As filed with the Securities and Exchange Commission
on November 3, 2023
Securities Act File
No. 333-132380
Investment Company Act
File No. 811-21864
SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 | þ | |
Pre-Effective Amendment No. ___ | o | |
Post-Effective Amendment No. 896 | þ | |
and/or | ||
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 | þ | |
Amendment No. 898 | þ |
(Check appropriate
box or boxes.)
WISDOMTREE TRUST
(Exact Name of Registrant
as Specified in Charter)
250 West 34th
Street, 3rd Floor
New York, NY 10119
(Address of Principal
Executive Offices) (Zip Code)
1-866-909-9473
(Registrant’s
Telephone Number, including Area Code)
JONATHAN STEINBERG
WISDOMTREE TRUST
250 West 34th
Street, 3rd Floor
New York, NY 10119
(Name and Address of
Agent for Service)
Copies to:
W. John McGuire Laura E. Flores |
Joanne Antico |
|
Morgan, Lewis & Bockius LLP | WisdomTree Asset Management, Inc. | |
1111 Pennsylvania Avenue NW Washington, DC 20004 |
250 West 34th New York, NY 10119 |
It is proposed that this filing will become effective (check appropriate
box):
o 60 days after filing pursuant to paragraph (a) (1) of Rule 485. | o On (Date) pursuant to paragraph (a) (1) of Rule 485. |
þ 75 days after filing pursuant to paragraph (a) (2) of Rule 485. | o On (Date) pursuant to paragraph (a) (2) of Rule 485. |
o Immediately upon filing pursuant to paragraph (b) of Rule 485. | o On (Date) pursuant to paragraph (b) of Rule 485. |
If appropriate, check
the following box:
o | This post-effective amendment designates a new effective date for a previously filed post-effective amendment. |
Prospectus | |
[____ __, 2023] |
WisdomTree Trust
WisdomTree Fixed Income ETFs
WisdomTree Bianco Fixed Income Total Return
Fund ([____])*
*
Principal U.S. Listing Exchange: [____]
THE INFORMATION
IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
U.S. SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IS NOT SOLICITING
AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
THE U.S. SECURITIES AND EXCHANGE
COMMISSION (“SEC”) HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
WisdomTree Trust
WisdomTree Bianco Fixed Income Total Return Fund
Investment Objective
The WisdomTree Bianco Fixed Income Total Return Fund (the “Fund”)
seeks to track the price and yield performance, before fees and expenses, of the Bianco Research Total Return Index (the “Index”).
Fees and Expenses of the Fund
The following table describes the fees and expenses you may pay if you
buy, hold and sell shares of the Fund. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries,
which are not reflected in the table and example below. The fees are expressed as a percentage of the Fund’s average net assets.
Shareholder Fees (fees paid directly from your investment) | [ __ ] |
Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment) | |
Management Fees | [ __ ]% |
Distribution and/or Service (12b-1) Fees | [ __ ]% |
Other Expenses | [ __ ]%1 |
Acquired Fund Fees and Expenses | [ __ ]%1 |
Total Annual Fund Operating Expenses | [ __ ]%2 |
Fee Waivers | [ __ ]%3 |
Total Annual Fund Operating Expenses After Fee Waivers | [ __ ]%2 |
1 | Other Expenses and Acquired Fund Fees and Expenses are based on estimated amounts for the current fiscal year. |
2 | The Total Annual Fund Operating Expenses and Total Annual Fund Operating Expenses After Fee Waivers in this fee table may not correlate to the expense ratios in the Fund’s financial highlights and financial statements because the financial highlights and financial statements reflect only the operating expenses of the Fund and do not include Acquired Fund Fees and Expenses, which are fees and expenses incurred indirectly by the Fund through its investments in certain underlying investment companies. |
3 | WisdomTree Asset Management has contractually agreed, through [__________], 2024, to reduce the Fund’s Management Fee in an amount equal to the management fee paid to it by any WisdomTree Fund in which the Fund invests with respect to such investment. The amount waived may be reduced to offset the incremental costs related to an investment in an underlying fund and paid by WisdomTree Asset Management. This waiver agreement may be terminated by WisdomTree Asset Management upon advance notice at the conclusion of any one-year term or by the Fund’s Board of Trustees at any time. |
Example
This example is intended to help you compare the cost of investing in
the Fund with the cost of investing in other funds. The example assumes you invest $10,000 in the Fund for the time periods indicated
and then redeem or hold all of your shares at the end of those periods. The example also assumes that your investment has a 5% return
each year and that the Fund’s operating expenses remain the same, except that the example assumes the Fee Waiver applies only in
the first year. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:
1 Year | 3 Years | |
$[____] | $[____] |
Portfolio Turnover
The Fund pays transaction costs, such as commissions, when it buys and
sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and
may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in the Fund’s Annual
Fund Operating Expenses or in the example, affect the Fund’s performance. The Fund is newly organized and therefore, portfolio turnover
information is not yet available.
Principal Investment Strategies of the Fund
The Fund employs a “passive management” – or
indexing – investment approach designed to track the performance of the Index. The Fund generally uses a replication strategy
to achieve its investment objective, meaning it generally invests in all of the securities of the Index in approximately the same
proportion as the Index. However, the Fund also may use a representative sampling strategy to invest in a sample of the securities
in the Index whose risk, return and other characteristics resemble the risk, return and other characteristics of the Index as a
whole. The Fund generally will use a representative sampling strategy when the Adviser or Sub-Adviser believes it will better
position the Fund to seek to achieve its investment objective, such as when buying each security in an Index is impracticable or
inefficient, or when one or more securities in the Index becomes unavailable, including as a result of legal restrictions or
limitations that apply to the Fund and/or a security in the Index. Under normal circumstances, the Fund invests at least 80% of its
net assets (plus the amount of any borrowings for investment purposes) in exchange-traded funds (“ETFs”) that invest
primarily in fixed income securities. The Fund also may invest directly in fixed income securities and, to the extent it does so,
such investments will count toward the Fund’s 80% investment policy.
2 WisdomTree Trust Prospectus |
The Index, created by Bianco Research Advisors LLC (the “Index
Provider”), is composed of fixed income ETFs that are specifically selected and weighted to achieve specified factor exposures,
which are described in detail in the “Additional Information About the Fund’s Investment Strategies” section of the
Prospectus. An Index Committee established by the Index Provider is responsible for the construction and maintenance of the Index. The
Index Provider employs a multi-step rules-based index process administered by an Index Committee to construct and maintain the Index.
To construct the Index, the Index Committee first selects a pool
of fixed income ETFs, each of which must meet certain pre-determined criteria described herein and in the Index’s methodology
(the “Eligible ETF Pool”). To be eligible for inclusion in the Eligible ETF Pool, a fixed income ETF must (i) have
shares listed on a major U.S. national securities exchange, (ii) provide exposure to fixed-income assets, including but not limited
to government bonds, corporate bonds, municipal bonds, mortgage-backed securities, high yield securities, inflation-protected
securities, and international and emerging markets fixed income securities, and (iii) meet certain liquidity, cost effectiveness,
and efficiency (i.e., achieves its investment objective in an efficient manner) criteria. The Eligible ETF Pool is reconstituted
annually using these criteria. The Index Committee selects all Index constituents from the Eligible ETF Pool, including any new or
replacement constituents needed during the course of a year to maintain the desired exposure of the Index and to accommodate any
contingencies affecting Index constituents. WisdomTree ETFs may be included in the Eligible ETF Pool.
The Index Committee establishes a neutral portfolio of fixed income
ETFs, selected from the Eligible ETF Pool, that reflects a baseline of aggregate exposures based on the duration, curve, credit and volatility
risk (collectively, “Baseline Exposures”) of a universe of U.S. dollar-denominated investment grade debt meeting certain criteria
selected by the Index Committee (the “Baseline Universe”). Using the Baseline Universe, the Index Committee conducts a factor
exposure analysis to estimate the factor exposures it believes are driving the Baseline Universe’s returns (collectively, the “Factor
Exposures”) and calibrates tilts to those factors to produce the desired Index exposures.
The Index Committee then selects a group of fixed income ETFs from the
Eligible ETF Pool that, in the aggregate, provide the desired factor exposure profile to serve as the Index constituents. The Index is
reconstituted and rebalanced at the end of each month.
To the extent the Index concentrates (i.e., holds more than 25%
of its net assets) in the securities of companies assigned to a particular industry or group of industries, the Fund will concentrate
its investments in such industry to approximately the same extent as the Index.
Principal Risks of Investing in the Fund
You can lose money on your investment in the Fund. While certain of
the risks are prioritized in terms of their relevance to the Fund’s investment strategies, most risks are presented in alphabetical
order. This ordering approach is designed to both facilitate an investor’s understanding of the Fund’s risks and enable an
investor to easily locate and compare risks among funds. Each risk summarized below is considered a “principal risk” of investing
in the Fund, regardless of the order in which it appears. Some or all of these risks may adversely affect the Fund’s net asset value
per share (“NAV”), trading price, yield, total return and/or ability to meet its investment objective. For more information
about the risks of investing in the Fund, see the sections in the Fund’s Prospectus titled “Additional Principal Risk Information
About the Fund” and “Additional Non-Principal Risk Information.”
■ | Debt Securities Risk. Investments in debt securities subject the holder to the credit risk of the issuer. Credit risk refers to the possibility that the issuer or other obligor of a security will not be able or willing to make payments of interest and principal when due. Generally, the value of debt securities will change inversely with changes in interest rates. To the extent that interest rates rise, certain underlying obligations may be paid off substantially slower than originally anticipated and the value of those securities may fall sharply. During periods of falling interest rates, the income received by the Fund may decline. If the principal on a debt security is prepaid before expected, the prepayments of principal may have to be reinvested in obligations paying interest at lower rates. Debt securities generally do not trade on a securities exchange making them generally less liquid and more difficult to value than common stock. |
WisdomTree Trust Prospectus 3 |
■ | Interest Rate Risk. Interest rate risk is the risk that fixed income securities will decline in value because of an increase in interest rates and changes to other factors, such as perception of an issuer’s creditworthiness. Interest rates may change suddenly or unexpectedly and have unpredictable impacts on the financial markets and the Fund’s investments. To the extent that the Fund holds fixed income securities with higher durations, such securities generally are subject to greater interest rate risk. |
■ | Investment in Other ETFs Risk. The Fund’s investment performance and risks may be directly related to the investment performance and risks of the fixed income ETFs in which the Fund invests. In addition, the Fund will pay a proportional share of the fees and expenses of the ETFs in which it invests in addition to its own fees and expenses, which will reduce the Fund’s performance. Investments by the Fund in another ETF are subject to, among other risks, the risk that trading in the ETF’s shares may be halted or that the ETF’s shares may trade at a discount or premium relative to the NAV of the shares. |
■ | Mortgage- and Asset-Backed Securities Risk. Movements in interest rates (both increases and decreases) may quickly and significantly reduce the value of certain types of mortgage- and asset-backed securities. Mortgage- and asset-backed securities also can be subject to the risk of default on the underlying mortgages or other assets. Mortgage- and asset-backed securities are subject to fluctuations in yield due to prepayment rates that may be faster or slower than expected. Default or bankruptcy of a counterparty to a mortgage-related transaction would expose the Fund to possible loss. |
■ | Investment Risk. As with all investments, an investment in the Fund is subject to loss, including the possible loss of the entire principal amount of an investment, over short or long periods of time. |
■ | Market Risk. The trading prices of securities and other instruments fluctuate in response to a variety of factors, such as economic, financial or political events that impact the entire market, market segments, or specific issuers. The Fund’s NAV and market price may fluctuate significantly in response to these and other factors. As a result, an investor could lose money over short or long periods of time. |
■ | Shares of the Fund May Trade at Prices Other Than NAV. As with all ETFs, Fund shares may be bought and sold in the secondary market at market prices. The market prices of the Fund’s shares in the secondary market generally differ from the Fund’s daily NAV, and there may be times when the market price of the shares is more than the NAV (premium) or less than the NAV (discount). This risk is heightened in times of market volatility or periods of steep market declines. Because securities held by the Fund may trade on, or have exposure to, foreign exchanges that are closed when the Fund’s primary Listing Exchange is open, the Fund is likely to experience premiums and discounts greater than those of domestic ETFs. Additionally, in stressed market conditions, the market for the Fund’s shares may become less liquid in response to deteriorating liquidity in the markets for the Fund’s underlying portfolio holdings. |
■ | Credit Risk. Issuers might not make payments on debt securities, resulting in losses. Credit quality of securities may be lowered if an issuer’s financial condition changes, also resulting in losses. |
■ | Currency Exchange Rate Risk. Changes in currency exchange rates and the relative value of non-U.S. currencies will affect the value of the Fund’s investment and the value of your Fund shares. Currency exchange rates can be very volatile and can change quickly and unpredictably. As a result, the value of an investment in the Fund may also change quickly, unpredictably, and without warning, and you may lose money. |
■ | Cybersecurity Risk. The Fund and its service providers may be susceptible to operational and information security risks resulting from a breach in cybersecurity, including cyber-attacks. A breach in cybersecurity, intentional or unintentional, may adversely impact the Fund in many ways, including, but not limited to, disruption of the Fund’s operational capacity, loss of proprietary information, theft or corruption of data, denial-of-service attacks on websites or network resources, and the unauthorized release of confidential information. Cyber-attacks affecting the Fund’s third-party service providers, market makers, institutional investors authorized to purchase and redeem shares directly from the Fund (i.e., Authorized Participants), or the issuers of securities in which the Fund invests may subject the Fund to many of the same risks associated with direct cybersecurity breaches. |
■ | Emerging Markets Risk. Investments in securities and instruments traded in developing or emerging markets, or that provide exposure to such securities or markets, can involve additional risks relating to political, economic, or regulatory conditions not associated with investments in U.S. securities and instruments or investments in more developed international markets. Such conditions may impact the ability of the Fund to buy, sell or otherwise transfer securities, adversely affect the trading market and price for Fund shares and cause the Fund to decline in value. |
4 WisdomTree Trust Prospectus |
■ | Foreign Securities Risk. Investments in non-U.S. securities involve political, regulatory, and economic risks that may not be present in U.S. securities. For example, investments in non-U.S. securities may be subject to risk of loss due to foreign currency fluctuations, political or economic instability, or geographic events that adversely impact issuers of foreign securities. Investments in non-U.S. securities also may be subject to withholding or other taxes and may be subject to additional trading, settlement, custodial, and operational risks. These and other factors can make investments in the Fund more volatile and potentially less liquid than other types of investments and may be heightened in connection with investments in developing or emerging markets countries. |
■ | Geopolitical Risk. Some countries and regions in which the Fund may invest have experienced security concerns, war, threats of war, aggression and/or conflict, terrorism, economic uncertainty, sanctions or the threat of sanctions, natural and environmental disasters, the spread of infectious illness, widespread disease or other public health issues and/or systemic market dislocations (including due to events outside of such countries or regions) that have led, and in the future may lead, to increased short-term market volatility and may have adverse long-term effects on the U.S. and world economies and markets generally, each of which may negatively impact the Fund’s investments. |
■ | High Yield Securities Risk. Higher yielding, high risk debt securities, sometimes referred to as junk bonds, may present additional risk because these securities may be less liquid and present more credit risk than investment grade bonds. The price of high yield securities tends to be more susceptible to issuer-specific operating results and outlook and to real or perceived adverse economic and competitive industry conditions. High yield securities may be regarded as predominantly speculative with respect to the issuer’s continuing ability to meet principal and interest payments. |
■ | Index and Data Risk. The Fund is not “actively” managed and seeks to track the price and yield performance, before fees and expenses, of the Index. The Index may not perform as intended. The Index Provider has the right to make adjustments to the Index or to cease making the Index available without regard to the particular interests of the Fund or its shareholders. If the computers or other facilities of the Index Provider, data providers and/or relevant stock exchange malfunction for any reason, calculation and dissemination of Index values may be delayed and trading in Fund shares may be suspended for a period of time. Errors in Index data, Index calculations and/or the construction of the Index may occur from time to time and may not be identified and/or corrected by the Index Provider or other applicable party for a period of time or at all, which may have an adverse impact on the Fund and its shareholders. The potential risk of continuing error may be particularly heightened in the case of the Index, which is generally not used as a benchmark by other funds or managers. |
■ | Investment Style Risk. The Fund invests in the securities included in, or representative of, the Index regardless of their investment merit. The Fund does not attempt to outperform the Index or take defensive positions in declining markets. As a result, the Fund’s performance may be adversely affected by a general decline in the market segments relating to the Index. |
■ | Municipal Securities Risk. Municipal securities are subject to a variety of risks, including credit, interest rate, prepayment, and valuation risks. Issuers, including governmental issuers, of municipal securities may be unable to pay their obligations as they come due. The values of municipal securities that depend on a specific revenue source to fund their payment obligations may fluctuate as a result of actual or anticipated changes in the cash flows generated by the revenue source or changes in the priority of the municipal obligation to receive the cash flows generated by the revenue source. The values of municipal securities may also be adversely affected by local political and economic conditions and developments. Adverse conditions in an industry significant to a local economy could have a correspondingly adverse effect on the financial condition of local issuers. In addition, income from municipal securities held by the Fund could be declared taxable because of, among other things, unfavorable changes in tax laws, adverse interpretations by the Internal Revenue Service or state tax authorities, or noncompliant conduct of an issuer or other obligated party. Loss of tax-exempt status may cause interest received and distributed to shareholders by the Fund to be taxable and may result in a significant decline in the values of such municipal securities. |
WisdomTree Trust Prospectus 5 |
■ | Non-Correlation Risk. As with all index funds, the performance of the Fund and that of its Index may differ from each other for a variety of reasons. For example, the Fund incurs operating expenses and portfolio transaction costs, while also managing cash flows and potential operational inefficiencies, not incurred by its Index. In addition, when markets are volatile, the ability to sell securities at fair value prices may be adversely impacted and may result in additional trading costs and/or increase the Index tracking risk. The Fund’s use of sampling techniques also may affect its ability to achieve close correlation with its Index. |
■ | Non-Diversification Risk. The Fund is considered to be non-diversified, which means that it may invest more of its assets in the securities of a single issuer or a smaller number of issuers than if it were a diversified fund. To the extent the Fund invests a significant percentage of its assets in a limited number of issuers, the Fund is subject to the risks of investing in those few issuers, and may be more susceptible to a single adverse economic or regulatory occurrence. As a result, changes in the market value of a single security could cause greater fluctuations in the value of Fund shares than would occur in a diversified fund. |
■ | Portfolio Turnover Risk. The Fund’s investment strategy may result in a high portfolio turnover rate. Higher portfolio turnover may result in the Fund paying higher transaction costs and the distribution of additional capital gains, which may generate greater tax liabilities for shareholders who hold the shares in taxable accounts. Increased transaction costs and distributions of capital gains may negatively affect the Fund’s performance. |
■ | TIPS Risk. TIPS are inflation-protected public obligations of the U.S. Treasury. The interest and principal payments of TIPS are adjusted for inflation, typically on a monthly basis, in accordance with changes to a designated inflation index, such as the Consumer Price Index. Due to their inflation adjustment feature, TIPS typically have lower yields than conventional fixed-rate bonds. As inflation rises, the values of the TIPS’ interest and principal payments increase. Conversely, as inflation decreases, the values of the TIPS’ interest and principal payments decrease. Accordingly, the Fund’s income from TIPS may decline due to deflation, a decline in inflation, or changes in inflation expectations. |
■ | U.S. Government Securities Risk. It is possible that the U.S. Government would not provide financial support to its agencies or instrumentalities if it is not required to do so by law. The ability of foreign governments to repay their obligations is adversely impacted by default, insolvency, bankruptcy or by political instability, including authoritarian and/or military involvement in governmental decision-making, armed conflict, civil war, social instability and the impact of these events and circumstances on a country’s economy and its government’s revenues. |
Fund Performance
The Fund is new and therefore does not yet have a performance history.
Updated performance information for the Fund will be available online on the Fund’s website at www.wisdomtree.com/investments.
Management
Investment Adviser and Sub-Adviser
WisdomTree Asset Management, Inc. serves as investment adviser to the
Fund. [ ___ ] serves as the investment sub-adviser to the Fund.
Portfolio Managers
The Fund is managed by the [____] Portfolio Management team. The individual
members of the team jointly and primarily responsible for the day-to-day management of the Fund’s portfolio are identified below.
[_____]
[_____]
[_____]
[_____]
[_____]
Buying and Selling Fund Shares
The Fund is an ETF. This means that individual shares of the Fund
are listed for trading on a national securities exchange, currently [____] and may only be purchased and sold in the secondary
market through a broker-dealer at market prices. Because Fund shares trade at market prices rather than NAV, shares may trade at a
price greater than NAV (premium) or less than NAV (discount). In addition, an investor may incur costs attributable to the
difference between the highest price a buyer is willing to pay to purchase shares (bid) and the lowest price a seller is willing to
accept for shares (ask) when buying and selling shares in the secondary market (the “bid/ask spread”). Recent
information regarding the Fund, including its NAV, market price, premiums and discounts, and bid/ask spreads, is available on the
Fund’s website at www.wisdomtree.com/investments.
6 WisdomTree Trust Prospectus |
The Fund issues and redeems shares at NAV only in large blocks of shares
(“Creation Units”), which only certain institutions or large investors (typically market makers or other broker-dealers) may
purchase or redeem. The Fund issues and redeems Creation Units in exchange for a portfolio of securities and/or U.S. cash.
Tax Information
The Fund intends to make distributions that may be taxed as ordinary
income, qualified dividend income, or capital gains.
Payments to Broker-Dealers and Other Financial Intermediaries
If you purchase shares of the Fund through a broker-dealer or other
financial intermediary (such as a bank) (an “Intermediary”), WisdomTree Asset Management or its affiliates may pay Intermediaries
for certain activities related to the Fund, including participation in activities that are designed to make Intermediaries more knowledgeable
about exchange-traded products, including the Fund, or for other activities, such as marketing, educational training or other initiatives
related to the sale or promotion of Fund shares. These payments may create a conflict of interest by influencing the Intermediary and
your salesperson to recommend the Fund over another investment. Any such arrangements do not result in increased Fund expenses. Ask your
salesperson or visit the Intermediary’s website for more information.
WisdomTree Trust Prospectus 7 |
Additional Information About the Fund
Additional Information About the Fund’s Investment Objective
The Fund’s investment objective may be changed without a vote
of shareholders. WisdomTree Asset Management, however, will endeavor to provide shareholders with 60 days’ prior written notice
of any such change.
Additional Information About the Fund’s Investment Strategies
The Fund has adopted a policy to invest at least 80% of its net assets,
plus the amount of any borrowings for investment purposes, in the types of investments indicated by its name in compliance with Rule 35d-1
under the 1940 Act. This policy may be changed without a vote of shareholders upon 60 days’ notice to shareholders.
The quantity of holdings in the Fund, which generally uses a replication
strategy, will be based on a number of factors, including the number of Index constituents and the asset size of the Fund. In addition,
from time to time, securities are added to or removed from the Index and consequently the attributes of the Index, such as sectors, industries
or countries represented in the Index and weightings, may change. The Fund may sell securities that are represented in the Index, or purchase
securities that are not yet represented in the Index, in anticipation of their removal from or addition to the Index or to reflect various
corporate actions or other changes to the Index. Further, the Fund may overweight or underweight securities in the Index, purchase or
sell securities not in the Index, or utilize various combinations of other available techniques, in seeking to track the Index.
The Index. To determine the desired factor exposure of the Index
constituents, the Index Committee generally applies tilts to one or more of the factors listed below.
■ Duration – Option-adjusted modified duration, or a measure of the Index’s sensitivity to interest rate movements. |
■ Curve – Yield curve weightings, or how the option-adjusted modified duration is owned across the yield curve. |
■ Credit – Credit weightings, or the Index weighting of credit-related exposure relative to that of the Baseline Exposures and Baseline Universe. |
■ Volatility – Structure/MBS weightings, or the Index weighting of structure/mortgage exposure relative to that of the Baseline Exposures and Baseline Universe. |
■ Diversification and High Conviction – Outlier exposure or Index components not included in the neutral portfolio. |
In calibrating the tilts to the factors listed above, the Index Committee
considers both quantitative inputs (e.g., statistical studies of past relationships, valuation measures, and momentum) and qualitative
inputs (e.g., a historical understanding of government policy and interpretations of economic statistics and central bank communications).
The Index generally is rebalanced and reconstituted monthly, however,
it may be rebalanced and/or reconstituted other than on a monthly basis in response to certain circumstances, such as significant market
events or changes in government policy. The Index Committee may add and/or remove Index constituents in conjunction with any rebalance
or reconstitution of the Index, including any rebalance or reconstitution undertaken to address significant market events. To the extent
constituents are added to the Index they will be selected from the Eligible ETF Pool and thus, subject to the same eligibility criteria
as all other Index constituents.
In deteriorating market environments, the Index Committee may, but is
not obligated to, modify the composition of the Index to be more defensive, such as by selecting only Treasury securities as components
of the Index. In such circumstances, the Fund may similarly modify its holdings to continue to seek to track the Index.
Non-Principal Information About the Fund’s Investment Strategies
The Fund may invest in certain other investments the Adviser
and/or the Sub-Adviser believe will help the Fund achieve its investment objective, including fixed income securities, cash and cash
equivalents.
Securities Lending. The Fund participates in a securities
lending program administered by a third-party securities lending agent, State Street Bank and Trust Company, pursuant to which it
may lend its portfolio securities in an amount not to exceed one-third (33 1/3%) of the value of its total assets to brokers,
dealers and other financial institutions desiring to borrow those securities for a variety of reasons, including to facilitate the
pursuit of certain investment strategies or to complete transactions to which the borrower may be committed. To protect the Fund, in
part, from the risk of borrower default, the borrowing party provides collateral in an amount at least equal to the value of the
borrowed securities that will be maintained and marked to market daily by the Fund’s securities lending agent, who will
request any shortfall from the borrower. The Fund has permitted the securities lending agent to invest any collateral received in an
investment vehicle [sponsored by the securities lending agent] that invests in short-term, highly liquid investments. The terms of
the securities lending program provide that the Fund will receive a portion of the income generated from the loan of its securities
and the investment of the collateral received in connection with such loan. In exchange for its services, the securities lending
agent also receives a portion of the revenue generated by the securities lending program. While the Fund’s portfolio
securities are on loan, the borrower has the right to exercise any voting rights associated with those securities and the right to
receive dividends and other distributions on those securities. However, the Fund has the right to recall loaned securities in time
to vote on any matter of importance to it, and a borrower is obligated to repay to the Fund the amount of any dividends or
distributions received on the loaned securities. Generally, the Fund would recall a loaned security to vote a proxy only if the
matter to be voted on could potentially affect the Fund’s economic interests to a material extent.
8 WisdomTree Trust Prospectus |
Additional Principal Risk Information About the Fund
This section provides additional information regarding the principal
risks described under “Principal Risks of Investing in the Fund” in the Fund Summary. The Fund is subject to the risks described
below. Each of the factors below could have a negative impact on Fund performance and trading prices.
Credit Risk
Issuers might not make payments on debt securities, resulting in losses.
Credit quality of securities may be lowered if an issuer’s financial condition changes, also resulting in losses
Currency Exchange Rate Risk
Changes in currency exchange rates and the relative value of non-U.S.
currencies will affect the value of the Fund’s investments and the value of the Fund’s shares. Because the Fund’s NAV
is determined on the basis of U.S. dollars, the U.S. dollar value of your investment in the Fund may go down if the value of the local
currency of the non-U.S. markets in which the Fund invests depreciates against the U.S. dollar. This is true even if the local currency
value of securities in the Fund’s holdings goes up. Conversely, the dollar value of your investment in the Fund may go up if the
value of the local currency appreciates against the U.S. dollar.
