U.S. investment grade, fixed income securities market while seeking to enhance yield within desired risk parameters and constraints.
Cost & Other Expenses
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Operating expenses on an annual basis are 0.12% for this ETF, which makes it one of the cheaper products in the space.
The fund has a 12-month trailing dividend yield of 3.03%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
When you look at individual holdings, Us Treasury Notes 2.25% accounts for about 0.40% of the fund's total assets, followed by Us Treasury Note 3.375% 11/15/2019 and Us Treasury Note 2.25% 11/15/2027.
Its top 10 holdings account for approximately 3.58% of AGGY's total assets under management.
Performance and Risk
So far this year, the ETF has lost about -2.97%, and is down about -1.34% in the last one year (as of 06/28/2018). AGGY has traded between $48.20 and $51.19 in the past 52-week period.
The ETF has a beta of 0.04 and standard deviation of 3.54% for the trailing three-year period, making it a medium choice in the space. With about 2016 holdings, it effectively diversifies company-specific risk.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center .
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