The value of the U.S. dollar measured against other currencies is influenced
by a variety of factors. These factors include interest rates, national debt levels and trade deficits, changes in balances of payments
and trade, domestic and foreign interest and inflation rates, global or regional political, economic or financial events, monetary policies
of governments, actual or potential government intervention, and global energy prices. Political instability, the possibility of government
intervention and restrictive or opaque business and investment policies may also reduce the value of a country’s currency. Government
monetary policies and the buying or selling of currency by a country’s government may also influence exchange rates. Currency exchange
rates can be very volatile and can change quickly and unpredictably. As a result, the value of an investment in the Fund may change quickly,
unpredictably, and without warning, and you may lose money.
Cybersecurity Risk
The Fund and its service providers may be susceptible to operational
and information security risks resulting from a breach in cybersecurity, including cyber-attacks. A breach in cybersecurity, intentional
or unintentional, may adversely impact the Fund in many ways, including, but not limited to, disruption of the Fund’s operational
capacity, loss of proprietary information, theft or corruption of data maintained online or digitally, denial-of-service attacks on websites
or network resources, and the unauthorized release of confidential information. Cyber-attacks affecting the Fund’s third-party service
providers, including the Adviser, Sub-Adviser, administrator, custodian, and transfer agent, may subject the Fund to many of the same
risks associated with direct cybersecurity breaches and adversely impact the Fund. For instance, cyber-attacks may impact the Fund’s
ability to calculate its NAV, cause the release of confidential business information, impede trading, cause the Fund to incur additional
compliance costs associated with corrective measures, subject the Fund to regulatory fines or other financial losses, and/or cause reputational
damage to the Fund. Cybersecurity breaches of market makers, Authorized Participants, or the issuers of securities in which the Fund invests
also could have material adverse consequences on the Fund’s business operations and cause financial losses for the Fund and its
shareholders. While the Fund and its service providers have established business continuity plans and risk management systems designed
to address cybersecurity risks, prevent cyber-attacks and mitigate the impact of cybersecurity breaches, there are inherent limitations
on such plans and systems. In addition, the Fund has no control over the cybersecurity protections put in place by its service providers
or any other third parties whose operations may affect the Fund or its shareholders.
WisdomTree Trust Prospectus 9 |
Debt Securities Risk
Investments in debt securities subject the holder to the credit risk
of the issuer. Credit risk refers to the possibility that the issuer or other obligor of a security will not be able or willing to make
payments of interest and principal when due. Generally, the value of debt securities will change inversely with changes in interest rates.
To the extent that interest rates rise, certain underlying obligations may be paid off substantially slower than originally anticipated
and the value of those securities may fall sharply. During periods of falling interest rates, the income received by the Fund may decline.
If the principal on a debt security is prepaid before expected, the prepayments of principal may have to be reinvested in obligations
paying interest at lower rates. Debt securities generally do not trade on a centralized securities exchange making them generally less
liquid and more difficult to value than common stock. The values of debt securities may also increase or decrease as a result of market
fluctuations, actual or perceived inability or unwillingness of issuers, guarantors or liquidity providers to make scheduled principal
or interest payments or illiquidity in debt securities markets generally.
Emerging Markets Risk
Investments in securities and instruments traded in developing or emerging
markets, or that provide exposure to such securities or markets, can involve additional risks relating to political, economic, or regulatory
conditions not associated with investments in U.S. securities and instruments or investments in more developed international markets.
For example, emerging markets may be subject to (i) greater market volatility, (ii) lower trading volume and liquidity, (iii) greater
social, political and economic uncertainty, (iv) governmental controls on foreign investments, market manipulation concerns, and limitations
on repatriation of invested capital, (v) lower disclosure, corporate governance, accounting, auditing, financial reporting and recordkeeping
standards, (vi) fewer protections of property rights, (vii) limited investor rights and legal or practical remedies available to the Fund
against portfolio companies, (viii) restrictions on the transfer of securities or currency or payment of dividends and (ix) settlement
and trading practices that differ from U.S. markets. Each of these factors may impact the Fund’s ability to buy, sell, transfer,
receive, deliver or otherwise obtain exposure to, emerging market securities or currency, negatively impact the value and/or liquidity
of such instruments, adversely affect the trading market and price for shares of the Fund and cause the Fund to decline in value. The
volatility of emerging markets may be heightened by the actions (such as significant buying and selling) of a few major investors. For
example, substantial increases or decreases in cash flows of funds investing in these markets could significantly affect local securities’
prices and cause Fund share prices to decline. For these and other reasons, investments in emerging markets are often considered speculative.
Foreign Securities Risk
Investments in non-U.S. securities and instruments involve political,
regulatory, and economic risks that may not be present in U.S. securities. For example, investments in non-U.S. securities may be subject
to risk of loss due to foreign currency fluctuations, political or economic instability, or geographic events that adversely impact issuers
of foreign securities. There may be less information publicly available about a non-U.S. issuer than a U.S. issuer. Non-U.S. issuers may
be subject to different accounting, auditing, financial reporting and investor protection standards than U.S. issuers. Investments in
non-U.S. securities may be subject to withholding or other taxes and may be subject to additional trading, settlement, custodial, and
operational risks. With respect to certain countries, there is the possibility of government intervention and expropriation or nationalization
of assets. Because legal systems differ, there is also the possibility that it will be difficult to obtain or enforce legal judgments
in certain countries. Since foreign exchanges may be open on days when the Fund does not price its shares, the value of the securities
in the Fund’s portfolio may change on days when shareholders will not be able to purchase or sell the Fund’s shares. Conversely,
Fund shares may trade on days when foreign exchanges are closed. Each of these factors can make investments in the Fund more volatile
and potentially less liquid than other types of investments and may be heightened in connection with investments in developing or emerging
markets countries. Foreign securities also include American Depositary Receipts (“ADRs”), which are U.S. dollar-denominated
receipts representing shares of foreign-based corporations. ADRs are issued by U.S. banks or trust companies and entitle the holder to
all dividends and capital gains that are paid out on the underlying foreign shares. Global Depositary Receipts, which are similar to ADRs,
represent shares of foreign-based corporations and are generally issued by international banks in one or more markets around the world.
Investments in ADRs and GDRs may be less liquid and more volatile than underlying shares in their primary trading markets.
10 WisdomTree Trust Prospectus |
Geopolitical Risk
Some countries and regions in which the Fund invests have
experienced security concerns, war, threats of war, aggression and/or conflict, terrorism, economic uncertainty, sanctions or the
threat of sanctions, natural and environmental disasters, the spread of infectious illness, widespread disease or other public
health issues and/or systemic market dislocations (including due to events outside of such countries or regions) that have led, and
in the future may lead, to increased short-term market volatility and may have adverse long-term effects on the U.S. and world
economies and markets generally. Such geopolitical and other events also may disrupt securities markets and, during such market
disruptions, the Fund’s exposure to the other risks described herein will likely increase. For example, a market disruption
may adversely affect the orderly functioning of the securities markets. Each of the foregoing may negatively impact the Fund’s
investments.
High Yield Securities Risk
Investing in these securities involves special risks in addition to
the risks associated with investments in higher-rated fixed income securities. While offering a greater potential for capital appreciation
and higher yields, high yield securities typically entail higher price volatility and may be less liquid than securities with higher ratings.
Less liquid high yield securities may be more difficult to value accurately and more challenging to sell at an advantageous price or time.
The price of high yield securities tends to be more susceptible to issuer-specific operating results and outlook as well as real or perceived
adverse economic and competitive industry conditions and, therefore, subject to greater volatility. High yield securities may be regarded
as predominantly speculative with respect to the issuer’s continuing ability to meet principal and interest payments. Issuers of
securities in default may fail to resume principal or interest payments, in which case the Fund may lose its entire investment.
Index and Data Risk
The Fund seeks to track the price and yield performance, before fees
and expenses, of the Index. The Index may not perform as intended. The Index Provider has the right to make adjustments to the Index or
to cease making the Index available without regard to the particular interests of the Fund or its shareholders. While the Index Provider
provides a rules-based methodology that describes what the Index is designed to achieve within a particular set of rules, neither the
Index Provider, its agents nor data providers provide any warranty or accept any liability in relation to the quality, accuracy or completeness
of the Index, its calculation, valuation or its related data, and they do not guarantee that the Index will be in line with the Index
Provider’s methodology, regardless of whether or not the Index Provider is affiliated with the Adviser. The composition of the Index
is dependent on data from one or more third parties and/or the application of such data within the rules of the Index methodology, which
may be based on assumptions or estimates. If the computers or other facilities of the Index Provider, Index calculation agent, data providers
and/or relevant stock exchange malfunction for any reason, calculation and dissemination of Index values may be delayed and trading in
Fund shares may be suspended for a period of time. Errors in Index data, Index computations and/or the construction of the Index may occur
from time to time and may not be identified and/or corrected by the Index Provider, Index calculation agent or other applicable party
for a period of time or at all, which may have an adverse impact on the Fund and its shareholders. The potential risk of continuing error
may be particularly heightened in the case of the Index, which is generally not used as a benchmark by other funds or managers. Any of
the foregoing may lead to the inclusion of securities in the Index, exclusion of securities from the Index or the weighting of securities
in the Index that would have been different had data or other information been correct or complete, which may lead to a different investment
outcome than would have been the case had such events not occurred. The Adviser, through the Sub-Adviser, seeks to manage the Index Fund
to correspond to the Index provided by the Index Provider. Consequently, losses or costs associated with the Index’s errors or other
risks described above will be borne by the Fund and its shareholders and neither the Adviser nor its affiliates or agents make any representations
or warranties regarding the foregoing.
Interest Rate Risk
The market value of fixed income securities, and financial instruments
related to fixed income securities, will change in response to changes in interest rates and may change in response to other factors,
such as perception of an issuer’s creditworthiness. As interest rates rise, the value of certain fixed income securities is likely
to decrease. Similarly, if interest rates decline, the value of fixed income securities is likely to increase. While securities with
longer maturities tend to produce higher yields, the prices of longer maturity securities tend to be more sensitive to changes in interest
rates and thus subject to greater volatility than securities with shorter maturities. The “average portfolio maturity” of
the Fund is the average of all the current maturities of the individual securities in the Fund’s portfolio. Average portfolio maturity
is important to investors as an indication of the Fund’s sensitivity to changes in interest rates. Funds with longer portfolio
maturities generally are subject to greater interest rate risk.
WisdomTree Trust Prospectus 11 |
Investment in Other ETFs Risk
Because the Fund invests a substantial portion of its assets in
other ETFs, the Fund’s investment performance and risks may be directly related to the investment performance and risks of the
fixed income ETFs in which the Fund invests. In addition, the Fund will pay a proportional share of the fees and expenses of the
ETFs in which it invests in addition to its own fees and expenses, which will reduce the Fund’s performance. Investments by
the Fund in another ETF are subject to, among other risks, the risk that the ETF’s listing exchange may halt trading of the
ETF’s shares, the ETF may experience a lack of liquidity that can result in greater volatility than its underlying securities,
the ETF may not replicate exactly the performance of the benchmark index it seeks to track, or that the ETF’s shares may trade
at a discount or premium relative to the NAV of the shares.
Investment Risk
As with all investments, an investment in the Fund is subject to loss.
Investors in the Fund could lose money, including the possible loss of the entire principal amount of an investment, over short or long
periods of time. An investment in the Fund is not a bank deposit and it is not insured or guaranteed by the Federal Deposit Insurance
Corporation or any other government agency.
Investment Style Risk
The Fund invests in the securities included in, or representative of,
its Fund’s Index regardless of their investment merit. The Fund does not attempt to outperform the Fund’s Index or take defensive
positions in declining markets unless the Index is taking similar positions. As a result, the Fund’s performance may be adversely
affected by a general decline in the market segments relating to the Fund’s Index. The returns from the types of securities in which
the Fund invests may underperform returns from the various general securities markets or different asset classes. This may cause the Fund
to underperform other investment vehicles that invest in different asset classes. Different types of securities (for example, large-,
mid- and small-capitalization stocks) tend to go through cycles of doing better – or worse – than the general securities markets.
In the past, these periods have lasted for as long as several years.
Market Risk
The trading prices of securities and other instruments
fluctuate in response to a variety of factors. These factors include events impacting the entire market or specific market segments, such
as political, market and economic developments, including, but not limited to, changes in interest rates, government regulation, and the
outlook for economic growth or recession, as well as events that impact specific issuers, such as changes to an issuer’s actual
or perceived creditworthiness. The Fund’s NAV and market price, like security and commodity prices generally, may fluctuate significantly
in response to these and other factors. As a result, an investor could lose money over short or long periods of time.
Recent Events
Russia’s military invasion of Ukraine in February 2022,
the resulting responses by the United States and other countries, and the potential for wider conflict could increase volatility and
uncertainty in the financial markets and adversely affect regional and global economies for the foreseeable future. In response to Russia’s
actions, the governments of the United States, the European Union, the United Kingdom, and many other countries collectively imposed
broad-ranging economic sanctions on Russia, certain Russian individuals, banking entities and corporations, and Belarus as a response
to Russia’s invasion of Ukraine, and may impose sanctions on other countries that provide military or economic support to Russia.
The sanctions restrict companies from doing business with Russia and Russian companies, prohibit transactions with the Russian central
bank and other key Russian financial institutions and entities, ban Russian airlines and ships from using many other countries’
airspace and ports, respectively, and place a freeze on certain Russian assets. The sanctions also removed some Russian banks from the
Society for Worldwide Interbank Financial Telecommunications (SWIFT), the electronic network that connects banks globally to facilitate
cross-border payments. In addition, the United States and the United Kingdom have banned oil and other energy imports from Russia, as
well as other popular Russian exports, such as diamonds, seafood and vodka. The European Union, the United Kingdom and other countries
have also placed restrictions on certain oil, energy and luxury good imports from Russia. The extent and duration of Russia’s military
actions and the repercussions of such actions (including any retaliatory actions or countermeasures that may be taken by those subject
to sanctions, including cyber-attacks) are impossible to predict, but could result in significant market disruptions, including in certain
industries or sectors, such as the oil and natural gas markets, and may negatively affect global supply chains, inflation and global
growth. These and any related events could significantly impact the Fund’s performance and the value of an investment in the Fund,
even if the Fund does not have direct exposure to Russian issuers or issuers in other countries affected by the invasion.
12 WisdomTree Trust Prospectus |
Financial markets around the world may experience extreme
volatility, depressed valuations, decreased liquidity and heightened uncertainty and turmoil resulting from major cybersecurity
events, geopolitical events (including wars, such as Russia’s invasion of Ukraine, terror attacks, and disruptions to foreign
economic and trade relationships), public health emergencies, such as the COVID-19 pandemic, measures to address budget deficits,
downgrading of sovereign debt, and public sentiment, among other events. Resulting market volatility, dramatic changes to interest
rates, and otherwise unfavorable economic conditions may negatively impact Fund performance or impair the Fund’s ability to
achieve its investment objective.
In March 2023, the financial distress of certain financial institutions
raised economic concerns over disruption in the U.S. banking system and regarding the solvency of certain financial services firms. There
can be no certainty that the actions taken by the U.S. government to strengthen public confidence in the U.S. banking system will be effective
in mitigating the effects of financial institution failures on the economy and restoring public confidence in the U.S. banking system.
Mortgage- and Asset-Backed Securities Risk
Movements in interest rates (both increases and decreases) may quickly
and significantly reduce the value of certain types of mortgage- and asset-backed securities. Mortgage- and asset-backed securities can
also be subject to the risk of default on the underlying mortgages or other assets. Mortgage- and asset-backed securities are subject
to fluctuations in yield due to prepayment rates that may be faster or slower than expected. The Fund may invest in mortgage- and asset-backed
securities issued by legal entities that are sponsored by banks, investment banks, other financial institutions, or funds and are specifically
created for the purpose of issuing such asset-backed securities. Investors in asset-backed securities generally receive payments that
are part interest and part return of principal. Certain asset-backed securities may be interest-only securities or principal-only securities.
These payments typically depend upon the cash flows generated by an underlying pool of assets and vary based on the rate at which the
underlying obligors pay off their liabilities with respect to those underlying assets. The pooled assets provide cash flow to the issuer,
which then makes interest and principal payments to investors. Investments in asset-backed securities are subject to many of the same
risks that are applicable to investments in fixed income securities generally, including high yield and unrated securities risk, leverage
risk, prepayment and extension risk, and regulatory risk. However, asset-backed securities are particularly subject to interest rate,
credit, liquidity, and valuation risks. With respect to liquidity and valuation risks, asset-backed securities may be difficult to value
accurately or sell at an advantageous time or price and involve greater transaction costs and wider bid/ask spreads than certain other
instruments. In addition, the assets or collateral underlying an asset-backed security may be insufficient or unavailable in the event
of a default and enforcing and investor’s rights with respect to these assets or collateral may be difficult and costly. These risks
may be heightened under current economic and market conditions. Investments in asset-backed securities also are subject to risks relating
to the underlying pools of assets, including credit risk, default risk (such as a borrower’s default on its mortgage obligation
and the default or failure of a guarantee underlying the asset-backed security) and prepayment and extension risk with respect to the
underlying pool or individual assets represented in the pool. With respect to a mortgage loan backing mortgage-backed securities, when
an underlying obligor, such as a homeowner, makes a prepayment, an investor in the securities receives a larger portion of its principal
investment back, which means that there will be a decrease in monthly interest payments and the investor may not be able to reinvest the
principal it receives as a result of such prepayment in a security with a similar risk, return or liquidity profile. In addition to prepayments,
the underlying assets are subject to the risk of defaults, and both defaults and prepayments may shorten the securities’ weighted
average life and may lower their return, which, in turn, may adversely affect the Fund’s investment in the asset-backed securities.
The value of asset-backed securities held by the Fund also may change because of actual or perceived changes in the creditworthiness of
the underlying asset obligors, the originators, the servicing agents, the financial institutions, if any, providing credit support, or
swap counterparties in the case of synthetic asset-backed securities. In addition, there is no guarantee that the insurer or guarantor
of mortgage or mortgage-related securities, such as mortgage-backed securities, will meet their obligations.
Commercial Mortgage-Backed Securities
Commercial mortgage-backed securities (“CMBS”) are collateralized
by one or more commercial mortgage loans. Commercial mortgage loans may be secured by office properties, retail properties, hotels, mixed
use properties or multi-family apartment buildings. Investments in CMBS are subject to the risks of asset-backed securities generally
and particularly subject to credit risk, interest rate risk, and liquidity and valuation risk. These risks may be significantly heightened
under the current economic and market conditions. Economic downturns, rises in unemployment and other events that limit the activities
of and demand for commercial retail and office spaces (including the expansion of employees working from home, such as during the current
economic and public health situation) adversely impact the value of such securities. In addition, adverse developments in local, regional
and national economies generally adversely affect consumer spending, which, in turn, can have a significant negative effect on the economic
success of retail space. Retail properties also are subject to other conditions that generally negatively affect the retail sector, such
as increased unemployment, increased federal income and payroll taxes, increased health care costs, increased state and local taxes,
increased real estate taxes, industry slowdowns, lack of availability of consumer credit, weak income growth, increased levels of consumer
debt, poor housing market conditions, adverse weather conditions, natural disasters, plant closings, and other factors. CMBS also are
subject to the risk that the value of such securities will decline because, among other things, the securities are not issued or guaranteed
as to principal or interest by the U.S. government or a government sponsored enterprise. CMBS often are issued in multiple tranches,
each typically characterized by a different seniority. Depending on their respective seniority, individual tranches are subject to increased
(and sometimes different) credit, prepayment, liquidity and valuation risks as compared to other tranches. CMBS may experience greater
price volatility than other types of asset-backed securities or mortgage-backed securities.
WisdomTree Trust Prospectus 13 |
Mortgage-Backed Securities
Mortgage loans are typically grouped into pools by banks and other lending
institutions, and interests in these pools are then sold to investors, allowing the bank or other lending institution to have more money
available to loan to borrowers. Some of these pools are guaranteed by U.S. government agencies or by government sponsored private corporations
(e.g., “Ginnie Mae,” “Fannie Mae” and “Freddie Mac”) (referred to as “agency” mortgage-backed
securities) and others are created by non-governmental issuers without such guarantees (referred to as “non-agency” mortgage-backed
securities). Non-agency mortgage-backed securities are subject to the risk that the value of such securities will decline because, among
other things, the securities are not guaranteed as to principal or interest by the U.S. government or a government sponsored enterprise.
Non-agency mortgage-backed securities often are issued in multiple tranches for which the credit, prepayment, liquidity, and valuation
risks vary as compared to the other tranches. These securities are often subject to greater credit, prepayment, and liquidity and valuation
risks than agency mortgage-backed securities. In addition, these securities may be subject to greater price fluctuation than agency mortgage-backed
securities, especially during periods of weakness or perceived weakness in the mortgage and real estate sectors. Mortgage-backed securities
are particularly sensitive to changes in interest rates. Rising interest rates, for example, tend to extend the duration of fixed-rate
mortgage-backed securities. As a result, a rising interest rate environment can cause the prices of mortgage-backed securities to be increasingly
volatile and increase the risk that payments on principal may occur more quickly or earlier than expected, each of which may adversely
affect the Fund’s holdings of mortgage-backed securities. Rising interest rates generally result in a decline in the value of mortgage-backed
securities. In addition, in general, a decline of housing values and other economic developments, such as a rise in unemployment rates
or a slowdown in the overall economy, may cause delinquencies or non-payment in mortgages, particularly sub-prime and non-prime mortgages,
underlying mortgage-backed securities, which would likely adversely impact the ability of the issuer to make principal and/or interest
payments timely or at all to holders of the mortgage-backed securities and negatively affect the Fund’s investments in such securities.
These risks may be heightened under current economic and market conditions.
Municipal Securities Risk
Municipal securities are subject to a variety of risks, including
credit, interest rate, prepayment, and valuation risks. The values of municipal securities may be adversely affected by local
political and economic conditions and developments. Adverse conditions in an industry significant to a local economy could have a
correspondingly adverse effect on the financial condition of local issuers. Other factors that could affect municipal securities
include a change in the local, state, or national economy, demographic factors, ecological or environmental concerns, statutory
limitations on the issuer’s ability to increase taxes, and other developments generally affecting the revenue of issuers (for
example, legislation or court decisions reducing state aid to local governments or mandating additional services). This risk would
be heightened to the extent that the Fund invests a substantial portion of its assets in bonds issued pursuant to similar projects
(such as those relating to the education, health care, housing, transportation, or utilities industries), in industrial development
bonds, or in particular types of municipal securities (such as general obligation bonds, private activity bonds or moral obligation
bonds) that are particularly exposed to specific types of adverse economic, business or political events. Changes in a
municipality’s financial health may also make it difficult for the municipality to make interest and principal payments when
due. The values of municipal securities that depend on a specific revenue source to fund their payment obligations may fluctuate as
a result of actual or anticipated changes in the cash flows generated by the revenue source or changes in the priority of the
municipal obligation to receive the cash flows generated by the revenue source. Under some circumstances, municipal securities might
not pay interest unless the state legislature or municipality authorizes money for that purpose. Municipal securities may be more
susceptible to downgrades or defaults during recessions or similar periods of economic stress. In addition, since some municipal
securities may be secured or guaranteed by banks and other institutions, the risk to the Fund could increase if the banking or
financial sector suffers an economic downturn and/or if the credit ratings of the institutions issuing the guarantee are downgraded
or at risk of being downgraded by a national rating organization. Such a downward revision or risk of being downgraded may have an
adverse effect on the market prices of the bonds and thus the value of the Fund’s investments. In addition to being
downgraded, an insolvent municipality may file for bankruptcy. The reorganization of a municipality’s debts may significantly
affect the rights of creditors and the value of the securities issued by the municipality and the value of the Fund’s
investments. In addition, income from municipal securities held by the Fund could be declared taxable because of, among other
things, unfavorable changes in tax laws, adverse interpretations by the Internal Revenue Service or state tax authorities, or
noncompliant conduct of an issuer or other obligated party. Loss of tax-exempt status may cause interest received and distributed to
shareholders by the Fund to be taxable and may result in a significant decline in the values of such municipal securities. There are
various different types of municipal securities, each with its own unique risk profile. Some of these risks include:
14 WisdomTree Trust Prospectus |
■ | General Obligation Bonds Risk – timely payments depend on the issuer’s credit quality, ability to raise tax revenues and ability to maintain an adequate tax base; |
■ | Revenue Bonds (including Industrial Development Bonds) Risk – timely payments depend on the money earned by the particular facility or class of facilities, or the amount of revenues derived from another source, and may be negatively impacted by the general credit of the user of the facility; |
■ | Private Activity Bonds Risk – municipalities and other public authorities issue private activity bonds to finance development of industrial facilities for use by a private enterprise, which is solely responsible for paying the principal and interest on the bonds, and payment under these bonds depends on the private enterprise’s ability to do so; |
■ | Moral Obligation Bonds Risk – moral obligation bonds are generally issued by special purpose public authorities of a state or municipality. If the issuer is unable to meet its obligations, repayment of these bonds becomes a moral commitment, but not a legal obligation, of the state or municipality; |
■ | Municipal Notes Risk – municipal notes are shorter-term municipal debt obligations that pay interest that is, in the opinion of bond counsel for the issuer at the time of issuance, generally excludable from gross income for federal income tax purposes (except that the interest may be includable in taxable income for purposes of the federal alternative minimum tax) and that have a maturity that is generally one year or less. If there is a shortfall in the anticipated proceeds, the notes may not be fully repaid and the Fund may lose money; and |
■ | Municipal Lease Obligations Risk – in a municipal lease obligation, the issuer agrees to make payments when due on the lease obligation. Although the issuer does not pledge its unlimited taxing power for payment of the lease obligation, the lease obligation is secured by the leased property. |
Non-Correlation Risk
As with all index funds, the performance of the Fund and the Index may
vary somewhat for a variety of reasons. For example, the Fund incurs operating expenses and portfolio transaction costs, while also managing
cash flows and potential operational inefficiencies, not incurred by its Index. In addition, the Fund may not be fully invested in the
securities of the Index at all times or may hold securities not included in the Index or may be subject to pricing differences, differences
in the timing of dividend accruals, operational inefficiencies and the need to meet various new or existing regulatory requirements. For
example, it may take several business days for additions and deletions to the Index to be reflected in the portfolio composition of the
Fund. The use of sampling techniques may affect the Fund’s ability to achieve close correlation with the Index. By using a representative
sampling strategy, the Fund generally can be expected to have a greater non-correlation risk and this risk may be heightened during times
of market volatility or other unusual market conditions. In addition, when markets are volatile, the ability to sell securities at fair
value prices may be adversely impacted and may result in additional trading costs and/or increase the Index tracking risk.
Non-Diversification Risk
The Fund is considered to be non-diversified. This means that the
Fund may invest more of its assets in the securities of a single issuer or a smaller number of issuers than if it was a diversified
fund. As a result, the Fund may be more exposed to the risks associated with and developments affecting an individual issuer or a
smaller number of issuers than a fund that invests more widely. This may increase the Fund’s volatility and cause the
performance of a relatively smaller number of issuers to have a greater impact on the Fund’s performance. However, the Fund
intends to satisfy the asset diversification requirements under Subchapter M of the Internal Revenue Code of 1986, as amended (the
“Internal Revenue Code”), for qualification as a regulated investment company (“RIC”). See the “Taxes
– Qualification as a Regulated Investment Company” section of the Statement of Additional Information (the
“SAI”) for detail regarding the asset diversification requirements.
WisdomTree Trust Prospectus 15 |
Portfolio Turnover Risk
The Fund’s investment strategies may result in high portfolio turnover
rates for the Fund. High portfolio turnover would result in correspondingly greater transaction expenses and may result in the distribution
to shareholders of additional capital gains for tax purposes. These factors may negatively affect the Fund’s performance.
Shares of the Fund May Trade at Prices Other Than NAV
As with all ETFs, Fund shares may be bought and sold in the secondary
market at market prices. Although it is expected that the market price of the shares of the Fund will not materially differ from the Fund’s
NAV, there may be times when the market price and the NAV vary significantly, including due to timing reasons, perceptions about the NAV,
supply and demand of the Fund’s shares (including disruptions in the creation/redemption process), during periods of market volatility
and/or other factors. Because securities held by the Fund may trade on, or have exposure to, foreign exchanges that are closed when the
Fund’s primary Listing Exchange is open, the Fund is likely to experience premiums and discounts greater than those of domestic
ETFs. Thus, you may pay more (or less) than NAV when you buy shares of the Fund in the secondary market, and you may receive more (or
less) than NAV when you sell those shares in the secondary market. If an investor purchases Fund shares at a time when the market price
is at a premium to the NAV of the Fund’s shares or sells at a time when the market price is at a discount to the NAV of the Fund’s
shares, an investor may sustain losses. Additionally, in stressed market conditions, the market for the Fund’s shares may become
less liquid in response to deteriorating liquidity in the markets for the Fund’s underlying portfolio holdings.
TIPS Risk
TIPS are inflation-protected public obligations of the U.S. Treasury.
The interest and principal payments of TIPS are adjusted for inflation, typically on a monthly basis, in accordance with changes to a
designated inflation index, such as the Consumer Price Index. Due to their inflation adjustment feature, TIPS typically have lower yields
than conventional fixed-rate bonds. Interest payments on TIPS are unpredictable and will fluctuate as the principal and corresponding
interest payments adjust for inflation. As inflation rises, the values of the TIPS’ interest and principal payments increase. Conversely,
as inflation decreases, the values of the TIPS’ interest and principal payments decrease. Accordingly, the Fund’s income from TIPS
may decline due to deflation, a decline in inflation, or changes in inflation expectations. In addition, TIPS are subject to credit risk
and interest rate risk.
U.S. Government Securities Risk
It is possible that the U.S. Government would not provide financial
support to its agencies or instrumentalities if it is not required to do so by law. The ability of foreign governments to repay their
obligations is adversely impacted by default, insolvency, bankruptcy or by political instability, including authoritarian and/or military
involvement in governmental decision-making, armed conflict, civil war, social instability and the impact of these events and circumstances
on a country’s economy and its government’s revenues.
Additional Non-Principal Risk Information
Trading. Although the Fund’s shares are listed for trading
on [____], the Fund’s Principal U.S. Listing Exchange, and may be listed or traded on U.S. and non-U.S. stock exchanges other than the
Listing Exchange, there can be no assurance that an active trading market for such shares will develop or be maintained. The trading market
in the Fund’s shares may become less liquid in response to deteriorating liquidity in the markets for the Fund’s holdings
or due to irregular trading activity in the markets. Trading in shares may be halted due to market conditions or for reasons that, in
the view of the Listing Exchange, make trading in shares inadvisable. In addition, trading in shares on the Listing Exchange is subject
to trading halts caused by extraordinary market volatility pursuant to Listing Exchange “circuit breaker” rules. There can
be no assurance that the requirements of the Listing Exchange necessary to maintain the listing of the Fund will continue to be met or
will remain unchanged or that Fund shares will trade with any volume, or at all, on any stock exchange.
Costs of Buying or Selling Shares. Investors buying or
selling the Fund’s shares in the secondary market will pay brokerage commissions or other charges imposed by brokers, as
determined by that broker. Brokerage commissions are often a fixed amount and may be a significant proportional cost for investors
seeking to buy or sell relatively small amounts of the Fund’s shares. In addition, secondary market investors also will incur
the cost of the difference between the price that an investor is willing to buy shares (the “bid” price) and the price
at which an investor is willing to sell shares (the “ask” price). This difference in bid and ask prices is often
referred to as the “spread” or “bid/ask spread.” The bid/ask spread for the Fund’s shares varies over
time based on the trading volume and market liquidity of the Fund’s shares and in some cases, the trading volume and market
liquidity of the Fund’s holdings. Increased trading volume and market liquidity generally have the effect of reducing a
fund’s bid/ask spread. Further, a relatively small investor base, asset swings and/or increased market volatility may increase
a fund’s bid/ask spread. Shares of the Fund, similar to shares of other issuers listed on a securities exchange, may be sold
short and are therefore subject to the risk of increased volatility associated with short selling. Due to the costs of buying or
selling the Fund’s shares, including bid/ask spreads, frequent trading of the Fund’s shares may significantly reduce
investment results and an investment in shares may not be advisable for investors who anticipate regularly trading small
investments.
16 WisdomTree Trust Prospectus |
Securities Lending. Securities lending subjects the Fund to the
risk that the borrower of its securities may fail to return the loaned securities or deliver the proper amount of collateral, which may
result in a loss to the Fund. In addition, in the event of the bankruptcy of or other default by the borrower, the Fund could experience
losses or delays in recovering the loaned securities or foreclosing on collateral. In some cases, these risks may be mitigated by the
indemnification provided by the Fund’s securities lending agent. It also is possible that the Fund’s securities lending agent
could experience financial difficulties or bankruptcy, should such circumstances arise, the Fund may not receive the fees it has earned
and is owed under the securities lending program, and may have difficulty and confront delays in retrieving its loaned securities and/or
collateral. In addition, although the Fund receives and invests cash collateral in a conservative manner, it is possible that it could
lose money from such an investment or fail to earn sufficient income from its investment to cover the fee or rebate that it has agreed
to pay the borrower.
Authorized Participants, Market Makers and Liquidity Providers Concentration
Risk. The Fund has a limited number of financial institutions that may serve as Authorized Participants. In addition, there may be
a limited number of market makers and/or liquidity providers in the marketplace. the Fund’s shares may trade at a prolonged and
material premium or discount to NAV (or not trade at all) and possibly face trading halts and/or delisting if either of the following
events occur: (i) Authorized Participants exit the business, experience a significant business disruption (including through the types
of disruptions described under “Cybersecurity Risk” and “Operational Risk”), or otherwise become unable or unwilling
to process creation and/or redemption orders and no other Authorized Participants step forward to perform these services, or (ii) market
makers and/or liquidity providers exit the business, experience a significant business disruption (including through the types of disruptions
described under “Cybersecurity Risk” and “Operational Risk”), or significantly reduce their business activities
and no other entities step forward to make and support markets in the Fund’s shares or otherwise facilitate liquidity in the markets.
This risk may be heightened to the extent that the Fund invests in derivatives
or securities that trade on foreign exchanges or in markets that require foreign securities settlement and/or because Authorized Participants
may be required to post collateral in relation to securities settlement, which only certain Authorized Participants may be able to do
or interested in doing.
Operational Risk. The Fund and its service providers, including
the Adviser, Sub-Adviser, administrator, custodian, and transfer agent, may experience disruptions that arise from human error, processing
and communications errors, counterparty or third-party errors, and technology or systems failures, any of which may have an adverse effect
on the management or operations of the Fund, including its ability to create and redeem shares. Although the Fund and its service providers
seek to mitigate these operational risks through their internal controls and operational risk management processes, these measures may
not identify or may be inadequate to address all such risks.
Portfolio Holdings Information
Information about the Fund’s daily portfolio holdings, including
their identities and quantities, is available at www.wisdomtree.com/investments. The Fund also discloses its complete portfolio holdings
as of the end of its fiscal year (August 31) and its second fiscal quarter (February 28) in its reports to shareholders. The Fund files
its complete portfolio holdings as of the end of its first and third fiscal quarters (November 30 and May 31, respectively) with the SEC
in Part F of Form N-PORT no later than 60 days after the relevant fiscal period. You can find the SEC filings on the SEC’s website,
www.sec.gov, or by calling WisdomTree Trust at 1-866-909-WISE (9473). A summary of the Fund’s portfolio holdings disclosure policies
and procedures is included in the SAI.
WisdomTree Trust Prospectus 17 |
Management
Investment Adviser
As the investment adviser, WisdomTree
Asset Management has overall responsibility for the general management and administration of the WisdomTree Trust (the “Trust”),
including the Fund. WisdomTree Asset Management is a registered investment adviser with offices located at 250 West 34th
Street, 3rd Floor,
New York, New York 10119, and is a leader in ETF management. As of June 30, 2023, WisdomTree Asset Management had assets under management
totaling approximately $65.9 billion. WisdomTree, Inc. (“WisdomTree”)*
is the parent company of WisdomTree Asset Management.
WisdomTree Asset Management provides and oversees the implementation
of an investment program for the Fund. WisdomTree Asset Management also provides proactive oversight of the Sub-Adviser, including daily
monitoring of the Sub-Adviser’s purchase and sale of Fund holdings, and regular review of the Sub-Adviser’s investment performance.
In addition, WisdomTree Asset Management arranges for sub-advisory, transfer agency, custody, fund administration, securities lending,
and all other non-distribution-related services necessary for the Fund to operate.
* “WisdomTree” is a registered mark of WisdomTree and has
been licensed for use by the Trust.
For its services, WisdomTree Asset Management receives a fee from the
Fund, based on a percentage of the Fund’s average daily net assets, as shown in the following table:
Name of Fund | Management Fee |
WisdomTree Bianco Fixed Income Total Return Fund | [___]% |
Under the Investment Advisory Agreement for the Fund, WisdomTree Asset
Management has agreed to pay generally all expenses of the Fund, subject to certain exceptions. For a detailed description of the Investment
Advisory Agreement for the Fund, please see the “Management of the Trust” section of the SAI. Pursuant to a separate contractual
arrangement, WisdomTree Asset Management arranges for the provision of chief compliance officer (“CCO”) services with respect
to the Fund, and is liable and responsible for, and administers, payments to the CCO, the Independent Trustees and counsel to the Independent
Trustees. WisdomTree Asset Management receives a fee of up to 0.0044% of the Fund’s average daily net assets for providing such
services and paying such expenses. WisdomTree Asset Management provides CCO services to the Trust.
WisdomTree Asset Management has contractually agreed, through [__________],
2024, to reduce the Fund’s Management Fee in an amount equal to the management fee paid to it by any WisdomTree Fund in which the
Fund invests with respect to such investment. The amount waived may be reduced to offset the incremental costs related to an investment
in an underlying fund and paid by WisdomTree Asset Management (e.g., fund accounting, safekeeping, transaction fees, etc.). This
waiver agreement may be terminated by WisdomTree Asset Management upon advance notice at the conclusion of any one-year term or by the
Fund’s Board of Trustees at any time.
WisdomTree Asset Management entered into an agreement with the Index
Provider, pursuant to which the Index Provider agreed to (i) collaborate with WisdomTree Asset Management on the development of the Index
and provide certain Index-related support, and (ii) pay WisdomTree Asset Management a flat annual fee to offset certain operational expenses.
The agreement further generally provides that the Index Provider is entitled to a license fee, to be paid by WisdomTree Asset Management,
equal to half of WisdomTree Asset Management’s Management Fee after the payment of the Fund’s operational expenses. The Index
Provider is not affiliated with any WisdomTree Asset Management, WisdomTree, the Fund’s administrator, custodian, transfer agent
or the Distributor (defined below), or any of their respective affiliates. The Index Provider does not make investment decisions or provide
investment advice with respect to the Fund’s portfolio holdings, or otherwise act in the capacity of an investment adviser to the
Fund.
The basis for the Board of Trustees’ (the “Board”)
approval of the Fund’s Investment Advisory Agreement will be available in the Trust’s Semi-Annual Report to Shareholders for
the period ending February 29, 2024.
Sub-Adviser
[ ___ ] (the “Sub-Adviser”) is responsible for the day-to-day
management of the Fund. The Sub-Adviser, a registered investment adviser, is a [ ___ ]. Its principal office is located at [ ___ ]. As
of [ ___ ], the Sub-Adviser had assets under management totaling approximately $ [ ____ ]. The Sub-Adviser is a [ ___ ]. The Sub-Adviser
chooses the Fund’s portfolio investments and places orders to buy and sell the portfolio investments. WisdomTree Asset Management
pays the Sub-Adviser for providing sub-advisory services to the Fund.
18 WisdomTree Trust Prospectus |
The basis for the Board’s approval of the Fund’s Investment Sub-Advisory
Agreement will be available in the Trust’s Semi-Annual Report to Shareholders for the period ending February 29, 2024.
WisdomTree Asset Management may hire one or more sub-advisers to perform
the day-to-day portfolio management activities for the Fund, subject to its oversight. WisdomTree Asset Management and the Trust have
received an exemptive order from the SEC that permits, among other things, WisdomTree Asset Management, with the approval of the Independent
Trustees of the Trust, to hire unaffiliated investment sub-advisers for the Fund, without submitting the sub-advisory agreement to a vote
of the Fund’s shareholders. The Trust, however, would notify shareholders in the event a new sub-adviser is hired or an existing
sub-adviser is terminated and/or replaced. WisdomTree Asset Management has ultimate responsibility for the investment performance of the
Fund due to its responsibility to oversee any sub-adviser and recommend its hiring, termination and replacement.
Portfolio Managers
The Fund is managed by the Sub-Adviser’s [____] portfolio management
team. The individual members of the team jointly and primarily responsible for the day-to-day management of the Fund’s portfolio
are identified below.
[____]
[____]
[____]
[____]
[____]
The Fund’s SAI provides additional information about the Portfolio
Managers’ compensation, other accounts managed by the Portfolio Managers, and the Portfolio Managers’ ownership of shares
in the Fund.
WisdomTree Trust Prospectus 19 |
Additional Information on Buying and Selling Fund Shares
Most investors will buy and sell shares of the Fund in secondary market
transactions through broker-dealers at market prices. Shares of the Fund trade on the Listing Exchange and elsewhere during the trading
day and can be bought and sold throughout the trading day like other shares of publicly traded securities. When buying or selling shares
through a broker, most investors will incur customary brokerage commissions and charges and you may pay some or all of the spread between
the bid and the offered prices in the secondary market for shares. Shares of the Fund trade under the trading symbol listed on the cover
of this Prospectus.
Share Trading Prices
Transactions in Fund shares will be priced at NAV only if you are an
institutional investor (e.g., broker-dealer) that has signed an agreement with the Distributor (as defined below) and you thereafter
purchase or redeem shares directly from the Fund in Creation Units. As with other types of securities, the trading prices of shares in
the secondary market can be affected by market forces such as supply and demand, economic conditions and other factors. The price you
pay or receive when you buy or sell your shares in the secondary market may be more or less than the NAV of such shares.
Determination of Net Asset Value
The NAV of the Fund’s shares is calculated each day the national
securities exchanges are open for trading as of the close of regular trading on the Listing Exchange, generally 4:00 p.m., New York Time
(the “NAV Calculation Time”). NAV per share is calculated by dividing the Fund’s net assets by the number of Fund shares
outstanding.
In calculating its NAV, the Fund generally values: (i) equity securities
(including common stocks and preferred stock) traded on any recognized U.S. or non-U.S. exchange at the last sale price or official closing
price on the exchange or system on which they are principally traded; (ii) unlisted equity securities (including preferred stock) at the
last quoted sale price or, if no sale price is available, at the mean between the highest bid and lowest ask price; and (iii) fixed income
securities at current market quotations or mean prices obtained from broker-dealers or independent pricing service providers. In addition,
the Fund may invest in money market funds which are valued at their NAV per share and affiliated ETFs which are valued at their last sale
or official closing price on the exchange on which they are principally traded or at their NAV per share in instances where the affiliated
ETF has not traded on its principal exchange.
Pursuant to Board-approved valuation procedures established by the Trust
and the Adviser, the Board has appointed the Adviser as the Fund’s valuation designee (the “Valuation Designee”) to
perform all fair valuations of the Fund’s portfolio investments, subject to the Board’s oversight. As the Valuation Designee,
the Adviser has established procedures for its fair valuation of the Fund’s portfolio investments. These procedures address, among
other things, determining when market quotations are not readily available or reliable and the methodologies to be used for determining
the fair value of investments, as well as the use and oversight of third-party pricing services for fair valuation.
Fair value pricing is used by the Valuation Designee when reliable market
quotations are not readily available or are not deemed to reflect current market values and when the instrument to be priced is not a
security. Securities that may be valued using “fair value” pricing may include, but are not limited to, securities for which
there are no current market quotations or whose issuer is in default or bankruptcy, securities subject to corporate actions (such as mergers
or reorganizations), securities subject to non-U.S. investment limits or currency controls, and securities affected by “significant
events.” An example of a significant event is an event occurring after the close of the market in which a security trades but before
the Fund’s next NAV Calculation Time that may materially affect the value of the Fund’s investment (e.g., government
action, natural disaster, or significant market fluctuation). When fair value pricing is employed by the Valuation Designee, the prices
of securities used by the Fund to calculate its NAV may differ from quoted or published prices for the same securities.
Dividends and Distributions
The Fund intends to pay dividends, if any, on a monthly basis but in any event no
less frequently than annually.
The Fund intends to distribute its net realized capital gains, if any, to investors
annually. On occasion, the Fund may be required or determine to make one or more supplemental distributions of its net realized capital
gains during the year. Distributions in cash may be reinvested automatically in additional whole shares of the Fund only if the broker
through whom you purchased shares makes such option available. Your broker is responsible for distributing any income and capital gain
distributions to you.
Book Entry
Shares of the Fund are held in book-entry form, which means that no
stock certificates are issued. The Depository Trust Company (“DTC”) or its nominee is the record owner of all outstanding
shares of the Fund.
Investors owning shares of the Fund are beneficial owners as shown
on the records of DTC or its participants. DTC serves as the securities depository for all shares of the Fund. Participants include
DTC, securities brokers and dealers, banks, trust companies, clearing corporations, and other institutions that directly or
indirectly maintain a custodial relationship with DTC. As a beneficial owner of shares, you are not entitled to receive physical
delivery of stock certificates or to have shares registered in your name, and you are not considered a registered owner of shares.
Therefore, to exercise any right as an owner of shares, you must rely upon the procedures of DTC and its participants. These
procedures are the same as those that apply to any securities that you hold in book-entry or “street name” form. Your
broker will provide you with account statements, confirmations of your purchases and sales, and tax information.
20 WisdomTree Trust Prospectus |
Delivery of Shareholder Documents – Householding
Householding is an option available to certain investors of the Fund.
Householding is a method of delivery, based on the preference of the individual investor, in which a single copy of certain shareholder
documents can be delivered to investors who share the same address, even if their accounts are registered under different names. Householding
for the Fund is available through certain broker-dealers. If you are interested in enrolling in householding and receiving a single copy
of prospectuses and other shareholder documents, please contact your broker-dealer. If you are currently enrolled in householding and
wish to change your householding status, please contact your broker-dealer.
Frequent Purchases and Redemptions of Fund Shares
The Fund has adopted policies and procedures with respect to
frequent purchases and redemptions of Creation Units of Fund shares. Only Authorized Participants are authorized to purchase and
redeem shares directly from the Fund, and their purchase and redemption transactions are essential to the operation of the Fund. In
addition to helping to ensure there is an adequate supply of Fund shares to meet secondary market trading demand, Authorized
Participants’ purchase and redemption transactions also generally help to keep the trading prices of the Fund’s shares
in line with their NAV per share. In-kind purchase and redemption transactions generally do not give rise to the adverse
consequences commonly associated with frequent purchases and redemptions of fund shares because they do not require a fund to sell
portfolio holdings to raise cash to meet redemptions, which may increase portfolio transaction costs and potentially result in
adverse tax consequences, such as the realization of capital gains, or to hold a significant amount of cash to meet redemptions or
while awaiting investment opportunities to invest share purchase proceeds, which can lead to increased tracking error or reduced
returns. Accordingly, it is the policy of the Fund to accommodate frequent purchases and redemptions of Fund shares by Authorized
Participants. To mitigate any adverse consequences of frequent purchases and redemptions, particularly if the Fund transacts with
Authorized Participants on a cash-basis, the Fund employs fair value pricing and imposes transaction fees on purchases and
redemptions of Creation Units to cover the costs incurred by the Fund in executing such trades. In addition, the Fund reserves the
right to impose restrictions on disruptive, excessive, or short-term trading as well as to reject any purchase order at any
time.
Investments by Investment Companies
Section 12(d)(1) of the Investment Company Act of 1940 (the “Investment
Company Act”) restricts investments by investment companies in the securities of other investment companies, including shares of
the Fund. Registered investment companies are permitted to invest in another registered investment company, an acquired fund, beyond the
limits set forth in Section 12(d)(1) of the Investment Company Act subject to certain terms and conditions set forth in Rule 12d1-4 under
the Investment Company Act, including that such registered investment companies enter into an agreement with the acquired fund setting
forth the material terms of investment in the acquired fund. However, registered investment companies generally may not rely on Rule 12d1-4
to invest in an acquired fund beyond the limits set forth in Section 12(d)(1) if the acquired fund also invests significantly in other
investment companies in reliance on and compliance with the conditions set forth in Rule 12d1-4. As described herein, the Fund expects
to invest in other ETFs to a significant extent and may do so in reliance on Rule 12d1-4 under the Investment Company Act. To the extent
the Fund does so, other investment companies will not be permitted to invest in the Fund beyond the Section 12(d)(1) limits in reliance
on Rule 12d1-4. Any investment company interested in purchasing shares of the Fund beyond the limits set forth in Section 12(d)(1) should
contact the Trust.
WisdomTree Trust Prospectus 21 |
Additional Tax Information
The following discussion is a summary of certain important U.S. federal
income tax considerations generally applicable to investments in the Fund. Your investment in the Fund may have other tax implications.
Please consult your tax advisor about the tax consequences of an investment in Fund shares, including the possible application of foreign,
state, and local tax laws.
The Fund intends to elect and to qualify each year for treatment as
a RIC. If it meets certain minimum distribution requirements, a RIC is not subject to tax at the Fund level on income and gains from investments
that are timely distributed to shareholders. However, the Fund’s failure to qualify as a RIC or to meet minimum distribution requirements
would result (if certain relief provisions were not available) in Fund-level taxation and consequently a reduction in income available
for distribution to shareholders.
Unless you are a tax-exempt entity or your investment in Fund shares
is made through a tax-deferred retirement account, such as an individual retirement account, you need to be aware of the possible tax
consequences when:
■ | The Fund makes distributions; | |
■ | You sell Fund shares; and | |
■ | You purchase or redeem Creation Units (Authorized Participants only). |
Taxes on Distributions
For federal income tax purposes, distributions of investment income
are generally taxable as ordinary income or qualified dividend income. Taxes on distributions of capital gains (if any) are determined
by how long the Fund owned the assets that generated them, rather than how long a shareholder has owned Fund shares. The Fund’s
sale of assets it has held for more than one year generally result in long-term capital gains and losses, and its sales of assets it has
held for one year or less generally results in short-term capital gains and losses. Distributions of the Fund’s net capital gain
(the excess of net long-term capital gains over net short-term capital losses) that are properly reported by the Fund as capital gain
dividends (“Capital Gain Dividends”) will be taxable as long-term capital gains. For non-corporate shareholders, long-term
capital gains are generally subject to tax at reduced rates. Distributions of short-term capital gain will generally be taxable as ordinary
income. Distributions reported by the Fund as “qualified dividend income” are generally taxed to non-corporate shareholders
at rates applicable to long-term capital gains, provided holding period and other requirements are met. Distributions that the Fund receives
from an underlying fund will be treated as qualified dividend income only to the extent so designated by such underlying fund. “Qualified
dividend income” generally is income derived from dividends paid by U.S. corporations or certain foreign corporations that are either
incorporated in a U.S. possession or eligible for tax benefits under certain U.S. income tax treaties. The Fund’s investment strategy
is expected to result in the Fund earning interest income rather than dividend income. Therefore, the Fund does not expect to distribute
dividends eligible for the reduced rates applicable to qualified dividend income for non-corporate shareholders or the dividends received
deduction for corporate shareholders.
In general, your distributions are subject to federal income tax for
the year in which they are paid. Certain distributions paid in January, but declared by the Fund in October, November or December of the
previous year, may be treated as paid on December 31 of the prior year. Distributions are generally taxable even if they are paid from
income or gains earned by the Fund before your investment (and thus were included in the price you paid for your shares).
Dividends and distributions from the Fund and capital gain on the sale
of Fund shares are generally taken into account in determining a shareholder’s “net investment income” for purposes
of the 3.8% tax on net investment income applicable to certain individuals, estates and trusts.
The Fund may include cash when paying the redemption price for Creation
Units in addition to, or in place of, the delivery of a basket of securities. The Fund may be required to sell portfolio securities in
order to obtain the cash needed to distribute redemption proceeds. This may cause the Fund to recognize investment income and/or capital
gains or losses that it might not have recognized if it had completely satisfied the redemption in-kind. As a result, the Fund may be
less tax efficient if it includes such a cash payment than if the in-kind redemption process was used.
Distributions (other than Capital Gain Dividends) paid to
shareholders that are neither citizens nor residents of the U.S. or to foreign entities will generally be subject to a U.S.
withholding tax at the rate of 30%, unless a lower treaty rate applies, but Capital Gain Dividends generally are not subject to U.S.
taxation, unless you are a nonresident alien individual who is physically present in the United States for 183 days or more per
year. The Fund may, under certain circumstances, report all or a portion of a dividend as an “interest related dividend”
or a “short term capital gain dividend,” which would generally be exempt from this 30% U.S. withholding tax, provided
certain other requirements are met. Different tax consequences may result if you are a non-U.S. shareholder engaged in a trade or
business within the United States.
22 WisdomTree Trust Prospectus |
You should note that if you purchase shares just before a distribution,
the purchase price would reflect the amount of the upcoming distribution. In this case, you would be taxed on the entire amount of the
distribution received, even though, as an economic matter, the distribution simply constitutes a return of your investment. This is known
as “buying a dividend” and should be avoided by taxable investors.
The Fund (or your broker) will inform you of the amount and character
of any distributions shortly after the close of each calendar year.
If the Fund receives business interest income it may pass through its
net business interest income for purposes of the tax rules applicable to the interest expense limitations under Section 163(j) of the
Internal Revenue Code. The Fund’s total “Section 163(j) Interest Dividend” for a tax year is limited to the excess of
the Fund’s business interest income over the sum of its business interest expense and its other deductions properly allocable to
its business interest income. The Fund may, in its discretion, designate all or a portion of ordinary dividends as Section 163(j) Interest
Dividends, which would allow the recipient shareholder to treat the designated portion of such dividends as interest income for purposes
of determining such shareholder’s interest expense deduction limitation under Section 163(j). This can potentially increase the
amount of a shareholder’s interest expense deductible under Section 163(j). In general, to be eligible to treat a Section 163(j)
Interest Dividend as interest income, you must have held your shares in the Fund for more than 180 days during the 361-day period beginning
on the date that is 180 days before the date on which the share becomes ex-dividend with respect to such dividend. Section 163(j) Interest
Dividends, if so designated by the Fund, will be reported to your financial intermediary or otherwise in accordance with the requirements
specified by the Internal Revenue Service (the “IRS”).
The Fund (or financial intermediaries, such as brokers, through which
shareholders own Fund shares) generally is required to withhold and to remit to the U.S. Treasury a percentage of the taxable distributions
and the sale or redemption proceeds paid to any shareholder who fails to properly furnish a correct taxpayer identification number, who
has under-reported dividend or interest income, or who fails to certify that he, she or it is not subject to such withholding.
Taxes When You Sell Fund Shares
Assuming you hold Fund shares as capital assets, any capital gain or
loss realized upon a sale of Fund shares is generally treated as a long-term gain or loss if you held the shares you sold for more than
one year. Any capital gain or loss realized upon a sale of Fund shares held for one year or less is generally treated as a short-term
gain or loss, except that any capital loss on a sale of shares held for six months or less is treated as a long-term capital loss to the
extent of Capital Gain Dividends paid with respect to such shares. The ability to deduct capital losses may be limited depending on your
circumstances.
Taxes on Creation and Redemption of Creation Units
An Authorized Participant having the U.S. dollar as its functional currency
for U.S. federal income tax purposes that exchanges securities for Creation Units generally will recognize a gain or loss equal to the
difference between (i) the sum of the market value of the Creation Units at the time of the exchange and any amount of cash received by
the Authorized Participant in the exchange and (ii) the sum of the exchanger’s aggregate basis in the securities surrendered and
any amount of cash paid for such Creation Units. A person who redeems Creation Units will generally recognize a gain or loss equal to
the difference between the exchanger’s basis in the Creation Units and the sum of the aggregate U.S. dollar market value of the
securities plus the amount of any cash received for such Creation Units. The IRS, however, may assert that a loss that is realized upon
an exchange of securities for Creation Units may not be permitted to be currently deducted under the rules governing “wash sales”
(for a person who does not mark-to-market their holdings), or on the basis that there has been no significant change in economic position.
Gain or loss recognized by an Authorized Participant upon an
issuance of Creation Units in exchange for non-U.S. currency will generally be treated as ordinary income or loss. Gain or loss
recognized by an Authorized Participant upon an issuance of Creation Units in exchange for securities, or upon a redemption of
Creation Units, may be capital or ordinary gain or loss depending on the circumstances. Any capital gain or loss realized upon an
issuance of Creation Units in exchange for securities will generally be treated as long-term capital gain or loss if the securities
have been held for more than one year. Any capital gain or loss realized upon the redemption of a Creation Unit will generally be
treated as long-term capital gain or loss if the Fund shares comprising the Creation Unit have been held for more than one year.
Otherwise, such capital gains or losses are treated as short-term capital gains or losses.
WisdomTree Trust Prospectus 23 |
A person subject to U.S. federal income tax with the U.S. dollar as
its functional currency who receives non-U.S. currency upon a redemption of Creation Units and does not immediately convert the non-U.S.
currency into U.S. dollars may, upon a later conversion of the non-U.S. currency into U.S. dollars, recognize any gains or losses resulting
from fluctuations in the value of the non-U.S. currency relative to the U.S. dollar since the date of the redemption. Any such gains or
losses will generally be treated as ordinary income or loss.
Persons exchanging securities or non-U.S. currency for Creation Units
should consult their own tax advisors with respect to the tax treatment of any creation or redemption transaction and whether the wash
sales rules apply and when a loss might be deductible. If you purchase or redeem Creation Units, you will be sent a confirmation statement
showing how many Fund shares you purchased or redeemed and at what price.
More information about taxes related to the Funds and their investments
is included in the SAI.
The foregoing discussion summarizes some of the consequences under current
U.S. federal income tax law of an investment in the Fund. It is not a substitute for personal tax advice, and we encourage you to consult
your personal tax advisor about the potential tax consequences of an investment in the Fund under all applicable tax laws.
Distribution
Foreside Fund Services, LLC (the “Distributor”) serves as
the distributor of Creation Units for the Fund on an agency basis. The Distributor does not maintain a secondary market in shares of the
Fund. The Distributor’s principal address is Three Canal Plaza, Suite 100, Portland, Maine 04101. The Distributor has no role in
determining the policies of the Fund or the securities that are purchased or sold by the Fund.
Premium/Discount and NAV Information
Information regarding the Fund’s NAV and how often shares of the
Fund traded on the Listing Exchange at a price above (i.e., at a premium) or below (i.e., at a discount) the NAV of the
Fund during the past calendar year and most recent calendar quarter is available at www.wisdomtree.com/investments.
Additional Notices
Listing Exchange
Shares of the Fund are not sponsored, endorsed, or promoted by the Listing
Exchange. The Listing Exchange makes no representation or warranty, express or implied, to the owners of the shares of the Fund or any
member of the public regarding the ability of the Fund to track the total return performance of the Index or the ability of the Index
identified herein to track stock market performance. The Listing Exchange is not responsible for, nor has it participated in, the determination
of the compilation or the calculation of the Index, nor in the determination of the timing of, prices of, or quantities of the shares
of the Fund to be issued, nor in the determination or calculation of the equation by which the shares are redeemable. The Listing Exchange
has no obligation or liability to owners of the shares of the Fund in connection with the administration, marketing, or trading of the
shares of the Fund.
The Listing Exchange does not guarantee the accuracy and/or the completeness
of the Index or any data included therein. The Listing Exchange makes no warranty, express or implied, as to results to be obtained by
the Trust on behalf of the Fund, owners of the shares, or any other person or entity from the use of the Index or any data included therein.
The Listing Exchange makes no express or implied warranties, and hereby expressly disclaims all warranties of merchantability or fitness
for a particular purpose with respect to the Index or any data included therein. Without limiting any of the foregoing, in no event shall
the Listing Exchange have any liability for any lost profits or indirect, punitive, special, or consequential damages even if notified
of the possibility thereof.
WisdomTree and the Fund
WisdomTree and WisdomTree Asset Management (together,
“WT”) and the Fund make no representation or warranty, express or implied, to the owners of shares of the Fund or any
member of the public regarding the advisability of investing in securities generally or in shares of the Fund particularly or the
ability of the Fund to achieve its investment objective. WisdomTree is the licensor of trademarks, service marks, and
trade names of the Fund. WisdomTree is not responsible for, and has not participated in, the determination of the timing, prices, or
quantities of shares of the Fund to be issued or in the determination or calculation of the equation by which the shares of the Fund
are redeemable. Bianco Research Advisors LLC is the licensor of the Index and neither WT nor the Fund guarantee the accuracy,
completeness, or performance of the Index or the data included therein and neither shall have any liability in connection with the
Index, including its calculation.
24 WisdomTree Trust Prospectus |
Bianco Research Advisors LLC
NEITHER BIANCO RESEARCH ADVISORS LLC (“BIANCO”) NOR ANY
OTHER PARTY AFFILIATED WITH BIANCO (“BIANCO AFFILIATE”) GUARANTEES THE ACCURACY AND/OR THE COMPLETENESS OF THE INDEX OR ANY
INDEX DATA INCLUDED THEREIN. NEITHER BIANCO NOR ANY OTHER BIANCO AFFILIATE MAKES ANY WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE
OBTAINED FROM THE USE OF THE INDEX OR ANY INDEX DATA INCLUDED HEREIN. BIANCO EXPRESSLY DISCLAIMS ANY LIABILITY FOR ANY ERRORS OR OMISSIONS
IN THE INDEX OR INDEX DATA AND NO THIRD PARTY MAY RELY ON THE INDEX OR INDEX DATA REFERENCED OR CONTAINED IN THIS PROSPECTUS. NEITHER
BIANCO NOR ANY BIANCO AFFILIATE PROMOTES, SPONSORS OR ENDORSES THE CONTENT OF THIS PROSPECTUS.
Financial Highlights
The Fund had not commenced operations prior to the date of this Prospectus
and, therefore, no financial highlights are available for the Fund at this time. In the future, financial highlights will be presented
in this section of the Prospectus.
WisdomTree Trust Prospectus 25 |
WisdomTree Trust
250 West 34th Street, 3rd Floor
New York, NY 10119
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The Fund’s current SAI provides additional detailed information
Additional information about the Fund’s investments will be available in the
To make shareholder inquiries, for more detailed information on the Fund, |
|||||
Call: | 1-866-909-9473 Monday through Friday 9:00 a.m. to 5:30 p.m. (Eastern time) |
Write: | WisdomTree Trust c/o Foreside Fund Services, LLC Three Canal Plaza, Suite 100 Portland, Maine 04101 |
||
Visit: | www.wisdomtree.com/investments | ||||
Reports and other information about the Fund are available on the EDGAR
No person is authorized to give any information or to make any representations about the |
© 2023 WisdomTree Trust
WisdomTree Funds are distributed in the U.S. by
WisdomTree® is a registered mark of WisdomTree, Inc.
INVESTMENT COMPANY ACT FILE NO. 811-21864 |
WISDOMTREE®
TRUST
WisdomTree
Bianco Fixed Income Total Return Fund ([ ])
Principal
U.S. Listing Exchange: __________
STATEMENT
OF ADDITIONAL INFORMATION
Dated___________,
2023
This
Statement of Additional Information (the “SAI”) is not a prospectus. It should be read in conjunction with the current prospectus
(the “Prospectus”) for the WisdomTree Bianco Fixed Income Total Return Fund (the “Fund”), a separate series of
WisdomTree Trust (the “Trust”), as such Prospectus may be revised from time to time.
The
current Prospectus for the Fund is dated__________, 2023. Capitalized terms used herein that are not defined have the same meaning as
in the Prospectus, unless otherwise noted. The Fund’s audited financial statements for the most recent fiscal year (when available)
are incorporated in this SAI by reference to the Fund’s most recent Annual Report to Shareholders (File No. 811-21864). You
may obtain a copy of the Fund’s Annual Report at no charge by request to the Fund at the address or phone number noted below.
THE
U.S. SECURITIES AND EXCHANGE COMMISSION (THE “SEC”) HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR PASSED UPON THE ADEQUACY
OF THIS SAI. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE
INFORMATION HEREIN IS NOT COMPLETE AND MAY BE CHANGED. WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SEC IS EFFECTIVE. THIS SAI IS NOT AN OFFER TO SELL THESE SECURITIES AND IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION
IN WHICH THE OFFER OR SALE IS NOT PERMITTED.
A
copy of the Prospectus for the Fund may be obtained, without charge, by calling 1-866-909-9473, visiting www.wisdomtree.com/investments,
or writing to WisdomTree Trust, c/o Foreside Fund Services, LLC, Three Canal Plaza, Suite 100, Portland, Maine 04101.
Table
of Contents
GENERAL
DESCRIPTION OF THE TRUST AND THE FUND
The
Trust was organized as a Delaware statutory trust on December 15, 2005 and is authorized to issue multiple series or portfolios.
The Trust is an open-end management investment company, registered under the Investment Company Act of 1940, as amended (the “1940
Act”). The offering of the Trust’s shares is registered under the Securities Act of 1933, as amended (the “Securities
Act”). The Fund seeks to track the price and yield performance, before fees and expenses, of the Bianco Research Total Return Index
(the “Index”). Bianco Research Advisors LLC is the index provider to the Index.
WisdomTree,
Inc. (“WisdomTree”) is the parent company of WisdomTree Asset Management, Inc. (“WisdomTree Asset Management”
or the “Adviser”), the investment adviser to the Fund. [ ]
(“[ ]” or the “Sub-Adviser”)
is the investment sub-adviser to the Fund. The Adviser and the Sub-Adviser may be referred to together as the “Advisers.”
Foreside Fund Services, LLC serves as the distributor (the “Distributor”) of the shares of the Fund.
The
Fund is an exchange-traded fund (“ETF”). The Fund issues and redeems shares at net asset value per share (“NAV”)
only in large blocks of shares (“Creation Units” or “Creation Unit Aggregations”). These transactions are usually
in exchange for a basket of securities and/or an amount of cash. As a practical matter, only institutions or large investors (typically
market makers or other broker-dealers) purchase or redeem Creation Units. Except when aggregated in Creation Units, shares of the Fund
are not redeemable securities.
Shares
of the Fund are listed on a national securities exchange, such as the [ ] (a “Listing
Exchange”), and trade throughout the day on the Listing Exchange and other secondary markets at market prices that may be greater
than (premium) or less than (discount) their NAV. As in the case of other publicly traded securities, brokers’ commissions on transactions
will be based on commission rates charged by the applicable broker.
The
Trust reserves the right to adjust the prices of shares in the future to maintain convenient trading ranges for investors. Any adjustments
would be accomplished through stock splits or reverse stock splits, which would have no effect on the net assets of the Fund.
“WisdomTree”
is a registered mark of WisdomTree and has been licensed for use by the Trust.
INVESTMENT
STRATEGIES AND RISKS
The
Fund’s investment objective, principal investment strategies and associated risks are described in the Fund’s Prospectus.
The sections below supplement these principal investment strategies and risks and describe the Fund’s additional investment policies
and the different types of investments that may be made by the Fund as a part of its non-principal investment strategies. With respect
to the Fund’s investments, unless otherwise noted, if a percentage limitation on investment is adhered to at the time of investment
or contract, a subsequent increase or decrease as a result of market movement or redemption will not result in a violation of such investment
limitation.
The
Fund intends to qualify each year for treatment as a regulated investment company (a “RIC”) under Subchapter M of the Internal
Revenue Code of 1986, as amended (the “Code”), so that it will not be subject to federal income tax on income and gains that
are timely distributed to Fund shareholders. The Fund will invest its assets, and otherwise conduct its operations, in a manner that
is intended to satisfy the qualifying income, diversification and distribution requirements necessary to establish and maintain eligibility
for such treatment.
The
Fund is considered “non-diversified,” as such term is used in the 1940 Act. Each Fund may become diversified for periods
of time solely as a result of tracking its Index (e.g., changes in weightings of one or more component securities).
GENERAL
RISKS
Changing
economic, political or financial market conditions in one country or geographic region could adversely affect the market value of the
securities held by the Fund in a different country or geographic region due to increasingly interconnected global economies and financial
markets. In addition, certain geopolitical and other events, including environmental events and public health events such as epidemics
and pandemics, may have a global impact and add to instability in world economies and markets generally. As a result, whether or not
the Fund invests in securities of issuers located in or with significant exposure to countries experiencing economic, political, financial
and/or social difficulties, the value and liquidity of the Fund’s investments may be negatively affected by such events. Such market
conditions also may lead to increased regulation of the Fund and the instruments in which the Fund may invest, which may, in turn, increase
the expenses incurred by the Fund and/or affect the Fund’s ability to pursue its investment objective and the Fund’s performance.
The
respiratory disease caused by COVID-19 has spread globally since December 2019, resulting in major disruptions to global markets and
economies, severe losses across certain sectors and industries, significant disruptions to business operations, employee availability
and production and supply chains, and a large expansion of government deficits and debt related to efforts to contain the spread of COVID-19
and mitigate its economic impact. Although the immediate effects of the COVID-19 pandemic, such as business closures, layoffs, travel
restrictions, quarantines, and delays in the delivery of health care services, have begun to dissipate, global markets and economies
continue to contend with the ongoing and long-term impact of the COVID-19 pandemic and the resultant market volatility and economic disruptions.
The speed at which global economies recover, or fail to recover, from the COVID-19 pandemic will affect certain sectors, industries,
and issuers more dramatically than others, which in turn may adversely affect certain Fund investments.
COVID-19,
and other epidemics and pandemics that may arise in the future, could adversely affect the economies of many nations, the global economy,
individual companies and capital markets in ways that cannot be foreseen at the present time. It is impossible to predict the effects
on the Fund of these or similar events and market conditions in the future; however, it is possible that these or similar events and
market conditions could have a significant and adverse effect on the NAV and/or risk profile of the Fund.
An
investment in the Fund should be made with an understanding that the value of the Fund’s portfolio securities may fluctuate (including
significant decreases) in accordance with changes in the financial condition of an issuer or counterparty, changes in specific economic
or political conditions that affect a particular security or issuer, changes in general economic or political conditions, local, regional
or global events such as war, threats of war, acts of terrorism, the spread of infectious illness or other public health issue, recessions,
natural and environmental disasters, systemic market dislocations, supply disruptions, or other events. Such events may disparately impact
a particular issuer or issuers, exchange, country, group of countries, region, market, industry, group of industries, sector or asset
class.
The
Fund may not outperform other investment strategies over short- or long-term market cycles and the Fund may decline in value. Fund shares
may trade above or below their NAV. An investor in the Fund could lose money over short or long periods of time. The price of the securities
and other investments held by the Fund and thus the value of the Fund’s portfolio is expected to fluctuate in accordance with general
economic conditions, interest rates, political events, and other factors. Fixed income securities with short-term maturities are generally
less sensitive to such changes than are fixed-income securities with longer-term maturities. While changes in market conditions and interest
rates generally do not have the same impact on all types of securities and instruments, during a general market downturn, multiple asset
classes may be negatively affected.
Investor
perceptions, confidence (or lack thereof) and/or uncertainty also may impact the value of Fund investments and the value of an investment
in Fund shares. These investor perceptions, confidence (or lack thereof) and/or uncertainty are based on various and unpredictable factors,
including expectations regarding government, economic, monetary and fiscal policies; inflation and interest rates; economic expansion
or contraction; and global or regional political, economic, health or banking crises.
Issuer-specific
conditions also may affect the value of the Fund’s investments. The financial condition of an issuer of a security or counterparty
to a contract may cause it to default or become unable to pay interest or principal due on the security or contract. The Fund cannot
collect interest and principal payments if the issuer or counterparty defaults. Accordingly, the value of an investment in the Fund may
change in response to issuer or counterparty defaults and changes in the credit ratings of the Fund’s portfolio securities.
Although
all of the securities in the Index are generally listed on one or more U.S. or non-U.S. stock exchanges, there can be no guarantee that
a liquid market for such securities will be maintained. The existence of a liquid trading market for certain securities may depend on
whether dealers will make a market in such securities. There can be no assurance that a market will be made or maintained or that any
such market will be or remain liquid. The price at which securities may be sold and the value of the Fund’s shares will be adversely
affected if trading markets for the Fund’s portfolio securities are limited or absent, or if bid/ask spreads are wide.
Events
in the Financials sector have resulted, and may continue to result, in an unusually high degree of volatility in the financial markets,
both domestic and foreign. Domestic and foreign fixed income and equity markets experienced extreme volatility and turmoil starting in
late 2008 and volatility has continued to be experienced in the markets. Issuers that have exposure to the real estate, mortgage and
credit markets have been particularly affected, and well-known financial institutions have experienced significant liquidity and other
problems. Some of these institutions have declared bankruptcy or defaulted on their debt. It is uncertain whether or for how long these
conditions will continue. These events and possible continuing market turbulence may have an adverse effect on Fund performance.
The
Fund may be included in model portfolios developed by WisdomTree Asset Management for use by financial advisors and/or investors. The
market price of shares of the Fund, costs of purchasing or selling shares of the Fund, including the bid/ask spread, and liquidity of
the Fund may be impacted by purchases and sales of the Fund by one or more model-driven investment portfolios.
Authorized
Participants should refer to the section herein entitled “Creation and Redemption of Creation Unit Aggregations” for additional
information that may impact them.
BORROWING.
Although the Fund does not intend to borrow money as part of its principal investment strategies, the Fund may do so to the extent
permitted by the 1940 Act. Under the 1940 Act, the Fund may borrow up to 33% of its net assets, but under normal market conditions, the
Fund does not expect to borrow greater than 10% of the Fund’s net assets. The Fund will borrow only for short-term or emergency
purposes. Borrowing will tend to exaggerate the effect on NAV of any increase or decrease in the market value of the Fund’s portfolio.
Money borrowed will be subject to interest costs that may or may not be recovered by earnings on the securities purchased. The Fund also
may be required to maintain minimum average balances in connection with a borrowing or to pay a commitment or other fee to maintain a
line of credit; either of these requirements would increase the cost of borrowing over the stated interest rate.
Capital
Controls and Sanctions Risk. Economic conditions, such as volatile
currency exchange rates and interest rates, political events, military action, such as the Russian invasion of Ukraine, and other conditions
may, without prior warning, lead to government intervention (including intervention by the U.S. government with respect to foreign governments,
economic sectors, foreign companies and related securities and interests) and the imposition of capital controls and/or sanctions, which
also may include retaliatory actions of one government against another government, such as seizure of assets. Capital controls and/or
sanctions include the prohibition of, or restrictions on, the ability to own or transfer currency, securities or other assets, which
may potentially include derivative instruments related thereto. Countries use these controls to, among other reasons, restrict movements
of capital entering (inflows) and exiting (outflows) their country to respond to certain economic or political conditions. By way of
example, such controls may be applied to short-term capital transactions to counter speculative flows that threaten to undermine the
stability of the exchange trade and deplete foreign exchange reserves. Levies may be placed on profits repatriated by foreign entities
(such as the Fund). Capital controls and/or sanctions also may impact the ability of the Fund to buy, sell, transfer, receive, deliver
(i.e., create and redeem Creation Units) or otherwise obtain exposure to, foreign securities or currency, negatively impact the
value and/or liquidity of such instruments, adversely affect the trading market and price for shares of the Fund (e.g., cause
the Fund to trade at prices materially different from its NAV), and cause the Fund to decline in value. The Fund also may be forced to
sell or otherwise dispose of foreign investments at inopportune times or prices due to sanctions. The type and severity of sanctions
and other similar measures, including counter sanctions and other retaliatory actions, that have been imposed against Russia and other
countries and that may further be imposed could vary broadly in scope, and their impact is impossible to predict. For example, the imposition
of sanctions and other similar measures would likely cause a decline in the value and/or liquidity of securities issued by the sanctioned
country or companies located in or economically tied to the sanctioned country, which in turn may increase market volatility and disruption
in the sanctioned country and throughout the world. Sanctions and other similar measures could significantly delay or prevent the settlement
of securities transactions or their valuation and, as a result, significantly impact the Fund’s liquidity and performance. The
Fund may change its creation and or redemption procedures without notice in response to the imposition of capital controls or sanctions.
There can be no assurance a country in which the Fund invests, whether it is the U.S. or a foreign country, will not impose a form of
capital control or sanction to the possible detriment of the Fund and its shareholders. Sanctions and other similar measures may be in
place for a substantial period of time and enacted with limited advanced notice.
Risks
Related to Russia’s Invasion of Ukraine. Russia’s military invasion of Ukraine initiated in February 2022 and the economic
and diplomatic responses by the United States and other countries have led to increased volatility and uncertainty in the financial markets
and could continue to adversely affect regional and global economies for the foreseeable future. In response to Russia’s actions,
the governments of the United States, Canada, Japan, the European Union, the United Kingdom, and many other countries collectively imposed
heavy and broad-ranging economic sanctions on certain Russian individuals, corporate and banking entities, and other industries and businesses.
The sanctions restrict companies from doing business with Russia and Russian companies, prohibit transactions with the Russian central
bank and other key Russian financial institutions and entities, ban Russian airlines and ships from using many other countries’
airspace and ports, respectively, and place a freeze on certain Russian assets. The sanctions also removed some Russian banks from the
Society for Worldwide Interbank Financial Telecommunications (SWIFT), the electronic network that connects banks globally to facilitate
cross-border payments. In addition, the United States has banned oil and other energy imports from Russia, as well as other popular Russian
exports, such as diamonds, seafood and vodka. The European Union the United Kingdom and other countries have also placed restrictions
on certain oil, energy and luxury good imports from Russia.
These
sanctions, as well as other economic consequences related to the invasion, such as additional sanctions, boycotts, changes in consumer
or purchaser preferences, or cyberattacks on governments, companies or individuals, may further decrease the value and liquidity of certain
Russian securities as well as securities of issuers in other countries that are subject to or otherwise adversely affected by economic
sanctions related to Russia’s invasion of Ukraine, including Russian counter measures. To the extent the Fund has exposure to Russian
investments or investments in countries affected by the invasion or the sanctions, the Fund’s ability to price, buy, sell, receive
or deliver, or receive dividends and interest payments on such investments may be impaired. In certain circumstances, such as when there
is no market for a security or other means of valuing or disposing of a security, the Fund may determine to value the affected security
at zero. In addition, any exposure the Fund may have to counterparties in Russia or in countries affected by the invasion could negatively
affect the Fund’s portfolio. The extent and duration of Russia’s military actions and the repercussions of such actions are
impossible to predict, but could result in continued significant market disruptions, including in the oil and natural gas markets, and
may negatively affect global supply chains, inflation and global growth. Further, an escalation of the military conflict beyond Ukraine’s
borders could result in significant, long-lasting damage to the economies of Eastern and Western Europe as well as the global economy.
These and any related events could significantly and adversely affect the Fund’s performance and the value of an investment in
the Fund, even in the absence of direct exposure to Russian issuers or issuers in other countries affected by the invasion.
CYBERSECURITY
RISK. Investment companies, such as the Fund, and its service providers may be prone to operational and information security risks
resulting from cyber-attacks. Cyber-attacks include, among other behaviors, stealing or corrupting data maintained online or digitally,
denial of service attacks on websites, the unauthorized release of confidential information or various other forms of cybersecurity breaches.
Cyber-attacks affecting the Fund or the Adviser, Sub-Adviser, accountant, custodian, transfer agent, index providers, market makers,
Authorized Participants and other third-party service providers may adversely impact the Fund. For instance, cyber-attacks may interfere
with the processing of Authorized Participant transactions, impact the Fund’s ability to calculate its NAV, cause the release of
private shareholder information or confidential company information, impede trading, subject the Fund to regulatory fines or financial
losses, and cause reputational damage. The Fund could incur extraordinary expenses for cybersecurity risk management purposes, prevention
and/or resolution. Similar types of cybersecurity risks also are present for issuers of securities in which the Fund invests, which could
result in material adverse consequences for such issuers, and may cause the Fund’s investment in such portfolio companies to lose
value.
HIGH
YIELD RISK. The Fund may invest its assets in securities rated lower than Baa3 by Moody’s Investors Services,
Inc. (“Moody’s”), or equivalently rated by S&P Global Ratings (“S&P”) or Fitch. Such securities
are sometimes referred to as “high yield securities” or “junk bonds.” Investing in these securities involves
special risks in addition to the risks associated with investments in higher-rated fixed income securities. While offering a greater
potential for capital appreciation and higher yields, high yield securities typically entail higher price volatility and may be less
liquid than securities with higher ratings. High yield securities may be regarded as predominantly speculative with respect to the issuer’s
continuing ability to meet principal and interest payments. Issuers of securities in default may fail to resume principal or interest
payments, in which case the Fund may lose its entire investment.
LACK
OF DIVERSIFICATION. The Fund is considered to be “non-diversified.” A “non-diversified” classification means
that the Fund is not limited by the 1940 Act with regard to the percentage of its total assets that may be invested in the securities
of a single issuer. As a result, the Fund may invest more of its total assets in the securities of a single issuer or a smaller number
of issuers than if it were classified as a diversified fund. Therefore, the Fund may be more exposed to the risks associated with and
developments affecting an individual issuer or a small number of issuers than a fund that invests more widely, which may have a greater
impact on the Fund’s volatility and performance. However, the Fund intends to satisfy the diversification requirements necessary
to qualify as a RIC under the Code. For more information, see “Taxes” below.
A
discussion of some of the other risks associated with an investment in the Fund is contained in the Fund’s Prospectus.
SPECIFIC
INVESTMENT STRATEGIES
A description
of certain investment strategies and types of investments that may be used by the Fund directly or indirectly through its investment
in the underlying ETFs is set forth below.
BANK
DEPOSITS AND OBLIGATIONS. The Fund may invest in deposits and other obligations of U.S. and non-U.S. banks and financial institutions.
Deposits and obligations of banks and financial institutions include certificates of deposit, time deposits, and bankers’ acceptances.
Certificates of deposit and time deposits represent an institution’s obligation to repay funds deposited with it that earn a specified
interest rate. Certificates of deposit are negotiable certificates, while time deposits are non-negotiable deposits. A banker’s
acceptance is a time draft drawn on and accepted by a bank that becomes a primary and unconditional liability of the bank upon acceptance.
Investments in obligations of non-U.S. banks and financial institutions may involve risks that are different from investments in obligations
of U.S. banks. These risks include future unfavorable political and economic developments, seizure or nationalization of foreign deposits,
currency controls, interest limitations or other governmental restrictions that might affect the payment of principal or interest on
the securities held in the Fund.
COMMERCIAL
PAPER. The Fund may invest in commercial paper. Commercial paper is an unsecured short-term promissory note with a fixed maturity
of no more than 270 days issued by corporations, generally to finance short-term business needs. The commercial paper purchased by the
Fund generally will be rated in the upper two short-term ratings by at least two Nationally Recognized Statistical Rating Organizations
(“NRSROs”) or, if unrated, deemed to be of equivalent quality by the Adviser or the Sub-Adviser. If a security satisfies
the rating requirement upon initial purchase and is subsequently downgraded, the Fund is not required to dispose of the security. In
the event of such an occurrence, the Adviser or the Sub-Adviser will determine what action, including potential sale, is in the best
interest of the Fund. The Fund also may purchase unrated commercial paper provided that such paper is determined to be of comparable
quality by the Adviser or the Sub-Adviser. Commercial paper issuers in which the Fund may invest include securities issued by corporations
without registration under the Securities Act in reliance on the exemption from such registration afforded by Section 3(a)(3) thereof,
and commercial paper issued in reliance on the so-called “private placement” exemption from registration, which is afforded
by Section 4(2) of the Securities Act (“Section 4(2) paper”). Section 4(2) paper is restricted as to disposition under the
federal securities laws in that any resale must similarly be made in an exempt transaction. Section 4(2) paper is normally resold to
other institutional investors through or with the assistance of investment dealers who make a market in Section 4(2) paper, thus providing
liquidity.
CORPORATE
DEBT OBLIGATIONS. The Fund invests in corporate debt obligations. Corporate debt obligations are interest bearing securities in which
the corporate issuer has a contractual obligation to pay interest at a stated rate on specific dates and to repay principal periodically
or on a specified maturity date. Notes, bonds, debentures and commercial paper are the most common types of corporate debt securities.
The primary differences between the different types of corporate debt securities are their maturities and secured or un-secured status.
Commercial paper has the shortest term and is usually unsecured.
The
Fund may invest in rated and unrated debt, subject to the credit quality restrictions set forth in the description of the Fund’s
“Principal Investment Strategies” herein. If a security satisfies the rating requirement upon initial purchase and is subsequently
downgraded, the Fund is not required to dispose of the security. In the event of such an occurrence, WisdomTree Asset Management or the
Sub-Adviser will determine what action, including potential sale, is in the best interest of the Fund. See also “High Yield Risk”
above under “General Risks.”
Corporate
debt may be issued by domestic or foreign companies of all kinds, including those with small-, mid- and large-capitalizations. Corporate
debt may be rated investment-grade or below investment-grade.
Because
of the wide range of types, and maturities, of corporate debt obligations, as well as the range of creditworthiness of its issuers, corporate
debt obligations have widely varying potentials for return and risk profiles. For example, commercial paper issued by a large established
domestic corporation that is rated investment-grade may have a modest return on principal, but carries relatively limited risk. On the
other hand, a long-term corporate note issued by a small foreign corporation from an emerging market country that has not been rated
may have the potential for relatively large returns on principal, but carries a relatively high degree of risk.
Like
most fixed income securities, corporate debt obligations carry both credit risk and interest rate risk. Credit risk is the risk that
the Fund could lose money if the issuer of a corporate debt security is unable to pay interest or repay principal when it is due. Interest
rate risk is the risk that the value of certain corporate debt securities will tend to fall when interest rates rise. In general, corporate
debt securities with longer terms tend to fall more in value when interest rates rise than corporate debt securities with shorter terms.
Aggregate portfolio duration is important to investors as an indication of the Fund’s sensitivity to changes in interest rates.
Funds with higher durations generally are subject to greater interest rate risk. For example, the value of a fund with a portfolio duration
of seven years would be expected to drop by 7% for every 1% increase in interest rates. The Fund’s actual portfolio duration may
be longer or shorter depending upon market conditions.
DEPOSITARY
RECEIPTS. To the extent the Fund invests in stocks of foreign corporations, the Fund’s investment in such stocks may be in
the form of Depositary Receipts or other similar securities convertible into securities of foreign issuers. Depositary Receipts may not
necessarily be denominated in the same currency as the underlying securities into which they may be converted. ADRs are receipts typically
issued by an American bank or trust company that evidence ownership of underlying securities issued by a foreign corporation. European
Depositary Receipts (“EDRs”) are receipts issued in Europe that evidence a similar ownership arrangement. GDRs are receipts
issued throughout the world that evidence a similar arrangement. Non-Voting Depository Receipts (“NVDRs”) are receipts issued
in Thailand that evidence a similar arrangement. Generally, ADRs, in registered form, are designed for use in the U.S. securities markets,
and EDRs, in bearer form, are designed for use in European securities markets. GDRs are tradable both in the United States and in Europe
and are designed for use throughout the world. NVDRs are tradable on the Stock Exchange of Thailand. The Fund will not generally invest
in any unlisted Depositary Receipts or any Depositary Receipt that WisdomTree Asset Management or the Sub-Adviser deems to be illiquid
or for which pricing information is not readily available. In addition, all Depositary Receipts generally must be sponsored; however,
the Fund may invest in unsponsored Depositary Receipts under certain limited circumstances. The issuers of unsponsored Depositary Receipts
are not obligated to disclose material information in the United States, and, therefore, there may be less information available regarding
such issuers and there may not be a correlation between such information and the market value of the Depositary Receipts. The use of
Depositary Receipts may increase tracking error relative to an underlying Index.
DERIVATIVES.
The Fund may use derivative instruments as part of its investment strategy. The Fund will not use derivatives to increase leverage,
and the Fund will provide margin or collateral, as applicable, with respect to investments in derivatives in such amounts as determined
under applicable law, regulatory guidance, or related interpretations.
Generally,
derivatives are financial contracts whose value depends upon, or is derived from, the value of an underlying asset, reference rate or
index, and may relate to bonds, interest rates, currencies, commodities, and related indexes. Examples of derivative instruments include
forward currency contracts, currency and interest rate swaps, currency options, futures contracts, options on futures contracts, swap
agreements and credit-linked notes.
The
Fund may utilize derivatives and, as such, is subject to the risk that a change in U.S. law and related regulations will impact the way
the Fund operates, increase the particular costs of the Fund’s operation and/or change the competitive landscape. In October 2020,
the SEC adopted a new rule, Rule 18f-4 under the 1940 Act, governing a fund’s use of derivatives. The new rule, among other things,
generally requires a fund to adopt a derivatives risk management program, appoint a derivatives risk manager to oversee the program and
comply with an outer limit on fund leverage risk based on value at risk, or “VaR.” Certain funds may be exempted from these
requirements if they use derivatives only to a limited extent and in a limited manner and comply with certain other conditions set forth
in the new rule. The new rule significantly changes the regulatory framework applicable to a fund’s use of derivatives, including by
replacing the existing asset segregation regulatory framework in its entirety. It is not currently clear what impact, if any, the new
rule will have on the availability, liquidity or performance of derivatives.
Forwards,
swaps and certain other derivatives are subject to regulation under The Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank
Act”) in the U.S. and certain non-U.S. jurisdictions. Physically-settled forwards entered into between eligible contract participants,
such as the Fund, are generally subject to fewer regulatory requirements in the U.S. than non-deliverable forwards. Under the Dodd-Frank
Act, non-deliverable forwards are regulated as swaps and are subject to rules requiring central clearing and mandatory trading on an
exchange or facility that is regulated by the Commodity Futures Trading Commission (“CFTC”). Under the Dodd-Frank Act, non-deliverable
forwards, swaps and certain other derivatives traded in the over the counter (“OTC”) market are subject to initial and variation
margin requirements. The Fund’s counterparties may be subject to additional regulatory requirements and/or apply the regulatory
requirements more broadly than is required for administrative and other reasons, including, for example, by (i) applying the stricter
regulatory requirements to physically-settled forwards that are applicable to non-deliverable forwards even though the stricter rules
are not technically applicable to such physically-settled forwards; and (ii) applying smaller thresholds for the delivery of a variation
margin than required. As such, a fund using currency forwards may need to hold additional cash to meet regulatory requirements, which
may include raising cash by selling securities and/or obtaining cash through other arrangements in order to meet margin requirements,
which may, among other potential consequences, cause increased index tracking error (if applicable), cause an increase in expense ratio,
lead to the realization of taxable gains, increase costs to the Fund of trading or otherwise affect returns to investors in the Fund.
EQUITY
SECURITIES. The Fund invests in ETFs (as described below), which are equity securities, and the Fund may also invest in other types of equity securities. Equity securities, such as the common stocks of an issuer, are subject to stock
market fluctuations and therefore may experience volatile changes in value as market conditions, consumer sentiment or the financial
condition of the issuers change. A decrease in value of the equity securities in the Fund’s portfolio also may cause the value
of the Fund’s shares to decline.
EXCHANGE-TRADED
PRODUCTS. The Fund may invest in exchange-traded products (“ETPs”), which include ETFs registered under the 1940 Act,
exchange-traded commodity trusts and exchange-traded notes, as well as instruments that provide exposure to ETPs. The Adviser may receive
management or other fees from the ETPs in which the Fund may invest (“Affiliated ETPs”), as well as a management fee for
managing the Fund. It is possible that a conflict of interest among the Fund and Affiliated ETPs could affect how the Adviser fulfills
its fiduciary duties to the Fund and the Affiliated ETPs. Although the Adviser takes steps to address the conflicts of interest, it is
possible that the conflicts could impact the Fund. The Fund may invest in new ETPs or ETPs that have not yet established a deep trading
market at the time of investment. Shares of such ETPs may experience limited trading volume and less liquidity, in which case the spread
(the difference between bid price and ask price) may be higher.
Exchange-Traded
Funds. The Fund is expected to invest in ETFs. ETFs are investment companies that trade like stocks on a securities exchange at market
prices rather than NAV. As a result, ETF shares may trade at a price greater than NAV (premium) or less than NAV (discount). The Fund,
if investing in an ETF, indirectly bears fees and expenses charged by the ETF in addition to the Fund’s direct fees and expenses.
Investments in ETFs also are subject to brokerage and other trading costs that could result in greater expenses for the Fund.
Exchange-Traded
Notes. The Fund may invest in exchange-traded notes (“ETNs”). ETNs generally are senior, unsecured, unsubordinated debt
securities issued by a sponsor, such as an investment bank. ETNs are traded on exchanges and the returns are linked to the performance
of market indexes. In addition to trading ETNs on exchanges, investors may redeem ETNs directly with the issuer on a periodic basis,
typically in a minimum amount of 50,000 units, or hold the ETNs until maturity. The value of an ETN may be influenced by time to maturity,
level of supply and demand for the ETN, volatility and lack of liquidity in the underlying market, changes in the applicable interest
rates, and economic, legal, political or geographic events that affect the referenced market. Because ETNs are debt securities, they
are subject to credit risk. If the issuer has financial difficulties or goes bankrupt, the Fund may not receive the return it was promised.
If a rating agency lowers an issuer’s credit rating, the value of the ETN may decline and a lower credit rating reflects a greater
risk that the issuer will default on its obligation. There may be restrictions on the Fund’s right to redeem its investment in
an ETN. There are no periodic interest payments for ETNs, and principal is not protected. The Fund’s decision to sell its ETN holdings
may be limited by the availability of a secondary market.
FINANCIALS
SECTOR INVESTMENTS. The Fund may engage in transactions with or invest in companies that are considered to be in the financials sector,
including commercial banks, brokerage firms, diversified financial services, a variety of firms in all segments of the insurance industry
(such as multi-line, property and casualty, and life insurance) and real estate-related companies. There can be no guarantee that these
strategies may be successful. The Fund may lose money as a result of defaults or downgrades within the financials sector.
Events
in the financials sector have resulted in increased concerns about credit risk and exposure. Well-known financial institutions have experienced
significant liquidity and other problems and have defaulted on their debt obligations. Issuers that have exposure to real estate, mortgage
and credit markets have been particularly affected. It is uncertain whether or how long these conditions will continue. These events
and possible continuing market turbulence may have an adverse effect on Fund performance.
Rule
12d3-1 under the 1940 Act limits the extent to which a fund may invest in the securities of any one company that derives more than 15%
of its revenues from brokerage, underwriting or investment management activities. The Fund may purchase securities of an issuer that
derived more than 15% of its gross revenues in its most recent fiscal year from securities-related activities, subject to the following
conditions: (1) the purchase cannot cause more than 5% of the Fund’s total assets to be invested in securities of that issuer; (2) for
any equity security, the purchase cannot result in the Fund owning more than 5% of the issuer’s outstanding securities in that class;
and (3) for a debt security, the purchase cannot result in the Fund owning more than 10% of the outstanding principal amount of the issuer’s
debt securities. The Fund, in seeking to comply with this rule, may experience greater index tracking error because the Index is not
subject to the rule.
In
applying the gross revenue test, an issuer’s own securities-related activities must be combined with its ratable share of securities-related
revenues from enterprises in which it owns a 20% or greater voting or equity interest. All of the above percentage limitations, as well
as the issuer’s gross revenue test, are applicable at the time of purchase. With respect to warrants, rights, and convertible securities,
a determination of compliance with the above limitations shall be made as though such warrant, right, or conversion privilege had been
exercised. The Fund will not be required to divest its holdings of a particular issuer when circumstances subsequent to the purchase
cause one of the above conditions to not be met. The purchase of a general partnership interest in a securities-related business is prohibited.
FIXED
INCOME SECURITIES. The Fund invests in fixed income securities, such as corporate debt, notes and bonds, and/or instruments related
to fixed income securities. Fixed income securities change in value in response to interest rate changes and other factors, such as the
perception of the issuer’s creditworthiness. For example, the value of fixed income securities will generally decrease when interest
rates rise, which may cause the value of the Fund to decrease. In addition, investments in fixed income securities with longer maturities
will generally fluctuate more in response to interest rate changes. The capacity of traditional dealers to engage in fixed income trading
has not kept pace with the bond market’s growth and dealer inventories of bonds are at or near historic lows relative to market
size. Because market makers provide stability to fixed income markets, the significant reduction in dealer inventories could lead to
decreased liquidity and increased volatility, which may become exacerbated during periods of economic or political stress. In addition,
liquidity risk may be magnified in a rising interest rate environment in which investor redemptions (or selling of fund shares in the
secondary market) from fixed income funds may be higher than normal.
FUTURE
DEVELOPMENTS. The Trust’s Board of Trustees (the “Board”) may, in the future, authorize the Fund to invest in securities
contracts and investments other than those listed in this SAI and in the Fund’s Prospectus, provided they are consistent with the
Fund’s investment objective and do not violate any investment restrictions or policies.
ILLIQUID
INVESTMENTS. Although the Fund does not intend to do so, as a matter of policy, the Fund may invest up to an aggregate amount of
15% of its net assets in illiquid investments. Illiquid investments include securities subject to contractual or other restrictions on
resale and other instruments that lack readily available markets to the extent the Adviser or Sub-Adviser has not deemed such securities
to be liquid. An illiquid investment is any investment that the Fund reasonably expects cannot be sold or disposed of in current market
conditions in seven calendar days or less without significantly changing the market value of the investment. The liquidity of a security
will be determined based on the relevant market, trading and investment specific conditions. Illiquid investments include securities
subject to contractual or other restrictions on resale and other instruments that lack readily available markets to the extent the Adviser
or Sub-Adviser has not deemed such securities to be liquid. The inability of the Fund to dispose of illiquid or not readily marketable
investments readily or at a reasonable price could impair the Fund’s ability to raise cash for redemptions or other purposes. The
liquidity of securities purchased by the Fund which are eligible for resale pursuant to Rule 144A, except for certain 144A bonds, will
be monitored by the Fund on an ongoing basis. In the event that more than 15% of the Fund’s net assets are invested in illiquid
investments, the Fund, in accordance with Rule 22e-4(b)(1)(iv) of the 1940 Act, will report the occurrence to both the Board and the
SEC and seek to reduce its holdings of illiquid investments within a reasonable period of time.
INFLATION-LINKED
BONDS. The Fund may invest in inflation-indexed bonds. Inflation-indexed bonds are fixed income securities whose principal value
is periodically adjusted according to the rate of inflation. Repayment of the original bond principal upon maturity (as adjusted for
inflation) is guaranteed in the case of U.S. Treasury inflation-indexed bonds. However, the current market value of the bonds is not
guaranteed, and will fluctuate with market conditions. Investments in other inflation-linked bonds may not provide a similar guarantee
and the principal amount repaid could be less than the original principal if inflation falls over the period.
The
value of inflation-indexed bonds is expected to change in response to changes in real interest rates. Real interest rates in turn are
tied to the relationship between nominal interest rates and the rate of inflation. Therefore, if the rise in inflation exceeds the rise
in nominal rates, real rates are likely to decline, leading to an increase in the market value of the bonds. Conversely, if the rise
in nominal interest rates outpaces the pickup in the rate of inflation, real interest might rise, generating a decline in the market
value of the inflation-linked security.
The
periodic adjustment of U.S. inflation-indexed bonds generally is tied to the Consumer Price Index for Urban Consumers
(“CPI-U”), which is calculated monthly by the U.S. Bureau of Labor Statistics. The CPI-U is a measurement of changes in
the cost of living, made up of components such as housing, food, transportation and energy. Inflation-indexed bonds issued by a
foreign government are generally adjusted to reflect a comparable country or regional inflation measure calculated by that
government. There can be no assurance that the CPI-U or any foreign inflation index will accurately measure the real rate of
inflation in the prices of goods and services. Moreover, there can be no assurance that the rate of inflation in a foreign country
will be correlated to the rate of inflation in the United States. Any increase in the principal amount of an inflation-indexed bond
will be considered taxable ordinary income, even though investors do not receive their principal until maturity. Inflation-linked
bonds held by the Fund may experience an increase in original issue value due to inflation-linked adjustments. The inflation-linked
growth in the value of these bonds may be reflected in the Fund’s gross income. While inflation-adjusted growth does not
result in cash payments to the Fund, the Fund may be required to make distributions to shareholders for any increase in value in
excess of the cash actually received by the Fund during the taxable year. The Fund may be required to sell portfolio securities to
make these distribution payments. This may lead to higher transaction costs, losses from sale during unfavorable market conditions
and higher capital gains taxes. If deflation-linked adjustments decrease the value of inflation-linked bonds held by the Fund,
income distributions previously made by the Fund during the taxable year may be deemed a return of capital.
INVESTMENT
COMPANY SECURITIES. The Fund is expected to invest in the securities of other investment companies (including money market funds
and certain ETPs) as well as instruments to provide exposure to other investment companies. The 1940 Act generally prohibits a fund from
acquiring more than 3% of the outstanding voting shares of an investment company and limits such investments to no more than 5% of the
fund’s total assets in any single investment company and no more than 10% in any combination of two or more investment companies.
The Fund can invest in other investment companies beyond these statutory limits in pursuit of its investment objective to the extent
it enters into agreements and abides by certain conditions of Rule 12d1-4 under the 1940 Act. The Fund may purchase or otherwise invest
in shares of affiliated ETFs and money market funds.
MONEY
MARKET INSTRUMENTS. The Fund may invest a portion of its assets in high-quality money market instruments on an ongoing basis to provide
liquidity or for other reasons. The instruments in which the Fund may invest include: (i) short-term obligations issued by the U.S.
government; (ii) negotiable certificates of deposit (“CDs”), fixed time deposits and bankers’ acceptances of U.S.
and foreign banks and similar institutions; (iii) commercial paper rated at the date of purchase “Prime-1” by Moody’s
or “A-1+” or “A-1” by Standard & Poor’s (“S&P”) or, if unrated, of comparable quality
as determined by the Fund; and (iv) repurchase agreements. CDs are short-term negotiable obligations of commercial banks. Time deposits
are non-negotiable deposits maintained in banking institutions for specified periods of time at stated interest rates. Banker’s
acceptances are time drafts drawn on commercial banks by borrowers, usually in connection with international transactions.
MORTGAGE-BACKED
AND ASSET-BACKED SECURITIES. The Fund may invest in mortgage-backed and asset-backed securities. Mortgage-backed securities are secured
(or backed) by pools of commercial or residential mortgages. Asset-backed securities are secured (or backed) by other types of assets,
such as automobile loans, installment sale contracts, credit card receivables or other similar assets. Mortgage-backed and asset-backed
securities are issued by entities such as Ginnie Mae, Fannie Mae, the Federal Home Loan Mortgage Corporation, commercial banks, trusts,
special purpose entities, finance companies, finance subsidiaries of industrial companies, savings and loan associations, mortgage banks
and investment banks. Investing in mortgage-backed and asset-backed securities is subject to credit risk and interest rate risk. They
also are subject to the risk of prepayment, which can change the nature and extent of the Fund’s interest rate risk. The market
for mortgage-backed securities may not be liquid under all interest rate scenarios, which may prevent the Fund from selling such securities
held in its portfolio at times or prices that it desires.
MUNICIPAL
SECURITIES. The Fund may invest in municipal securities (including taxable municipal securities), the interest payments of which
are subject to U.S. federal income tax. Such investments may include securities issued in the U.S. market by U.S. states and territories,
municipalities and other political subdivisions, agencies, authorities and instrumentalities of states and multi-state agencies or authorities.
The municipal securities which the Fund may purchase also include general obligation bonds and limited obligation bonds (or revenue bonds),
including industrial development bonds issued pursuant to former U.S. federal tax law. General obligation bonds are obligations involving
the credit of an issuer possessing taxing power and are payable from such issuer’s general revenues and not from any particular
source. Limited obligation bonds are payable only from the revenues derived from a particular facility or class of facilities or, in
some cases, from the proceeds of a special excise or other specific revenue source. Industrial development bonds generally also are revenue
bonds and thus are not payable from the issuer’s general revenues. The credit and quality of industrial development bonds are usually
related to the credit of the corporate user of the facilities. Payment of interest on and repayment of principal of such bonds is the
responsibility of the corporate user (and/or any guarantor). The Fund may invest in private activity bonds, which are bonds issued by
or on behalf of public authorities to obtain funds to provide privately operated housing facilities, airport, mass transit or port facilities,
sewage disposal, solid waste disposal or hazardous waste treatment or disposal facilities and certain local facilities for water supply,
gas or electricity. Other types of private activity bonds, the proceeds of which are used for the construction, equipment, repair or
improvement of privately operated industrial or commercial facilities, may constitute municipal securities, although the current U.S.
federal tax laws place substantial limitations on the size of such issues.
NON-U.S.
SECURITIES. The Fund may invest in non-U.S. securities and/or instruments that provide exposure to such securities or instruments.
Investments in non-U.S. securities involve certain risks that may not be present in investments in U.S. securities. For example, non-U.S.
securities may be subject to currency risks or to foreign government taxes. There may be less information publicly available about a
non-U.S. issuer than about a U.S. issuer, and a foreign issuer may or may not be subject to uniform accounting, auditing and financial
reporting standards and practices comparable to those in the U.S. Other risks of investing in such securities include political or economic
instability in the country involved, the difficulty of predicting international trade patterns and the possibility of imposition of exchange
controls. The prices of such securities may be more volatile than those of domestic securities. With respect to certain foreign countries,
there is a possibility of expropriation of assets or nationalization, imposition of withholding taxes on dividend or interest payments,
difficulty in obtaining and enforcing judgments against foreign entities or diplomatic developments which could affect investment in
these countries. Investor protection regimes in foreign countries also may not be comparable to that in the U.S. For example, it may
be more difficult to bring claims common in the U.S., including securities class action and fraud claims, or for U.S. regulators to bring
enforcement actions against issuers in foreign countries. As a result, the Fund and its shareholders may encounter substantial difficulties
in obtaining and enforcing judgments against individuals residing outside of the U.S. and companies domiciled outside of the U.S. This
risk may be heightened in emerging market countries where legal regimes are generally less developed and legal protections governing
private and foreign investments may not yet exist or be in the early stages of development. Losses and other expenses may be incurred
in converting between various currencies in connection with purchases and sales of foreign securities.
Non-U.S.
securities markets may not be as developed or efficient as, and may be more volatile than, those in the U.S. While the volume of shares
traded on non-U.S. securities markets generally has been growing, such markets usually have substantially less volume than U.S. markets.
Therefore, the Fund’s investment in non-U.S. securities may be less liquid and subject to more rapid and erratic price movements
than comparable securities listed for trading on U.S. exchanges. Non-U.S. equity securities may trade at price/earnings multiples higher
than comparable U.S. securities and such levels may not be sustainable. There may be less government supervision and regulation of foreign
stock exchanges, brokers, banks and listed companies abroad than in the U.S. Moreover, settlement practices for transactions in foreign
markets may differ from those in U.S. markets. Such differences may include delays beyond periods customary in the U.S. and practices,
such as delivery of securities prior to receipt of payment, that increase the likelihood of a failed settlement, which can result in
losses to the Fund. The value of non-U.S. investments and the investment income derived from them also may be affected unfavorably by
changes in currency exchange control regulations. Foreign brokerage commissions, custodial expenses and other fees also are generally
higher than for securities traded in the U.S. This may cause the Fund to incur higher portfolio transaction costs than domestic equity
funds. Fluctuations in exchange rates also may affect the earning power and asset value of the foreign entity issuing a security, even
one denominated in U.S. dollars. Dividend and interest payments may be repatriated based on the exchange rate at the time of disbursement,
and restrictions on capital flows may be imposed.
Set
forth below for certain markets in which the Fund may invest, consistent with its principal investment strategy, are brief descriptions
of some of the conditions and risks in each such market.
Investments
in Emerging Markets Securities. Investments in emerging market issuers are subject to additional risks that may not be present for
U.S. investments or investments in more developed non-U.S. markets. Such risks may include: (i) greater market volatility; (ii) lower
trading volume; (iii) greater social, political and economic uncertainty; (iv) governmental controls on foreign investments and limitations
on repatriation of invested capital; (v) the risk that companies may be held to lower disclosure, corporate governance, auditing and
financial reporting standards than companies in more developed markets; and (vi) the risk that there may be less protection of property
rights than in other countries; and (vii) limited investor rights and legal or practical remedies. Emerging markets are generally less
liquid and less efficient than developed securities markets. Some emerging markets have experienced and may continue to experience high
inflation rates, currency devaluations and economic recessions. Each of these factors may cause the Fund to decline in value. Unanticipated
political or social developments may result in sudden and significant investment losses, and may affect the ability of governments and
government agencies in these markets to meet their debt obligations. These and other factors could have a negative impact on the Fund’s
performance and increase the volatility of an investment in the Fund.
Investments
in Europe. Most developed countries in Western Europe are members of the European Union (“EU”), many also are members
of the European Economic and Monetary Union (“EMU”), and most EMU members are part of the euro zone, a group of EMU countries
that share the euro as their common currency. Members of the EMU must comply with restrictions on inflation rates, deficits, debt levels,
and fiscal and monetary controls. The implementation of any of these EMU restrictions or controls, as well as any of the following events
in Europe, may have a significant impact on the economies of some or all European countries: (i) the default or threat of default by
an EU member country on its sovereign debt, (ii) economic recession in an EU member country, (iii) changes in EU or governmental regulations
on trade, (iv) changes in currency exchange rates of the euro, the British pound, and other European currencies, (v) changes in the supply
and demand for European imports or exports, and (vi) high unemployment rates. In the past, European financial markets have recently experienced
volatility and adverse trends due to concerns about economic downturns or rising government debt levels in several European countries,
including Greece, Ireland, Italy, Portugal and Spain. These concerns have also negatively affected the euro’s exchange rate. A
significant decline in the value of the euro may produce unpredictable effects on trade and commerce generally and could lead to increased
volatility in financial markets worldwide. In the event that an EMU member defaults on its sovereign debt or exits from the EMU, especially
if either such event occurs in a disorderly manner, the default or exit may adversely affect the value of the euro as well as the performance
of other European economies and issuers.
On
January 31, 2020, the United Kingdom formally exited the EU. During an 11-month transition period, the United Kingdom, including its
businesses and people, continued to abide by applicable EU rules, honored the United Kingdom’s trade relationships with EU countries,
and prepared for the new post-Brexit rules which took effect on January 1, 2021. The impact of Brexit on the United Kingdom, the EU and
global markets remains unclear and will depend largely upon the United Kingdom’s ability to negotiate favorable terms with the
EU with respect to trade and market access. Brexit also may impact each of these markets should it lead to the creation of divergent
national laws and regulations that produce new legal regimes and unpredictable tax consequences. As a result of the uncertain consequences
of Brexit, the economies of the United Kingdom and Europe as well as the broader global economy could be significantly impacted, which
may result in increased volatility and illiquidity, and potentially lower economic growth on markets in the United Kingdom, Europe and
globally that could potentially have an adverse effect on the value of the Fund’s investments.
In
addition, the extent and duration of Russia’s military invasion of Ukraine, initiated in February 2022, and the broad-ranging economic
sanctions levied against Russia by the United States, the European Union, the United Kingdom, and other countries, remain unknown, but
these events could have a significant adverse impact on Europe’s overall economy. For more information on the war in Ukraine and
its impact on Europe, see “Capital Controls and Sanctions Risk” herein.
REAL
ESTATE INVESTMENT TRUSTS. The Fund may invest in the securities of real estate investment trusts (“REITs”) to the
extent allowed by law. Risks associated with investments in securities of REITs include decline in the value of real estate, risks related
to general and local economic conditions, overbuilding and increased competition, increases in property taxes and operating expenses,
changes in zoning laws, casualty or condemnation losses, variations in rental income, changes in neighborhood values, the appeal of properties
to tenants, and increases in interest rates. In addition, equity REITs may be affected by changes in the values of the underlying property
owned by the trusts, while mortgage REITs may be affected by the quality of credit extended. REITs are dependent upon management skills,
may not be diversified and are subject to the risks of financing projects. REITs also are subject to heavy cash-flow dependency, defaults
by borrowers, self-liquidation and the possibility of failing to maintain exemption from the 1940 Act, and, for U.S. REITs, the possibility
of failing to qualify for the favorable U.S. federal income tax treatment available to U.S. REITs under the Code. If an issuer of debt
securities collateralized by real estate defaults, it is conceivable that the REITs could end up holding the underlying real estate.
REPURCHASE
AGREEMENTS. The Fund may enter into repurchase agreements with counterparties that are deemed to present acceptable credit risks.
A repurchase agreement is a transaction in which the Fund purchases securities or other obligations from a bank or securities dealer
(or its affiliate) and simultaneously commits to resell them to a counterparty at an agreed-upon date or upon demand and at a price reflecting
a market rate of interest unrelated to the coupon rate or maturity of the purchased obligations. This is designed to result in a fixed
rate of return for the Fund insulated from market fluctuations during the holding period. Because they are collateralized by securities,
including mortgage-backed securities, repurchase agreements are subject to market and credit risk. A repurchase agreement maturing in
more than seven days may be considered an illiquid investment. The Fund maintains custody of the underlying obligations prior to their
repurchase, either through its regular custodian or through a special “tri-party” custodian or sub-custodian that maintains
separate accounts for both the Fund and its counterparty. Thus, the obligation of the counterparty to pay the repurchase price on the
date agreed to or upon demand is, in effect, secured by such obligations. Repurchase agreements carry certain risks not associated with
direct investments in securities, including a possible decline in the market value of the underlying obligations. If their value becomes
less than the repurchase price, plus any agreed-upon additional amount, the counterparty must provide additional collateral so that at
all times the collateral is at least equal to the repurchase price plus any agreed-upon additional amount. The difference between the
total amount to be received upon repurchase of the obligations and the price that was paid by the Fund upon acquisition is accrued as
interest and included in its net investment income. Repurchase agreements involving obligations other than U.S. government securities
(such as commercial paper and corporate bonds) may be subject to special risks and may not have the benefit of certain protections in
the event of the counterparty’s insolvency. If the seller or guarantor becomes insolvent, the Fund may suffer delays, costs and
possible losses in connection with the disposition of collateral.
REVERSE
REPURCHASE AGREEMENTS. The Fund may enter into reverse repurchase agreements, which involve the sale of securities held by the Fund
subject to its agreement to repurchase the securities at an agreed-upon date or upon demand and at a price reflecting a market rate of
interest. Reverse repurchase agreements are subject to the Fund’s limitation on borrowings and may be entered into only with banks
or securities dealers or their affiliates. While a reverse repurchase agreement is outstanding, the Fund will, for all of its reverse
repurchase agreements, either (i) consistent with Section 18 of the 1940 Act, maintain asset coverage of at least 300% of the value of
the repurchase agreement or (ii) treat the reverse repurchase agreement as a derivatives transaction for purposes of Rule 18f-4, including,
as applicable, the VaR-based limit on leverage risk.
Reverse
repurchase agreements involve the risk that the buyer of the securities sold by the Fund might be unable to deliver them when the Fund
seeks to repurchase. If the buyer of securities under a reverse repurchase agreement files for bankruptcy or becomes insolvent, the buyer
or trustee or receiver may receive an extension of time to determine whether to enforce the Fund’s obligation to repurchase the
securities, and the Fund’s use of the proceeds of the reverse repurchase agreement may effectively be restricted pending such decision.
SECURITIES
LENDING. The Fund may lend portfolio securities to certain creditworthy borrowers, including the Fund’s securities lending
agent. Loans of portfolio securities provide the Fund with the opportunity to earn additional income on the Fund’s portfolio securities.
All securities loans will be made pursuant to agreements requiring the loans to be continuously secured by collateral in cash, or money
market instruments, money market funds or U.S. government securities at least equal at all times to the market value of the loaned securities.
The borrower pays to the Fund an amount equal to any dividends or interest received on loaned securities. The Fund retains all or a portion
of the interest received on investment of cash collateral or receive a fee from the borrower. Lending portfolio securities involves risks
of delay in recovery of the loaned securities or in some cases loss of rights in the collateral should the borrower fail financially.
Furthermore, because of the risks of delay in recovery, the Fund may lose the opportunity to sell the securities at a desirable price.
The Fund will generally not have the right to vote securities while they are being loaned.
SOVEREIGN
DEBT OBLIGATIONS. The Fund may invest in sovereign debt obligations. Sovereign debt obligations involve special risks that are not
present in corporate debt obligations. The foreign issuer of the sovereign debt or the foreign governmental authorities that control
the repayment of the debt may be unable or unwilling to repay principal or interest when due, and the Fund may have limited recourse
in the event of a default. During periods of economic uncertainty, the market prices of sovereign debt, and the Fund’s net asset
value, to the extent it invests in such securities, may be more volatile than prices of debt obligations of U.S. issuers. In the past,
certain foreign countries have encountered difficulties in servicing their debt obligations, withheld payments of principal and interest
and declared moratoria on the payment of principal and interest on their sovereign debt. A sovereign debtor’s willingness or ability
to repay principal and pay interest in a timely manner may be affected by, among other factors, its cash flow situation, the extent of
its foreign currency reserves, the availability of sufficient foreign exchange, the relative size of the debt service burden, the sovereign
debtor’s policy toward principal international lenders and local political constraints. Sovereign debtors also may be dependent
on expected disbursements from foreign governments, multilateral agencies and other entities to reduce principal and interest arrearages
on their debt. The failure of a sovereign debtor to implement economic reforms, achieve specified levels of economic performance or repay
principal or interest when due may result in the cancellation of third-party commitments to lend funds to the sovereign debtor, which
may further impair such debtor’s ability or willingness to service its debts.
U.S.
GOVERNMENT SECURITIES. The Fund invests in obligations issued or guaranteed by the U.S. Treasury or the agencies or instrumentalities
of the U.S. government. Such obligations may be short-, intermediate- or long-term. The Fund also may purchase intermediate and long-term
obligations issued or guaranteed by the U.S. Treasury or the agencies or instrumentalities of the U.S. government. U.S. government securities
are obligations of, or guaranteed by, the U.S. government, its agencies or government-sponsored enterprises. U.S. government securities
are subject to market and interest rate risk, and may be subject to varying degrees of credit risk. U.S. government securities include
inflation-indexed fixed income securities, such as U.S. Treasury Inflation Protected Securities (TIPS). U.S. government securities include
zero coupon securities, which tend to be subject to greater market risk than interest-paying securities of similar maturities.
PROXY
VOTING POLICY
The
Trust has adopted as its proxy voting policies for the Fund the proxy voting guidelines of the Fund’s Sub-Adviser. The Trust has
delegated to the Sub-Adviser the authority and responsibility for voting proxies on the portfolio securities held by the Fund. The remainder
of this section discusses the Fund’s proxy voting guidelines and the Sub-Adviser’s role in implementing such guidelines.
The
Sub-Adviser has adopted a Proxy Voting Policy, related procedures, and voting guidelines which are applied to those client accounts over
which it has been delegated the authority to vote proxies. In voting proxies, the Sub-Adviser seeks to act in the best interest of its
clients and in accordance with its fiduciary duties. Specific votes depend on the particular facts and circumstances of each proxy vote.
The Sub-Adviser generally votes in support of decisions reached by independent boards of directors. The policy establishes additional
guidance to promote independence, alignment of compensation with long-term performance, and prudent fiscal management with respect to
votes on specific matters, such as individual board elections, executive compensation, and capitalization. The Sub-Adviser seeks to avoid
material conflicts of interest through the application of detailed predetermined proxy voting guidelines in an objective and consistent
manner across client accounts, based on internal and external research and recommendations provided by a third-party vendor, and without
consideration of any client relationship factors.
A
complete copy of the Sub-Adviser’s proxy voting policy may be obtained by calling 1-866-909-9473 or by writing to: WisdomTree Trust,
c/o Foreside Fund Services, LLC, Three Canal Plaza, Suite 100, Portland, Maine 04101.
The
Trust is required to disclose annually the Fund’s complete proxy voting record on Form N-PX covering the period from July 1 of
one year through June 30 of the next year and to file Form N-PX with the SEC no later than August 31 of each year. The current Form N-PX
for the Fund may be obtained at no charge upon request by calling 1-866-909-9473 or by visiting the SEC’s website at www.sec.gov.
PORTFOLIO
HOLDINGS DISCLOSURE POLICIES AND PROCEDURES
The
Trust has adopted a Portfolio Holdings Policy (the “Policy”) designed to govern the disclosure of Fund portfolio
holdings and the use of material non-public information about Fund holdings. The Policy applies to all officers, employees, and
agents of the Fund, including the Advisers. The Policy is designed to ensure that the disclosure of information about the
Fund’s portfolio holdings is consistent with applicable legal requirements and otherwise in the best interest of the Fund. As
an ETF, information about the Fund’s portfolio holdings is made available each Business Day in accordance with the provisions
of any Order of the SEC applicable to the Fund, regulations of the Listing Exchange and other applicable SEC regulations, orders and
no-action relief. A “Business Day” with respect to the Fund is any day on which its respective Listing Exchange is open
for business. As of the date of this SAI, the Listing Exchange observes the following holidays: New Year’s Day, Martin Luther
King, Jr. Day, Presidents’ Day, Good Friday, Memorial Day, Juneteenth National Independence Day, Independence Day, Labor Day,
Thanksgiving Day, and Christmas Day. This information is used in connection with the creation and redemption process and is
disseminated on a daily basis through the facilities of the Listing Exchange, the National Securities Clearing Corporation
(“NSCC”) and/or third-party service providers.
Daily
access to the Fund’s portfolio holdings with no lag time is permitted to personnel of the Advisers, the Distributor and the Fund’s
administrator (the “Administrator”), custodian and accountant and other agents or service providers of the Trust who have
need of such information in connection with the ordinary course of their respective duties to the Fund. The Fund’s Chief Compliance
Officer (“CCO”) may authorize disclosure of portfolio holdings.
The
Fund will disclose its complete portfolio holdings online at www.wisdomtree.com/investments. Online disclosure of such holdings is publicly
available at no charge.
The
Fund also will disclose its complete portfolio holdings schedule in public filings with the SEC on a quarterly basis, based on the Fund’s
fiscal year end, within sixty (60) days of the end of the quarter, and will provide that information to shareholders, as required
by federal securities laws and regulations thereunder.
No
person is authorized to disclose the Fund’s portfolio holdings or other investment positions except in accordance with the Policy.
The Board reviews the implementation of the Policy on a periodic basis.
INDEX
DESCRIPTION
A
description of the Index on which the Fund’s investment strategy is based is provided in the Fund’s Prospectus under “Principal
Investment Strategies of the Fund” with certain additional details provided below. Additional information about the Index, including
the components and weightings of the Index, as well as the Index methodology, which contains the rules that govern inclusion and weighting
in the Index, is available on the website of the Index provider, Bianco Research Advisors LLC (the “Index Provider”).
Index
Rebalance. The Index is reconstituted and rebalanced at the end of each month.
Index
Components. The approximate number of components of the Index is [11] as of the Fund’s inception date.
INVESTMENT
LIMITATIONS
The
following fundamental investment policies and limitations supplement those set forth in the Fund’s Prospectus. Unless otherwise
noted, whenever a fundamental investment policy or limitation states a maximum percentage of the Fund’s assets that may be invested
in any security or other asset, or sets forth a policy regarding quality standards, such standard or percentage limitation will be determined
immediately after and as a result of the Fund’s acquisition of such security or other asset. Accordingly, other than with respect
to the Fund’s limitations on borrowings, any subsequent change in values, net assets, or other circumstances will not be considered
when determining whether the investment complies with the Fund’s investment policies and limitations.
The
Fund’s fundamental investment policies cannot be changed without the approval of the holders of a majority of the Fund’s
outstanding voting securities as defined under the 1940 Act. The Fund, however, may change the non-fundamental investment policies described
below, its investment objective, and its underlying Index, if applicable, without a shareholder vote, provided that it obtains Board
approval and notifies its shareholders with at least sixty (60) days’ prior written notice of any such change.
Fundamental
Policies. The following investment policies and limitations are fundamental and may NOT be changed without shareholder approval.
The
Fund, as a fundamental investment policy, may not:
Senior
Securities
Issue
senior securities, except as permitted under the 1940 Act.
Borrowing
Borrow
money, except as permitted under the 1940 Act.
Underwriting
Act
as an underwriter of another issuer’s securities, except to the extent that the Fund may be considered an underwriter within the
meaning of the Securities Act in the disposition of portfolio securities.
Concentration
Purchase
the securities of any issuer (other than securities issued or guaranteed by the U.S. Government or any of its agencies or instrumentalities)
if, as a result, more than 25% of the Fund’s net assets would be invested in the securities of companies whose principal business
activities are in the same industry, except that the Fund will invest more than 25% of its net assets in securities of the same industry
to approximately the same extent that the Fund’s underlying Index concentrates in the securities of a particular industry or group
of industries.
Real
Estate
Purchase
or sell real estate unless acquired as a result of ownership of securities or other instruments (but this shall not prevent the Fund
from investing in securities or other instruments backed by real estate, real estate investment trusts or securities of companies engaged
in the real estate business).
Commodities
Purchase
or sell physical commodities unless acquired as a result of ownership of securities or other instruments (but this shall not prevent
the Fund from purchasing or selling options and futures contracts or from investing in securities or other instruments backed by physical
commodities).
Loans
Lend
any security or make any other loan except as permitted under the 1940 Act. This means that no more than 33 1/3% of the Fund’s
total assets would be lent to other parties. This limitation does not apply to purchases of debt securities or to repurchase agreements,
or to acquisitions of loans, loan participations or other forms of debt instruments, permissible under the Fund’s investment policies.
Non-Fundamental
Policies. The following investment policies are not fundamental and may be changed without shareholder approval. Prior to any change
in the Fund’s 80% policy, the Fund will provide shareholders with 60 days’ notice.
The
Fund has adopted a non-fundamental investment policy in accordance with Rule 35d-1 under the 1940 Act to invest, under normal circumstances,
at least 80% of its net assets, plus the amount of any borrowings for investment purposes, in fixed income securities and/or ETFs that
invest primarily in fixed income securities.
The
Fund’s investment in derivatives will be included in its net assets when determining whether the Fund satisfies the 80% test described
above and the Fund values those derivatives at market value.
If,
subsequent to an investment, the 80% requirement is no longer met, the Fund’s future investments will be made in a manner that
will bring the Fund into compliance with this policy.
CONTINUOUS
OFFERING
The
method by which Creation Unit Aggregations of shares are created and traded may raise certain issues under applicable securities laws.
Because new Creation Unit Aggregations of shares are issued and sold by the Fund on an ongoing basis, at any point a “distribution,”
as such term is used in the Securities Act, may occur. Broker-dealers and other persons are cautioned that some activities on their part
may, depending on the circumstances, result in their being deemed participants in a distribution in a manner which could render them
statutory underwriters and subject them to the prospectus delivery requirement and liability provisions of the Securities Act.
For
example, a broker-dealer firm or its client may be deemed a statutory underwriter if it takes Creation Unit Aggregations after placing
an order with the Distributor, breaks them down into constituent shares, and sells such shares directly to customers, or if it chooses
to couple the creation of a supply of new shares with an active selling effort involving solicitation of secondary market demand for
shares. A determination of whether one is an underwriter for purposes of the Securities Act must take into account all the facts and
circumstances pertaining to the activities of the broker-dealer or its client in the particular case, and the examples mentioned above
should not be considered a complete description of all the activities that could lead to a categorization as an underwriter.
Broker-dealer
firms should also note that dealers who are not “underwriters” but are effecting transactions in shares, whether or not participating
in the distribution of shares, generally are required to deliver a prospectus. This is because the prospectus delivery exemption in Section 4(3)
of the Securities Act is not available in respect of such transactions as a result of Section 24(d) of the 1940 Act. Firms that
incur a prospectus delivery obligation with respect to shares of the Fund are reminded that, pursuant to Rule 153 under the Securities
Act, a prospectus delivery obligation under Section 5(b)(2) of the Securities Act owed to an exchange member in connection with
the sale on the Listing Exchange is satisfied by the fact that the prospectus is available at the Listing Exchange upon request. The
prospectus delivery mechanism provided in Rule 153 is only available with respect to transactions on an exchange.
WisdomTree
or its affiliates (the “Selling Shareholder”) may purchase Creation Unit Aggregations through a broker-dealer to “seed”
(in whole or in part) funds as they are launched or thereafter, or may purchase shares from other broker-dealers or other investors that
have previously provided “seed” for funds when they were launched or otherwise in secondary market transactions, and because
the Selling Shareholder may be deemed an affiliate of such funds, the shares are being registered to permit the resale of these shares
from time to time after purchase. The Fund will not receive any of the proceeds from the resale by the Selling Shareholders of these
shares.
The
Selling Shareholder intends to sell all or a portion of the shares owned by it and offered hereby from time to time directly or through
one or more broker-dealers, and also may hedge such positions. The shares may be sold on any national securities exchange on which the
shares may be listed or quoted at the time of sale, in the over-the-counter market or in transactions other than on these exchanges or
systems at fixed prices, at prevailing market prices at the time of the sale, at varying prices determined at the time of sale, or at
negotiated prices. These sales may be effected in transactions, which may involve crosses or block transactions. The Selling Shareholder
may use any one or more of the following methods when selling shares:
• | ordinary brokerage transactions through brokers or dealers (who may act as agents or principals) or directly to one or more purchasers; |
• | privately negotiated transactions; |
• | through the writing or settlement of options or other hedging transactions, whether such options are listed on an options exchange or otherwise; and |
• | any other method permitted pursuant to applicable law. |
The
Selling Shareholder also may loan or pledge shares to broker-dealers that in turn may sell such shares, to the extent permitted by applicable
law. The Selling Shareholder also may enter into options or other transactions with broker-dealers or other financial institutions or
the creation of one or more derivative securities which require the delivery to such broker-dealer or other financial institution of
shares, which shares such broker-dealer or other financial institution may resell.
The
Selling Shareholder and any broker-dealer or agents participating in the distribution of shares may be deemed to be “underwriters”
within the meaning of Section 2(11) of the Securities Act in connection with such sales. In such event, any commissions paid to any such
broker-dealer or agent and any profit on the resale of the shares purchased by them may be deemed to be underwriting commissions or discounts
under the Securities Act. The Selling Shareholder who may be deemed an “underwriter” within the meaning of Section 2(11) of
the Securities Act will be subject to the applicable prospectus delivery requirements of the Securities Act.
The
Selling Shareholder has informed the Fund that it is not a registered broker-dealer and does not have any written or oral agreement or
understanding, directly or indirectly, with any person to distribute the shares. Upon the Fund being notified in writing by the Selling
Shareholder that any material arrangement has been entered into with a broker-dealer for the sale of shares through a block trade, special
offering, exchange distribution or secondary distribution or a purchase by a broker or dealer, a supplement to this SAI will be filed,
if required, pursuant to Rule 497 under the Securities Act, disclosing (i) the name of each Selling Shareholder and of the participating
broker-dealer(s), (ii) the number of shares involved, (iii) the price at which such shares were sold, (iv) the commissions paid or discounts
or concessions allowed to such broker-dealer(s), where applicable, (v) that such broker-dealer(s) did not conduct any investigation to
verify the information set out or incorporated by reference in the Fund’s Prospectus and SAI, and (vi) other facts material to
the transaction.
The
Selling Shareholder and any other person participating in such distribution will be subject to applicable provisions of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”) and the rules and regulations thereunder, including, without limitation,
to the extent applicable, Regulation M of the Exchange Act, which may limit the timing of purchases and sales of any of the shares by
the Selling Shareholder and any other participating person. To the extent applicable, Regulation M also may restrict the ability of any
person engaged in the distribution of the shares to engage in market-making activities with respect to the shares. All of the foregoing
may affect the marketability of the shares and the ability of any person or entity to engage in market-making activities with respect
to the shares. There is a risk that the Selling Shareholder may redeem its investments in the Fund or otherwise sell its shares to a
third party that may redeem. As with redemptions by other large shareholders, such redemptions could have a significant negative impact
on the Fund and its shares.
MANAGEMENT
OF THE TRUST
Board
Responsibilities. The Board is responsible for overseeing the management and affairs of the Fund and the Trust. The Board has considered
and approved contracts, as described herein, under which certain companies provide essential management and administrative services to
the Trust. Like most ETFs, the day-to-day business of the Trust, including the day-to-day management of risk, is performed by third-party
service providers, such as the Advisers, Distributor and Administrator. The Board is responsible for overseeing the Trust’s service
providers and, thus, has oversight responsibility with respect to the risk management performed by those service providers. Risk management
seeks to identify and eliminate or mitigate the potential effects of risks, i.e., events or circumstances that could have material
adverse effects on the business, operations, shareholder services, investment performance or reputation of the Trust or the Fund. Under
the overall supervision of the Board and the Audit Committee (discussed in more detail below), the service providers to the Fund employ
a variety of processes, procedures and controls to identify risks relevant to the operations of the Trust and the Fund to lessen the
probability of their occurrence and/or to mitigate the effects of such events or circumstances if they do occur. Each service provider
is responsible for one or more discrete aspects of the Trust’s business (e.g., the Advisers are responsible for the day-to-day
management of the Fund’s portfolio investments) and, consequently, for managing the risks associated with that activity.
The
Board’s role in risk management oversight begins before the inception of the Fund, at which time the Fund’s Adviser presents
the Board with information concerning the investment objectives, strategies and risks of the Fund. Additionally, the Fund’s Adviser
and Sub-Adviser provide the Board periodically with an overview of, among other things, its investment philosophy, brokerage practices
and compliance infrastructure. Thereafter, the Board oversees the risk management of the Fund’s operations, in part, by requesting
periodic reports from and otherwise communicating with various personnel of the Fund and its service providers, including the Trust’s
CCO and the Fund’s independent accountants. The Board and, with respect to identified risks that relate to its scope of expertise,
the Audit Committee, oversee efforts by management and service providers to manage risks to which the Fund may be exposed.
The
Board is responsible for overseeing the nature, extent and quality of the services provided to the Fund by the Adviser and receives information
about those services at its regular meetings. In addition, on at least an annual basis, in connection with its consideration of whether
to renew any Advisory Agreement and Sub-Advisory Agreement with the Adviser and Sub-Adviser, respectively, the Board meets with the Adviser
and Sub-Adviser to review such services. Among other things, the Board regularly considers the Adviser’s and Sub-Adviser’s
adherence to the Fund’s investment restrictions and compliance with various Fund policies and procedures and with applicable securities
regulations. The Board also reviews information about the Fund’s performance and investments.
The
Trust’s CCO meets regularly with the Board to review and discuss compliance and other issues. At least annually, the Trust’s
CCO provides the Board with a report reviewing the adequacy and effectiveness of the Trust’s policies and procedures and those
of its service providers, including the Adviser and Sub-Adviser. The report addresses the operation of the policies and procedures of
the Trust and each service provider since the date of the last report; material changes to the policies and procedures since the date
of the last report; any recommendations for material changes to the policies and procedures; and material compliance matters since the
date of the last report.
The
Board receives reports from the Trust’s service providers regarding operational risks, portfolio valuation and other matters. Annually,
an independent registered public accounting firm reviews with the Audit Committee its audit of the Fund’s financial statements,
focusing on major areas of risk encountered by the Fund and noting any significant deficiencies or material weaknesses in the Fund’s
internal controls.
The
Board recognizes that not all risks that may affect the Fund can be identified, that it may not be practical or cost-effective to eliminate
or mitigate certain risks, that it may be necessary to bear certain risks (such as investment-related risks) to achieve the Fund’s
goals, and that the processes, procedures and controls employed to address certain risks may be limited in their effectiveness. Moreover,
despite the periodic reports the Board receives and the Board’s discussions with the service providers to the Fund, it may not
be made aware of all of the relevant information related to a particular risk. Most of the Trust’s investment management and business
affairs are carried out by or through the Fund’s Adviser, Sub-Adviser and other service providers, each of which has an independent
interest in risk management but whose policies and methods by which one or more risk management functions are carried out may differ
from the Trust’s and each other’s in the setting of priorities, the resources available or the effectiveness of relevant
controls. As a result of the foregoing and other factors, the Board’s risk management oversight is subject to substantial limitations.
Members
of the Board and Officers of the Trust. Set forth below are the names, birth years, positions with the Trust, term of office, number
of portfolios overseen, and principal occupations and other directorships held during the last five years of each of the persons currently
serving as members of the Board and as Executive Officers of the Trust. Also included below is the term of office for each of the Executive
Officers of the Trust. The members of the Board serve as Trustees for the life of the Trust or until retirement, removal, or their office
is terminated pursuant to the Trust’s Declaration of Trust. The address of each Trustee and Officer is c/o WisdomTree Asset Management,
Inc., 250 West 34th Street, 3rd Floor, New York, New York 10119.
The
Chairman of the Board, Victor Ugolyn, is not an interested person of the Fund as that term is defined in the 1940 Act. The Board is composed
of a super-majority (83.3%) of Trustees who are not interested persons of the Fund (i.e., “Independent Trustees”).
There is an Audit Committee, Governance, Nominating and Compliance Committee, Contracts Review Committee, and Investment Committee of
the Board, each of which is chaired by an Independent Trustee and comprised solely of Independent Trustees. The Committee chair for each
is responsible for running the Committee meetings, formulating agendas for those meetings, and coordinating with management to serve
as a liaison between the Committee members and management on matters within the scope of the responsibilities of the Committee as set
forth in its Board-approved charter. The Fund has determined that this leadership structure is appropriate given the specific characteristics
and circumstances of the Fund. The Fund made this determination in consideration of, among other things, the fact that the Independent
Trustees of the Fund constitute a super-majority of the Board, the assets under management of the Fund, the number of funds overseen
by the Board, the total number of Trustees on the Board, and the fact that an Independent Trustee serves as Chairman of the Board.
Name and Year of Birth of Trustee/Officer |
Position(s) Held with the Office Time |
Principal During |
Number |
Other Directorships Held |
||||
Trustees Who Are Interested Persons of the Trust |
||||||||
Jonathan Steinberg (1964) |
Trustee, 2005- present; President, 2005-present |
Chief Executive Officer, WisdomTree and WisdomTree Asset Management since 2005; President, WisdomTree and WisdomTree Asset Management from 2012 to 2019. |
81 | Director, WisdomTree and WisdomTree Asset Management. |
||||
Trustees Who Are Not Interested Persons of the Trust |
||||||||
David G. Chrencik* (1948) |
Trustee, 2014-present | Chief Financial Officer of Sarus Indochina Select LP (hedge fund) from 2012 to 2022; Chief Financial Officer of GeoGreen BioFuels, Inc. (biodiesel fuel producer) from 2010 to 2014; Audit Partner at PricewaterhouseCoopers LLP (public accounting firm) from 1972 to 2009 (includes positions prior to becoming Audit Partner and predecessor firms). |
81 | None | ||||
Joel Goldberg**, *** (1945) |
Trustee, 2012-present | Attorney, Partner at Stroock & Stroock & Lavan LLP from 2010 to 2018; Attorney, Partner at Willkie Farr & Gallagher LLP from 2006 to 2010. |
81 | Director, Better Business Bureau (Metropolitan New York, Long Island and the Mid-Hudson Region). |
Name and Year of Birth of Trustee/Officer |
Position(s) Held with the Office Time |
Principal During |
Number |
Other Directorships Held |
||||
Toni Massaro*** (1955) |
Trustee, 2006-present | Dean Emerita at the University of Arizona James E. Rogers College of Law (“Rogers College of Law”) since 2009 (distinguished Emerita in July 2009); Dean of the Rogers College of Law from 1999 to 2009; Regents’ Professor since 2006; Milton O. Riepe Chair in Constitutional Law since 1997; Professor at the Rogers College of Law since 1990. |
81 | None | ||||
Melinda A. (1955) |
Trustee, 2014-present | Retired since 2004, Merrill Lynch Investment Management, Vice President; Senior Portfolio Manager, Fixed Income Management; Director, Tax Exempt Fund Management. |
81 | Associate Alumnae of Douglass College, Chair of Investment Committee. |
||||
Victor Ugolyn (1947) |
Trustee, 2006-present; Chairman of the Board, 2006-present |
Private Investor, from 2005 to present; President and Chief Executive Officer of William D. Witter, Inc. from 2005 to 2006; Consultant to AXA Enterprise in 2004; Chairman, President and Chief Executive Officer of Enterprise Capital Management (subsidiary of The MONY Group, Inc.) and Enterprise Group of Funds, Chairman of MONY Securities Corporation, and Chairman of the Fund Board of Enterprise Group of Funds from 1991 to 2004. |
81 | None | ||||
Officers of the Trust |
||||||||
Jonathan (1964) |
President, present; |
Chief Executive Officer, WisdomTree and WisdomTree Asset Management since 2005; President, WisdomTree and WisdomTree Asset Management from 2012 to 2019. |
81 |
See Interested
|
Name and Year of Birth of Trustee/Officer |
Position(s) Held with the Office Time |
Principal During |
Number |
Other Directorships Held |
||||
David Castano***** (1971) |
Treasurer, 2013-present | Head of Fund Accounting & Administration, WisdomTree Asset Management, since 2020; Director of Fund Accounting & Administration, Wisdom Tree Asset Management, 2011 to 2020. |
81 | None | ||||
Terry Jane Feld***** (1960) |
Chief Compliance Officer, 2012-present |
Head of U.S. Compliance, WisdomTree Asset Management since 2022; Chief Compliance Officer WisdomTree Asset Management since 2012. |
81 | None | ||||
Joanne (1975)
|
Chief Legal Officer and Secretary, 2021-present |
General Counsel, WisdomTree Asset Management since 2021; Assistant General Counsel, WisdomTree Asset Management 2016 to 2021; Executive Director and Assistant Secretary, Morgan Stanley Investment Management Inc., 2005 to 2016. |
81 |
None
|
||||
TJ (1984) |
Assistant
|
Senior Investment Management Paralegal, WisdomTree Asset Management since 2021; Senior Legal Administrator, Ultimus Fund Solutions, 2019-2021; Assistant Vice President, State Street Bank & Trust Company, 2010 to 2019. |
81 |
None
|
||||
|
||||||||
Clint (1977)
|
Assistant
|
Director of Fund Accounting & Administration, WisdomTree Asset Management, since 2020; Fund Manager, Fund Accounting & Administration, WisdomTree Asset Management, 2012 to 2020. |
81 |
None
|
||||
Angela (1964) |
Assistant Secretary, 2022-present | Assistant General Counsel, WisdomTree Asset Management since 2022; Vice President and Senior Counsel, Virtus Investment Partners, 2021-2022; Director, Senior Counsel, Allianz Global Investors, 2007-2021. |
81 |
None |
||||
Sherry (1967) |
Assistant 2023-present |
Senior Investment Management Paralegal, WisdomTree Asset Management since 2023; Senior Legal Analyst, Eagle Point Credit Management, LLC, 2021-2023; Senior Legal Analyst Jennison & Associates LLC 2019 -2021; Senior Legal Specialist, Legg Mason & Co. LLC 2005–2019. |
81 |
None |
______________
* | Chair of the Audit Committee. |
** | Chair of the Contracts Review Committee. |
*** | Co-Chair of the Governance, Nominating and Compliance Committee. |
**** | Chair of the Investment Committee. |
***** | Elected by and serves at the pleasure of the Board. |
+ | As of the date of this SAI. |
Audit
Committee. Ms. Raso Kirstein and Messrs. Chrencik and Ugolyn, each an Independent Trustee, are members of the Board’s Audit
Committee. The principal responsibilities of the Audit Committee are the appointment, compensation and oversight of the Trust’s
independent registered public accounting firm, including the resolution of disagreements regarding financial reporting between Trust
management and such independent registered public accounting firm. The Audit Committee’s responsibilities include, without limitation,
to (i) oversee the accounting and financial reporting processes of the Trust and to receive reports regarding the Trust’s
internal control over financial reporting; (ii) oversee the quality and integrity of the Fund’s financial statements and the
independent audits thereof; (iii) oversee, or, as appropriate, assist Board oversight of, the Trust’s compliance with legal
and regulatory requirements that relate to the Trust’s accounting and financial reporting, and independent audits; (iv) approve
prior to appointment the engagement of the Trust’s independent registered public accounting firm and, in connection therewith,
to review and evaluate the qualifications, independence and performance of the Trust’s independent registered public accounting
firm; and (v) act as a liaison between the Trust’s independent auditors and the full Board. The Independent Trustees’
independent legal counsel assists the Audit Committee in connection with these duties. The Board has adopted a written charter for the
Audit Committee. During the fiscal year ended August 31, 2023, the Audit Committee held six meetings.
Governance,
Nominating and Compliance Committee. Ms. Massaro and Messrs. Goldberg and Ugolyn, each an Independent Trustee, are members of the
Board’s Governance, Nominating and Compliance Committee. The principal responsibilities of the Governance, Nominating and Compliance
Committee are to (i) provide assistance to the Board in fulfilling its responsibility with respect to the oversight of appropriate and
effective governance of the Trust; (ii) identify individuals qualified to serve as Independent Trustees of the Trust and to recommend
its nominees for consideration by the full Board; and (iii) provide assistance to the Board in fulfilling its responsibility with respect
to overseeing the CCO and overseeing compliance matters involving the Fund and their service providers as reported to the Board. While
the Governance, Nominating and Compliance Committee is solely responsible for the selection and nomination of the Trust’s Independent
Trustees, the Governance, Nominating and Compliance Committee may consider nominations for the office of Trustee made by Trust shareholders
as it deems appropriate. The Governance, Nominating and Compliance Committee considers nominees recommended by shareholders if such nominees
are submitted in accordance with Rule 14a-8 of the Securities Exchange Act of 1934 (the “1934 Act”), in conjunction with
a shareholder meeting to consider the election of Trustees. Trust shareholders who wish to recommend a nominee should send nominations
to the Secretary of the Trust that include biographical information and set forth the qualifications of the proposed nominee. The Board
has adopted a written charter for the Governance, Nominating and Compliance Committee. During the fiscal year ended August 31, 2023,
the Governance, Nominating and Compliance Committee held five meetings.
Contracts
Review Committee. Ms. Massaro and Messrs. Goldberg and Ugolyn, each an Independent Trustee, are members of the Board’s
Contracts Review Committee. The principal responsibilities of the Contracts Review Committee are to provide assistance to the Board in
fulfilling its responsibilities under Section 15 of the 1940 Act, and other applicable Sections, rules and interpretative guidance
related thereto, with respect to reviewing the performance of, and reasonableness of fees paid to, the Adviser, Sub-Adviser, and core
service providers for each series of the Trust, and to make recommendations to the Board regarding the contractual arrangements for such
services. On March 12, 2014, the Board created the Contracts Review Committee. The Board has adopted a written charter for the Contracts
Review Committee. During the fiscal year ended August 31, 2023, the Contracts Review Committee held five meetings.
Investment
Committee. Ms. Raso Kirstein and Messrs. Goldberg and Ugolyn, each an Independent Trustee, are members of the Board’s Investment
Committee. The principal responsibilities of the Investment Committee are to support, oversee and organize on behalf of the Board the
process for overseeing Fund performance and related matters (it being the intention of the Board that the ultimate oversight of Fund
performance shall remain with the full Board), address such other matters that the Board shall determine and provide recommendations
to the Board as needed in respect of the foregoing matters. On December 11, 2015, the Board created the Investment Committee. The Board
has adopted a written charter for the Investment Committee. During the fiscal year ended August 31, 2023, the Investment Committee held
seven meetings.
Individual
Trustee Qualifications. The Board has concluded that each of the Trustees is qualified to serve on the Board because of his or her
ability to review and understand information about the Trust and the Fund provided by management, to identify and request other information
he or she may deem relevant to the performance of the Trustees’ duties, to question management and other service providers regarding
material factors bearing on the management and administration of the Fund, and to exercise his or her business judgment in a manner that
serves the best interests of the Fund’s shareholders. The Trust has concluded that each of the Trustees is qualified to serve as
a Trustee based on his or her own experience, qualifications, attributes and skills as described below.
The
Board has concluded that Mr. Steinberg is qualified to serve as Trustee of the Fund because of the experience he has gained as President,
Chief Executive Officer and director of WisdomTree and the Adviser, his knowledge of and experience in the financial services industry,
and the experience he has gained serving as President and Trustee of the Trust since 2005.
The
Board has concluded that Mr. Chrencik is qualified to serve as Trustee of the Fund because of the experience he gained as an audit
partner of a public accounting firm as well as his experience in and knowledge of the financial services industry, including his service
as the chief financial officer of a hedge fund and his prior service as a board member of several other investment funds, and the experience
he has gained serving as an Independent Trustee of the Trust since 2014.
The
Board has concluded that Mr. Goldberg is qualified to serve as Trustee of the Fund because of the experience he has gained as a
member of the staff of the SEC, including his service as Director of the SEC’s Division of Investment Management, his experience
as legal counsel for many mutual funds, ETFs, investment advisers, and independent directors as well as the experience he has gained
serving as an Independent Trustee of the Trust since 2012.
The
Board has concluded that Ms. Massaro is qualified to serve as Trustee of the Fund because of the experience she has gained as a
law professor, dean and advisor at various universities, and the experience she has gained serving as Independent Trustee of the Trust
since 2006.
The
Board has concluded that Ms. Raso Kirstein is qualified to serve as Trustee of the Fund because of her experience in and knowledge
of the financial services industry, including her service as a vice president, senior portfolio manager of fixed income management and
director of tax-exempt fund research of an investment advisory firm, as well as the experience she has gained serving as an Independent
Trustee of the Trust since 2014.
The
Board has concluded that Mr. Ugolyn is qualified to serve as Trustee of the Fund because of the experience he gained as chief executive
officer of a firm specializing in financial services, his experience in and knowledge of the financial services industry, his experience
as a member of the Board of Directors of The New York Society of Security Analysts, Inc., his service as chairman for another mutual
fund family, and the experience he has gained serving as an Independent Trustee and Chairman of the Board of the Trust since 2006.
Fund
Shares Owned by Board Members. The following table shows the dollar amount range of each Trustee’s “beneficial ownership”
of shares of the Fund and each series of the Trust as of the end of the most recently completed calendar year. Dollar amount ranges disclosed
are established by the SEC. “Beneficial ownership” is determined in accordance with Rule 16a-1(a)(2) under the 1934 Act.
The Trustees and officers of the Trust collectively own less than 1% of the outstanding shares of the Trust.
Name |
Dollar Range of Equity |
Aggregate Dollar Range of |
||
Interested Trustee |
||||
Jonathan L. Steinberg |
None | Over $100,000 |
||
Independent Trustees |
||||
David G. Chrencik |
None | Over $100,000 |
||
Joel H. Goldberg |
None | Over $100,000 |
||
Melinda Raso Kirstein |
None | Over $100,000 |
||
Toni M. Massaro |
None | Over $100,000 | ||
Victor Ugolyn |
None | Over $100,000 |
* | Values based on Trustee ownership as of the date of this SAI. |
** | Values based on Trustee ownership as of December 31, 2022. |
Board
Compensation. The following table sets forth the compensation paid by the Trust to each Trustee for the fiscal year ended August
31, 2023.
Name of Trustee |
Aggregate Compensation from the Trust |
Pension or Retirement Benefits Accrued as Part of Trust’s Expenses |
Estimated Annual Benefits Upon Retirement |
Total Compensation from the Fund and Fund Complex* |
|||||||
Interested Trustee | |||||||||||
Jonathan L. Steinberg | $ | 0 | None | None | $ | 0 | |||||
Independent Trustees | |||||||||||
David Chrencik | $ | 358,819 | None | None | $ | 358,819 | |||||
Joel Goldberg | $ | 375,129 | None | None | $ | 375,129 | |||||
Melinda Raso Kirstein | $ | 358,819 | None | None | $ | 358,819 | |||||
Toni M. Massaro | $ | 342,509 | None | None | $ | 342,509 | |||||
Victor Ugolyn | $ | 489,299 | None | None | $ | 489,299 |
* | The Trust is the only trust in the “Fund Complex.” |
Control
Persons and Principal Holders of Securities. Because the Fund is new, the Fund has not received information concerning the ownership
of shares held in the names of Depository Trust Company participants (“DTC Participants”).
Certain
officers, employees, accounts or affiliates of WisdomTree Asset Management (such as WisdomTree, Inc., 250 West 34th Street,
3rd Floor, New York, New York 10119), including other funds advised by WisdomTree Asset Management or third parties, may from
time to time own a substantial amount of the Fund’s shares, including as an initial or seed investor. Such positions may be held
for a limited period of time, including to facilitate commencement of the Fund, to facilitate the Fund’s achieving size or scale
or in seeking to track model portfolios of ETFs developed and maintained by the Adviser. Such shareholders, individually and/or collectively,
could at times be considered to control the Fund (i.e., own greater than 25% of the Fund shares) and may purchase or sell shares,
including large blocks of shares, at any given time. There can be no assurance that any such entity or person would not redeem or sell
its investment, that the size of the Fund would be maintained at such levels or that the Fund would continue to meet applicable listing
requirements, which could negatively impact the Fund and its shares. In addition, such transactions may account for a large percentage
of secondary market trading volume and may, therefore, not be sustainable and/or may have a material upward or downward effect on the
market price of the shares.
Investment
Adviser. WisdomTree Asset Management serves as investment adviser to the Fund pursuant to an investment advisory agreement between
the Trust and WisdomTree Asset Management (the “Investment Advisory Agreement”). WisdomTree Asset Management is a Delaware
corporation registered as an investment adviser under the Investment Advisers Act of 1940, as amended (the “Advisers Act”),
and has offices located at 250 West 34th Street, 3rd Floor, New York, New York 10119.
Under
the Investment Advisory Agreement, WisdomTree Asset Management is responsible for the overall management and administration of the Trust.
WisdomTree Asset Management provides and oversees the implementation of an investment program for the Fund. WisdomTree Asset Management
also provides proactive oversight of the Sub-Adviser, including daily monitoring of the Sub-Adviser’s purchase and sale of Fund
holdings, and regular review of the Sub-Adviser’s investment performance. In addition, WisdomTree Asset Management arranges for,
and oversees, sub-advisory, transfer agency, custody, fund administration, securities lending, and all other non-distribution related
services necessary for the Fund to operate. The Adviser furnishes to the Trust all office facilities, equipment, services and executive
and administrative personnel necessary for managing the investment program of the Trust for the Fund, including:
n |
Overseeing the Trust’s insurance program; |
n |
Overseeing and coordinating all governance matters for the Trust; |
n |
Coordinating meetings of the Board; |
n |
Devoting time and resources to maintaining an efficient market for the Fund’s shares; |
n |
Coordinating with outside counsel on all Trust related legal matters; |
n |
Coordinating the preparation of the Trust’s financial statements; |
n |
Coordinating all regulatory filings and shareholder reporting; |
n |
Overseeing the Fund’s tax status and tax filings; |
n |
Maintaining and updating a website for certain required disclosures; and |
n |
Providing shareholders with additional information about the Fund. |
The
Fund pays WisdomTree Asset Management the Management Fee, based on a percentage of the Fund’s average daily net assets, indicated
below.
Fund |
Advisory |
|
WisdomTree Bianco Fixed Income Total Return Fund | [ ]% |
WisdomTree
Asset Management has contractually agreed, through [__________], 2024, to reduce the Fund’s Management Fee in an amount equal to
the management fee paid to it by any WisdomTree Fund in which the Fund invests with respect to such investment. The amount waived may
be reduced to offset the incremental costs related to an investment in an underlying fund and paid by WisdomTree Asset Management (e.g.,
fund accounting, safekeeping, transaction fees, etc.). This waiver agreement may be terminated by WisdomTree Asset Management upon advance
notice at the conclusion of any one-year term or by the Fund’s Board of Trustees at any time.
Pursuant
to the terms of the Investment Advisory Agreement, WisdomTree Asset Management has agreed to pay all expenses of the Fund, except for:
(i) brokerage expenses and other fees, charges, taxes, levies or expenses (such as stamp taxes) incurred in connection with the
execution of portfolio transactions or in connection with creation and redemption transactions (including without limitation any fees,
charges, taxes, levies or expenses related to the purchase or sale of an amount of any currency, or the patriation or repatriation of
any security or other asset, related to the execution of portfolio transactions or any creation or redemption transactions); (ii) legal
fees or expenses in connection with any arbitration, litigation or pending or threatened arbitration or litigation, including any settlements
in connection therewith; (iii) compensation and expenses of each Independent Trustee; (iv) compensation and expenses of counsel
to the Independent Trustees; (v) compensation and expenses of the Trust’s CCO; (vi) extraordinary expenses (in each case
as determined by a majority of the Independent Trustees); (vii) distribution fees and expenses paid by the Trust under the distribution
plan adopted pursuant to Rule 12b-1 under the 1940 Act; (viii) interest and taxes of any kind or nature (including, but not limited
to, income, excise, transfer and withholding taxes); (ix) fees and expenses related to the provision of securities lending services;
and (x) the advisory fee payable by the Fund to WisdomTree Asset Management. The internal expenses of pooled investment vehicles
in which the Fund may invest (acquired fund fees and expenses) are not expenses of the Fund and are not paid by WisdomTree Asset Management.
Pursuant
to a separate contractual arrangement, WisdomTree Asset Management arranges for the provision of CCO services with respect to the Fund
and is liable and responsible for, and administers payments to, the CCO, the Independent Trustees, and counsel to the Independent Trustees.
WisdomTree Asset Management receives a fee of up to 0.0044% of the Fund’s average daily net assets for providing such services
and paying such expenses. WisdomTree Asset Management provides CCO services to the Trust.
The
Adviser, from its own resources, including profits from advisory fees received from the Fund, provided such fees are legitimate and not
excessive, may make payments to broker-dealers and other financial institutions for their expenses in connection with the distribution
of Fund shares, and otherwise currently pays all distribution costs for Fund shares.
The
Investment Advisory Agreement continues in effect for two years from its effective date, and thereafter is subject to annual approval
by (i) the Board or (ii) the vote of a majority of the outstanding voting securities (as defined in the 1940 Act) of the Fund,
provided that in either event such continuance also is approved by a vote of a majority of the Trustees of the Trust who are not interested
persons (as defined in the 1940 Act) of the Fund, by a vote cast in person at a meeting called for the purpose of voting on such approval.
If the shareholders of the Fund fail to approve the Investment Advisory Agreement, WisdomTree Asset Management may continue to serve
in the manner and to the extent permitted by the 1940 Act and rules and regulations thereunder.
The
Investment Advisory Agreement is terminable without any penalty, by vote of the Board, including a majority of the Independent Trustees
of the Trust, or by vote of a majority of the outstanding voting securities (as defined in the 1940 Act) of the Fund, or by WisdomTree
Asset Management, in each case on not less than thirty (30) days’ nor more than sixty (60) days’ prior written
notice to the other party; provided that a shorter notice period shall be permitted for the Fund in the event its shares are no longer
listed on a national securities exchange. The Investment Advisory Agreement will terminate automatically and immediately in the event
of its “assignment” (as defined in the 1940 Act).
WisdomTree
Asset Management entered into an agreement with the Index Provider, pursuant to which the Index Provider agreed to (i) collaborate with
WisdomTree Asset Management on the development of the Index and provide certain Index-related support, and (ii) pay WisdomTree Asset
Management a flat annual fee to offset certain operational expenses. The agreement further generally provides that the Index Provider
is entitled to a license fee, to be paid by WisdomTree Asset Management, equal to half of WisdomTree Asset Management’s Management
Fee after the payment of the Fund’s operational expenses. The Index Provider is not affiliated with any of WisdomTree Asset Management,
WisdomTree, the Fund’s administrator, custodian, transfer agent or the Distributor, or any of their respective affiliates. The
Index Provider does not make investment decisions or provide investment advice with respect to the Fund’s portfolio holdings, or
otherwise act in the capacity of an investment adviser to the Fund.
Sub-Adviser.
[ ] serves as sub-adviser to the Fund pursuant to a sub-advisory agreement between WisdomTree Asset Management and the Sub-Adviser
(the “Sub-Advisory Agreement”) and is responsible for the day-to-day management of the Fund. [ ], a registered investment
adviser, manages global quantitative-based investment strategies for institutional and private investors. The Sub-Adviser’s principal
office is located at [ ]. [ ] is a wholly-owned indirect subsidiary of [ ], a publicly traded financial holding company. [ ] chooses the
portfolio investments of the Fund and places orders to buy and sell the portfolio investments. WisdomTree Asset Management pays [ ] for
providing sub-advisory services to the Fund.
[ ]
believes that it may perform sub-advisory and related services for the Trust without violating applicable banking laws or regulations.
However, the legal requirements and interpretations about the permissible activities of banks and their affiliates may change in the
future. These changes could prevent [ ] from continuing to perform services for the Trust. If this happens, the Board would consider selecting
other qualified firms.
The
Sub-Advisory Agreement continues in effect for two years from its effective date, and thereafter is subject to annual approval by (i)
the Board or (ii) the vote of a majority of the outstanding voting securities (as defined in the 1940 Act), provided that in either event
such continuance also is approved by a vote of a majority of the Trustees of the Trust who are not interested persons (as defined in
the 1940 Act) of the Fund, by a vote cast in person at a meeting called for the purpose of voting on such approval. If the shareholders
of the Fund fail to approve the Sub-Advisory Agreement, WisdomTree Asset Management may continue to serve in the manner and to the extent
permitted by the 1940 Act and rules and regulations thereunder. The Sub-Advisory Agreement is terminable without any penalty, by vote
of the Board of or by vote of a majority of the outstanding voting securities (as defined in the 1940 Act) of the Fund, or by WisdomTree
Asset Management, in each case on not less than thirty (30) days’ nor more than sixty (60) days’ prior written notice to
the other party; provided that a shorter notice period shall be permitted for the Fund in the event its shares are no longer listed on
a national securities exchange. The Sub-Advisory Agreement will terminate automatically and immediately in the event of its “assignment”
(as defined in the 1940 Act).
Portfolio
Managers. [ ] utilizes a team of investment professionals acting together to manage the Fund’s assets. The team meets regularly
to review portfolio holdings and to discuss purchase and sale activity. The team adjusts holdings in the Fund’s portfolio as it
deems appropriate in the pursuit of the Fund’s investment objectives.
The
Fund is managed by [ ]’s [_________] Portfolio Management Team. The individual members of the team jointly and primarily responsible
for the day-to-day management of the Fund’s portfolio are [ ]. [None of the other accounts managed have a performance-based fee.]
Portfolio Manager |
Registered Investment Companies |
Other Pooled Investment Vehicles |
Other Accounts |
|||
Number | Assets Managed |
Number | Assets Managed |
Number | Assets Managed |
|
[___] | [___] | [___] | [___] | [___] | [___] | [___] |
[___] | [___] | [___] | [___] | [___] | [___] | [___] |
Portfolio
Manager Fund Ownership. As of the date of this SAI, none of the portfolio managers owned shares of the Fund.
Portfolio
Manager Compensation. The Sub-Adviser’s rewards program is designed to be market-competitive and align its compensation with
the goals of our clients. This alignment is achieved through an emphasis on deferred awards, which incentivizes the Sub-Adviser’s
investment personnel to focus on long-term alpha generation.
The
Sub-Adviser’s incentive model is designed to compensate for quantitative and qualitative objectives achieved during the performance
year. An individual’s final annual incentive award is tied to the firm’s overall performance, the team’s investment
performance, as well as individual performance.
Awards
are paid in cash on an annual basis; however, some portfolio managers may receive a portion of their annual incentive award in deferred
vehicles. Annual incentive as a percentage of fixed pay varies with the profitability of the firm and the product team.
The
following factors encompass the Sub-Adviser’s investment professional rewards program.
• | Long-Term Incentive Plan |
– | Deferred cash for investment |
– | [ ] restricted stock units and/or |
– | [ ] equity |
Description
of Material Conflicts of Interest. It is the policy of the Sub-Adviser to make business decisions free from conflicting outside influences.
The Sub-Adviser’s objective is to recognize potential conflicts of interest and work to eliminate or control and disclose such
conflicts as they are identified. The Sub-Adviser’s business decisions are based on its duty to its clients, and not driven by
any personal interest or gain. As an asset manager operating in a number of different jurisdictions with a diverse client base in a variety
of strategies, conflicts of interest are inherent. Furthermore, as an indirect subsidiary of [ ], potential conflicts also may arise between
the Sub-Adviser and other [ ] companies.
The
Sub-Adviser will take steps to provide reasonable assurance that no client or group of clients is advantaged at the expense of any other
client. As such, it has adopted a Code of Ethics and compliance policy manual to address such conflicts. These potential and inherent
conflicts include but are not limited to: the allocation of investment opportunities, side by side management, execution of portfolio
transactions, brokerage conflicts, compensation conflicts, related party arrangements, personal interests, and other investment and operational
conflicts of interest. The Sub-Adviser’s compliance policies are designed to ensure that all client accounts are treated equitably
over time. Additionally, it has structured compensation of investment personnel to reasonably safeguard client accounts from being adversely
impacted by any potential or related conflicts.
All
material conflicts of interest are presented in greater detail within Part 2A of the Sub-Adviser’s Form ADV.
The
Sub-Adviser manages numerous accounts with a variety of interests. This necessarily creates potential conflicts of interest for us. For
example, the Sub-Adviser or an affiliate may cause multiple accounts to invest in the same investment. Such accounts may have conflicting
interests and objectives in connection with such investment, including differing views on the operations or activities of the portfolio
company, the targeted returns for the transaction, and the timeframe for and method of exiting the investment. Conflicts also may arise
in cases where multiple Sub-Adviser and/or affiliate client accounts are invested in different parts of an issuer’s capital structure.
For example, one of the Sub-Adviser’s client accounts could acquire debt obligations of a company while an affiliate’s client
account acquires an equity investment. In negotiating the terms and conditions of any such investments, the Sub-Adviser may find that
the interests of the debt-holding client accounts and the equity-holding client accounts may conflict. If that issuer encounters financial
problems, decisions over the terms of the workout could raise conflicts of interest (including, for example, conflicts over proposed
waivers and amendments to debt covenants). For example, debt holding accounts may be better served by a liquidation of an issuer in which
it could be paid in full, while equity holding accounts might prefer a reorganization of the issuer that would have the potential to
retain value for the equity holders. As another example, holders of an issuer’s senior securities may be able to act to direct
cash flows away from junior security holders, and both the junior and senior security holders may be Sub-Adviser client accounts. Any
of the foregoing conflicts of interest will be discussed and resolved on a case-by-case basis. Any such discussions will factor in the
interests of the relevant parties and applicable laws.
The
Sub-Adviser has a fiduciary duty to manage all client accounts in a fair and equitable manner. To accomplish this, the Sub-Adviser has
adopted various policies and procedures including, but not limited to, policies relating to trading operations, best execution, trade
order aggregation and allocation, short sales, cross-trading, code of conduct, personal securities trading, and purchases of securities
from affiliated underwriters. These procedures are intended to help employees identify and mitigate potential side-by-side conflicts
of interest such as those described above. The Sub-Adviser has also developed a conflicts matrix listing potential side-by-side conflicts,
the compliance policies and procedures reasonably designed to mitigate such potential conflicts of interest, and the corresponding compliance
testing program established with the goal of confirming the Sub-Adviser’s adherence to such policies and procedures.
Performance
Fees. The Sub-Adviser may enter into performance-based fee arrangements for certain client accounts and funds. Most of these
arrangements provide for an asset-based management fee, based on the market value of the account at month end, quarter end or based on
average market value, plus a performance fee based on the portfolio’s net return in excess of a specified benchmark and/or hurdle
rate during a designated period of time. The performance is based on both realized and unrealized gains and losses. Some performance
fee calculations include a high-water mark, which keeps track of the highest level of performance on which a performance fee has been
paid and which must be exceeded in order for an additional performance fee to be assessed. For more detailed information on how performance
fees are calculated, please see the applicable private placement memorandum or investment management agreement.
Side-by-Side
Management. “Side-by-side management” refers to a Portfolio Manager’s simultaneous management of multiple types
of client accounts/investment products. For example, the Portfolio Managers manage separate accounts, managed accounts/wrap-fee
programs, and pooled investment vehicles for clients at the same time. The Portfolio Managers’ clients have a variety of investment
objectives, policies, strategies, limitations, and restrictions. Side-by-side management gives rise to a variety of potential and
actual conflicts of interest for the Portfolio Managers. Below is a discussion of the conflicts that the Portfolio Managers face
when engaging in side-by-side management and how they deal with them. Note that certain of the Sub-Adviser’s employees also
may serve as officers or employees of one or more of the Sub-Adviser’s affiliates (“dual officers”). These dual
officers undertake investment management duties for the affiliates of which they are officers. When the Portfolio Managers
concurrently manage client accounts/ investment products, and in particular when dual officers or dual employees are involved, this presents
the same conflicts as described below. Note that Portfolio Managers manage their accounts consistent with applicable laws, and they follow
procedures that are reasonably designed to treat clients fairly and to prevent any client or group of clients from being materially favored
or disadvantaged.
Conflicts
of Interest Relating to Side-by-Side Management of Discretionary and Non-Discretionary Accounts. In limited circumstances, Portfolio
Managers may provide to a third party for which they provide non-discretionary advisory services the same model portfolio used to manage
certain of the Portfolio Managers’ clients’ accounts. In those cases where Portfolio Managers are implementing the model
results for only a portion of the assets affected (for example, only the assets over which Portfolio Managers have discretionary management
authority) and therefore, they cannot apply their internal trade allocation procedures, Portfolio Managers will (i) use reasonable
efforts to agree on procedures with such non-discretionary clients designed to prevent one group of clients from receiving preferential
trading treatment over another group, or (ii) determine that, due to the nature of the assets to be traded or the market on which
they are traded, no client would likely be adversely affected if such procedures are not established.
Conflicts
of Interest Relating to Performance-Based Fees When Engaging in Side-by-Side Management. Portfolio Managers manage accounts that
are charged a performance-based fee and other accounts that are charged a different type of fee, such as a flat asset-based fee. Portfolio
Managers have a financial incentive to favor accounts with performance-based fees because they (and the Sub-Adviser’s employees
and supervised persons) may have an opportunity to earn greater fees on such accounts as compared to client accounts without performance-based
fees. Thus, Portfolio Managers have an incentive to direct their best investment ideas to client accounts that pay performance-based
fees, and to allocate, aggregate, or sequence trades in favor of such accounts. Portfolio Managers also have an incentive to give
accounts with performance-based fees better execution and better brokerage commissions.
Conflicts
of Interest Relating to Accounts with Different Strategies. Portfolio Managers manage numerous accounts with a variety of strategies,
which may present conflicts of interest. For example, a long/short position in two client accounts simultaneously can result in
a loss to one client based on a decision to take a gain in the other. Taking concurrent conflicting positions in certain derivative
instruments can likewise cause a loss to one client and a gain to another. Portfolio Managers also may face conflicts of interest
when they have uncovered option strategies and significant positions in illiquid investments in side-by-side accounts.
Conflicts
of Interest Relating to the Management of Multiple Client Accounts. Portfolio Managers perform investment advisory services for
various clients. Portfolio Managers may give advice and take action in the performance of their duties with respect to any of their
other clients which may differ from the advice given, or the timing or nature of action taken, with respect another client. Portfolio
Managers have no obligation to purchase or sell for a client any security or other property which they purchase or sell for their own
account or for the account of any other client, if they believe it is undesirable or impractical to take such action. Portfolio
Managers may give advice or take action in the performance of their duties with respect to any of their clients which may differ from
the advice given, or the timing or nature of action taken, by their affiliates on behalf of their clients.
Conflicts
of Interest Relating to Investment in Affiliated Accounts. To the extent permissible under applicable law, the Portfolio Managers
may decide to invest some or all of their temporary investments in money market or similar accounts advised or managed by a Sub-Adviser
affiliate. In addition, the Portfolio Managers may invest client accounts in affiliated pooled vehicles. The Portfolio Managers
have an incentive to allocate investments to these types of affiliated accounts in order to generate additional fees for themselves or
their affiliates. In certain instances, Portfolio Managers may enter into revenue sharing arrangements with affiliates where they
may receive a portion of the fee, or bill the full fee to the client and reimburse the affiliate. Portfolio Managers also may enter
into wholesale arrangements with affiliates where they receive only a portion of the client fee. For certain accounts with affiliates,
some of the fees, such as custody fees, may be waived or rebated.
Conflicts
of Interest Relating to the Discretion to Redeem from and Invest in Pooled Investment Vehicles. The Portfolio Manager’s
clients may give them discretion to allocate client assets to, and/or redeem client assets from, certain pooled investment vehicles they
manage or sub-advise. Sometimes, such discretionary authority is restricted by asset allocation parameters which may limit the Portfolio
Manager’s discretion to allocate to a percentage range of the value of a client’s account. When a client grants Portfolio
Managers that discretion, a conflict could arise with respect to such client, and also with respect to other investors in such pooled
investment vehicle. The Portfolio Managers may, for example, have an incentive to maintain a larger percentage of a client’s
assets in a fund in order for such assets to act as seed capital, to increase the fund’s assets under management and thus, to make
investment by other investors more attractive, or to maintain the continuity of a performance record if the client is the sole remaining
investor. Likewise, as the manager or sub-adviser, they will have information that investors will not have about the investments
held by a fund and about other investors’ intentions to invest or redeem. Such information could potentially be used to favor
one investor over another.
Conflicts
of Interest Relating to “Proprietary Accounts”. The Portfolio Managers, and the Sub-Adviser’s existing and
future employees may from time to time invest in products managed by the Sub-Adviser and they or related persons may establish “seeded”
funds or accounts for the purpose of developing new investment strategies and products (collectively, “Proprietary Accounts”). Investment
by the Sub-Adviser, or its employees in Proprietary Accounts that invest in the same securities as other client accounts may create conflicts
of interest. Portfolio Managers have an incentive to favor these Proprietary Accounts by directing their best investment ideas to
these accounts or allocating, aggregating, or sequencing trades in favor of such accounts, to the disadvantage of other accounts. Portfolio
Managers also have an incentive to dedicate more time and attention to their Proprietary Accounts and to give them better execution and
brokerage commissions than their other client accounts. The Portfolio Managers also may waive fees for Proprietary Accounts or for
certain affiliated persons who invest in such Proprietary Accounts.
Valuations.
A majority of the Sub-Adviser’s fees are based on the valuations provided by clients’ custodians or pooled accounts’
administrators. However, a conflict of interest may arise in overseeing the valuation of investments in the limited situations where
the Sub-Adviser is involved in the determination of the valuation of an investment. In such circumstances, the Sub-Adviser requires,
to the extent possible, pricing from an independent third-party pricing vendor. If vendor pricing is unavailable, the Sub-Adviser
then looks to other observable inputs for the valuations. In the event that a vendor price or other observable inputs are unavailable
or deemed unreliable, the Sub-Adviser has established a Securities Pricing Committee to make a reasonable determination of a security’s
fair value.
Other
Conflicts of Interest. As noted previously, Portfolio Managers manage numerous accounts with a variety of interests. This
necessarily creates potential conflicts of interest for the Portfolio Managers. For example, Portfolio Managers may cause multiple
accounts to invest in the same investment. Such accounts may have conflicting interests and objectives in connection with such investment,
including differing views on the operations or activities of the portfolio company, the targeted returns for the transaction, and the
timeframe for and method of exiting the investment. Conflicts also may arise in cases where multiple Sub-Adviser and/or affiliate
client accounts are invested in different parts of an issuer’s capital structure. For example, one of the Portfolio Manager’s
client accounts could acquire debt obligations of a company while an affiliate’s client account acquires an equity investment. In
negotiating the terms and conditions of any such investments, Portfolio Managers may find that the interests of the debt-holding client
accounts and the equity-holding client accounts may conflict. If that issuer encounters financial problems, decisions over the terms
of the workout could raise conflicts of interest (including, for example, conflicts over proposed waivers and amendments to debt covenants). For
example, debt holding accounts may be better served by a liquidation of an issuer in which it could be paid in full, while equity holding
accounts might prefer a reorganization of the issuer that would have the potential to retain value for the equity holders. As another
example, holders of an issuer’s senior securities may be able to act to direct cash flows away from junior security holders, and
both the junior and senior security holders may be the Sub-Adviser’s client accounts. Any of the foregoing conflicts of interest
will be discussed and resolved on a case-by-case basis. Any such discussions will factor in the interests of the relevant parties
and applicable laws.
Addressing
Conflicts of Interest. Portfolio Managers have a fiduciary duty to manage all client accounts in a fair and equitable manner. To
accomplish this, the Sub-Adviser has adopted various policies and procedures (including, some or all of the following policies: trading
operations, best execution, trade order aggregation and allocation, short sales, cross-trading, code of conduct, personal securities
trading, and purchases of securities from affiliated underwriters). These procedures are intended to help employees identify and
mitigate potential side-by-side conflicts of interest such as those described above. The Sub-Adviser has also developed a conflicts
matrix listing potential side-by-side conflicts, the compliance policies and procedures reasonably designed to mitigate such potential
conflicts of interest and the corresponding compliance testing program established with the goal of confirming the Sub-Adviser’s
adherence to such policies and procedures.
Codes
of Ethics. The Trust and the Advisers have each adopted a Code of Ethics pursuant to Rule 17j-1 under the 1940 Act and Rule 204A-1
under the Advisers Act, where applicable. Each Code of Ethics permits personnel subject to that Code of Ethics to invest in securities
for their personal investment accounts, subject to certain limitations, including securities that may be purchased or held by the Fund.
Each Code of Ethics is on public file with, and is available from, the EDGAR Database on the SEC’s internet site at http://www.sec.gov,
and copies of these codes of ethics may be obtained, after paying a duplicating fee, by electronic request at the following email address:
[email protected]. The Distributor relies on the principal underwriters exception under Rule 17j-1(c)(3), specifically where the Distributor
is not affiliated with the Trust or the Advisers, and no officer, director, or general partner of the Distributor serves as an officer,
director, or general partner of the Trust or the Advisers.
Administrator,
Custodian, Transfer Agent and Securities Lending Agent. State Street Bank and Trust Company (“State Street”) serves
as administrator, custodian, transfer agent and securities lending agent for the Fund. State Street’s principal address is One
Lincoln Street, Boston, Massachusetts 02110. Under the Fund Administration Agreement with the Trust, State Street provides certain administrative,
legal, tax, and financial reporting services for the maintenance and operations of the Trust and the Fund. Under the Master Custodian
Agreement with the Trust, State Street acts as custodian of assets of the Trust, including securities which the Trust, on behalf of the
Fund, desires to be held in places within the United States and securities it desires to be held outside the United States, and provides
accounting and other services. State Street is required, upon the order of the Trust, to deliver securities held by State Street and
to make payments for securities purchased by the Trust and for the Fund. Also, under the Master Custodian Agreement, State Street is
authorized to appoint certain foreign custodians or foreign custody managers for Fund investments outside the United States. Pursuant
to a Transfer Agency and Service Agreement with the Trust, State Street acts as transfer agent for the authorized and issued shares of
beneficial interest for the Fund, and as dividend disbursing agent of the Trust. As compensation for the foregoing services, State Street
receives certain out-of-pocket costs, transaction fees and asset-based fees which are accrued daily and paid monthly. State Street also
serves as the Fund’s securities lending agent. As compensation for providing such services, State Street receives a portion of
the income earned by the Fund in connection with the lending program. With respect to the foregoing agreements, the Trust has agreed
to limitation of liability for State Street and/or to indemnify State Street for certain liabilities.
Securities
Lending Activities. State Street serves as securities lending agent to the Trust. As securities lending agent, State Street is
responsible for the implementation and administration of the securities lending program pursuant to the Securities Lending Authorization
Agreement (“Securities Lending Agreement”). State Street acts as agent to the Trust to lend available securities with any
person on its list of approved borrowers, including State Street Bank and Trust Company and any affiliate thereof. State Street determines
whether a loan shall be made and negotiates and establishes the terms and conditions of the loan with the borrower. State Street ensures
that all substitute interest, dividends, and other distributions paid with respect to loan securities is credited to the Fund’s
relevant account on the date such amounts are delivered by the borrower to State Street. State Street receives and holds, on the Fund’s
behalf, collateral from borrowers to secure obligations of borrowers with respect to any loan of available securities. State Street marks
loaned securities and collateral to their market value each business day based upon the market value of the collateral and loaned securities
at the close of business employing the most recently available pricing information and receives and delivers collateral in order to maintain
the value of the collateral at no less than 100% of the market value of the loaned securities. At the termination of the loan, State
Street returns the collateral to the borrower upon the return of the loaned securities to State Street. State Street invests cash collateral
in accordance with the Securities Lending Agreement. State Street maintains such records as are reasonably necessary to account for loans
that are made and the income derived therefrom and makes available to the Fund a monthly statement describing the loans made, and the
income derived from the loans, during the period. State Street performs compliance monitoring and testing of the securities lending program
and, on a monthly basis, State Street will make available to the Board a statement describing the outstanding loans and income made on
such loans during the period.
Distributor.
Foreside Fund Services, LLC serves as Distributor for the Trust and its principal address is Three Canal Plaza, Suite 100, Portland,
Maine 04101. The Distributor has entered into a Distribution Agreement with the Trust pursuant to which it distributes shares of the
Fund. The Distribution Agreement will continue for two years from its effective date and is renewable annually. Shares are continuously
offered for sale by the Fund through the Distributor only in Creation Unit Aggregations, as described in the Prospectus and below in
the Creation and Redemption of Creation Unit Aggregations section. Shares in less than Creation Unit Aggregations are not distributed
by the Distributor. The Distributor will deliver the Prospectus and, upon request, this SAI to persons purchasing Creation Unit Aggregations
and will maintain records of both orders placed with it and confirmations of acceptance furnished by it. The Distributor is a broker-dealer
registered under the 1934 Act and a member of the Financial Industry Regulatory Authority (“FINRA”). The Distributor is not
affiliated with WisdomTree, WisdomTree Asset Management, or any stock exchange.
The
Distribution Agreement may be terminated at any time, without the payment of any penalty, on at least sixty (60) days’ prior
written notice to the other party (i) by vote of a majority of the Independent Trustees or (ii) by vote of a majority of the
outstanding voting securities (as defined in the 1940 Act) of the Fund. The Distribution Agreement will terminate automatically in the
event of its “assignment” (as defined in the 1940 Act). The Distributor also may enter into agreements with securities dealers
(“Soliciting Dealers”) who will solicit purchases of Creation Unit Aggregations of shares. Such Soliciting Dealers also may
be Authorized Participants (as defined below) or DTC Participants (as defined below).
Intermediary
Compensation. WisdomTree Asset Management or its affiliates, out of their own resources and not out of Fund assets (i.e.,
without additional cost to the Fund or its shareholders), may pay or otherwise assist certain broker-dealers, registered investment advisers,
banks, other financial intermediaries and platforms (“Intermediaries”) for certain activities and/or services related to
the Fund, other WisdomTree Funds and/or model portfolios that include WisdomTree Funds, including for making WisdomTree Funds available
such as without a commission or transaction fee (or to otherwise offset such commissions or fees), for participation in activities that
are designed to make Intermediaries and investors more knowledgeable about exchange-traded products, including the Fund, for other activities,
such as marketing and educational training or support (such as through conferences, webinars and printed communications), for data, for
platform development and/or access, for technology support, for co-marketing and cross-promotional efforts, or to otherwise facilitate
education, relationships and/or investment. Payments made pursuant to such arrangements are expected to vary in any year, can be different
for different Intermediaries and third parties, and can be subject to certain minimum payment levels. Any such payments or other consideration
are not reflected in the fees and expenses listed in the fees and expenses sections of the Fund’s Prospectus and they do not change
the price paid by investors for the purchase of the Fund’s shares or the amount received by a shareholder as proceeds from the
redemption of Fund shares. Information regarding certain Intermediaries receiving such payments can be found by visiting www.wisdomtree.com/investments.
WisdomTree
Asset Management periodically assesses the advisability of continuing to make these payments. Payments to an Intermediary may be significant
to the Intermediary, and amounts that Intermediaries pay to your adviser, broker or other investment professional, if any, also may be
significant to such adviser, broker or investment professional. Because an Intermediary may make decisions about what investment options
it will make available or recommend, and what services to provide in connection with various products, based on payments it receives
or is eligible to receive, such payments create conflicts of interest between the Intermediary and its clients. For example, these financial
incentives may cause the Intermediary to recommend the Fund over other investments. The same conflict of interest exists with respect
to your financial adviser, broker or investment professionals if he or she receives similar payments from his or her Intermediary firm.
WisdomTree
Asset Management or its affiliates intend to engage with, and make payments to, other Intermediaries and third parties in the future.
Please contact your adviser, broker, other investment professional or other type of Intermediary and ask whether they have any such arrangements
with WisdomTree Asset Management or its affiliates and/or to receive more information regarding any payments such firm may receive. Any
payments made by WisdomTree Asset Management or its affiliates to an Intermediary may create the incentive for an Intermediary to encourage
customers to buy shares of WisdomTree Funds.
If
you have any additional questions, please call 1-866-909-9473.
BROKERAGE
TRANSACTIONS
The
Sub-Adviser assumes general supervision over placing orders on behalf of the Fund for the purchase and sale of portfolio securities.
In selecting the brokers or dealers for any transaction in portfolio securities, the Sub-Adviser’s policy is to make such selection
based on factors deemed relevant, including but not limited to, the breadth of the market in the security; the price of the security;
the reasonableness of the commission or mark-up or mark-down, if any; execution capability; settlement capability; back office efficiency;
and the financial condition of the broker or dealer, both for the specific transaction and on a continuing basis. The overall reasonableness
of brokerage commissions paid is evaluated by the Sub-Adviser based upon its knowledge of available information as to the general level
of commissions paid by other institutional investors for comparable services. Brokers also may be selected because of their ability to
handle special or difficult executions, such as may be involved in large block trades, less liquid or foreign securities, broad distributions,
or other circumstances. The Sub-Adviser does not consider the provision or value of research, products or services a broker or dealer
may provide, if any, as a factor in the selection of a broker or dealer or the determination of the reasonableness of commissions paid
in connection with portfolio transactions. The Trust has adopted policies and procedures that prohibit the consideration of sales of
the Fund’s shares as a factor in the selection of a broker or a dealer to execute its portfolio transactions. To the extent creation
or redemption transactions are conducted on a cash or “cash in lieu” basis, the Fund may contemporaneously transact with
broker-dealers for the purchase or sale of portfolio securities in connection with such transactions (see “Creation and Redemption
of Creation Unit Aggregations” herein). Such orders may be placed with an Authorized Participant in its capacity as broker-dealer
or with an affiliated broker-dealer of such Authorized Participant.
Brokerage
Commissions
The
Fund is new and, therefore, did not pay any brokerage commissions for the fiscal year ended August 31, 2023.
Affiliated
Brokers
The
Fund is new and, therefore, did not pay any commissions to any affiliated brokers for the fiscal year ended August 31, 2023.
Regular
Broker-Dealers
The
Fund is new and, therefore, did not acquire securities of its regular brokers or dealers (as defined in the 1940 Act) or of their parents
during the fiscal year ended August 31, 2023.
Portfolio
Turnover
Portfolio
turnover may vary from year to year, as well as within a year. High turnover rates are likely to result in comparatively greater brokerage
expenses and may result in a substantial amount of distributions from the Fund to be taxed as ordinary income which may limit the tax
efficiency of the Fund. The overall reasonableness of brokerage commissions is evaluated by the Sub-Adviser based upon its knowledge
of available information as to the general level of commissions paid by the other institutional investors for comparable services.
The
Fund is new and, therefore, did not have a portfolio turnover rate for the fiscal year ended August 31, 2023.
ADDITIONAL
INFORMATION CONCERNING THE TRUST
Shares.
The Trust was established as a Delaware statutory trust on December 15, 2005, and consists of multiple series or “funds.”
The Fund issues shares of beneficial interest, with $0.001 par value. The Board may establish additional funds. The Trust is registered
with the SEC as an open-end management investment company.
Each
share issued by the Fund has a pro rata interest in the assets of the Fund. Shares have no preemptive, exchange, subscription or conversion
rights and are freely transferable. Each share is entitled to participate equally in dividends and distributions declared by the Board
of Trustees with respect to the Fund, and in the net distributable assets of the Fund on liquidation.
Each
share has one vote with respect to matters upon which a shareholder vote is required consistent with the requirements of the 1940 Act
and the rules promulgated thereunder. Shares of all funds within the Trust vote together as a single class, except that if the matter
being voted on affects only a particular fund, or if a matter affects a particular fund differently from other funds, that fund will
vote separately on such matter.
Under
Delaware law, the Trust is not required to hold an annual meeting of shareholders unless required to do so under the 1940 Act. The policy
of the Trust is not to hold an annual meeting of shareholders unless required to do so under the 1940 Act. All shares have non-cumulative
voting rights for the Board. Under Delaware law, Trustees of the Trust may be removed by vote of the shareholders.
Following
the creation of the initial Creation Unit Aggregation(s) of shares of the Fund and immediately prior to the commencement of trading in
the Fund’s shares, a holder of shares may be a “control person” of the Fund, as defined in the 1940 Act. The Fund cannot
accurately predict the length of time for which one or more shareholders may remain a control person or persons of the Fund.
Shareholders
may make inquiries by writing to the Trust, c/o Foreside Fund Services, LLC, Three Canal Plaza, Suite 100, Portland, Maine 04101.
Absent
an applicable exemption or other relief from the SEC or its staff, beneficial owners of more than 5% of the shares of the Fund may be
subject to the reporting provisions of Section 13 of the 1934 Act and the SEC’s rules promulgated thereunder. In addition,
absent an applicable exemption or other relief from the SEC staff, officers and Trustees of the Fund and beneficial owners of 10% of
the shares of the Fund (“Insiders”) may be subject to the insider reporting, short-swing profit and short-sale provisions
of Section 16 of the 1934 Act and the SEC’s rules promulgated thereunder. Beneficial owners and Insiders should consult with
their own legal counsel concerning their obligations under Sections 13 and 16 of the 1934 Act.
Termination
of the Trust or the Fund. The Trust or the Fund may be terminated by a majority vote of the Board of Trustees or the affirmative
vote of a super-majority of the holders of the Trust or the Fund entitled to vote on termination. Although the shares are not automatically
redeemable upon the occurrence of any specific event, the Trust’s organizational documents provide that the Board will have the
unrestricted power to alter the number of shares in a Creation Unit Aggregation. In the event of a termination of the Trust or the Fund,
the Board, in its sole discretion, could determine to permit the shares to be redeemable in aggregations smaller than Creation Unit Aggregations
or to be individually redeemable. In such circumstances, the Trust may make redemptions in kind, for cash, or for a combination of cash
and securities.
Role
of the Depositary Trust Company (“DTC”). DTC acts as Securities Depository for the shares of the Trust. Shares of
the Fund are represented by securities registered in the name of DTC or its nominee and deposited with, or on behalf of, DTC.
DTC,
a limited-purpose trust company, was created to hold securities of its participants (“DTC Participants”) and to facilitate
the clearance and settlement of securities transactions among the DTC Participants in such securities through electronic book-entry changes
in accounts of the DTC Participants, thereby eliminating the need for physical movement of securities’ certificates. DTC Participants
include securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations, some of which
(and/or their representatives) own DTC. More specifically, DTC is owned by a number of DTC Participants and by the NYSE and FINRA. Access
to the DTC system also is available to others such as banks, brokers, dealers and trust companies that clear through or maintain a custodial
relationship with a DTC Participant, either directly or indirectly (“Indirect Participants”).
Beneficial
ownership of shares is limited to DTC Participants, Indirect Participants and persons holding interests through DTC Participants and
Indirect Participants. Ownership of beneficial interests in shares (owners of such beneficial interests are referred to herein as “Beneficial
Owners”) is shown on, and the transfer of ownership is effected only through, records maintained by DTC (with respect to DTC Participants)
and on the records of DTC Participants (with respect to Indirect Participants and Beneficial Owners that are not DTC Participants). Beneficial
Owners will receive from or through the DTC Participant a written confirmation relating to their purchase of shares. No Beneficial Owner
shall have the right to receive a certificate representing such shares.
Conveyance
of all notices, statements and other communications to Beneficial Owners is effected as follows. Pursuant to the Depositary Agreement
between the Trust and DTC, DTC is required to make available to the Trust upon request and for a fee to be charged to the Trust a listing
of the shares of the Fund held by each DTC Participant. The Trust shall inquire of each such DTC Participant as to the number of Beneficial
Owners holding shares, directly or indirectly, through such DTC Participant. The Trust shall provide each such DTC Participant with copies
of such notice, statement or other communication, in such form and number and at such place as such DTC Participant may reasonably request,
in order that such notice, statement or communication may be transmitted by such DTC Participant, directly or indirectly, to such Beneficial
Owners. In addition, the Trust shall pay to each such DTC Participant a fair and reasonable amount as reimbursement for the expenses
attendant to such transmittal, all subject to applicable statutory and regulatory requirements. The foregoing processes may be conducted
by the Trust via a third party.
Share
distributions shall be made to DTC or its nominee, Cede & Co., as the registered holder of all shares of the Trust. DTC or its
nominee, upon receipt of any such distributions, shall immediately credit DTC Participants’ accounts with payments in amounts proportionate
to their respective beneficial interests in shares of the Fund as shown on the records of DTC or its nominee. Payments by DTC Participants
to Indirect Participants and Beneficial Owners of shares held through such DTC Participants will be governed by standing instructions
and customary practices, as is now the case with securities held for the accounts of customers in bearer form or registered in a “street
name,” and will be the responsibility of such DTC Participants.
The
Trust has no responsibility or liability for any aspect of the records relating to or notices to Beneficial Owners, or payments made
on account of beneficial ownership interests in such shares, or for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests, or for any other aspect of the relationship between DTC and the DTC Participants or the relationship
between such DTC Participants and the Indirect Participants and Beneficial Owners owning through such DTC Participants. DTC may decide
to discontinue its service with respect to shares of the Trust at any time by giving reasonable notice to the Trust and discharging its
responsibilities with respect thereto under applicable law. Under such circumstances, the Trust shall take action to find a replacement
for DTC to perform its functions at a comparable cost.
CREATION
AND REDEMPTION OF CREATION UNIT AGGREGATIONS
Creation.
The Trust issues and sells shares of the Fund only in Creation Unit Aggregations on a continuous basis through the Distributor,
without a sales load, at the NAV next determined after receipt, on any Business Day, of an order in proper form.
Fund
Deposit. The consideration for purchase of Creation Unit Aggregations of the Fund generally consists of the in-kind deposit of
a portfolio of equity securities (the “Deposit Securities”) and/or an amount of cash denominated in U.S. dollars (the “Cash
Component”) computed as described below. Together, the Deposit Securities and the Cash Component constitute the “Fund Deposit,”
which represents the minimum initial and subsequent investment amount for a Creation Unit Aggregation of the Fund.
The
Fund or Advisers may permit or require the submission of a basket of securities and other instruments, or cash denominated in U.S. dollars
that differs from the composition of the published basket(s). The Fund or Advisers may permit or require the consideration for Creation
Unit Aggregations to consist solely of cash. The Fund or Advisers reserve the right to permit or require the substitution of an amount
of cash denominated in U.S. dollars (i.e., a “cash in lieu” amount) to be added, at its discretion, to the Cash Component
to replace any Deposit Security. For example, cash may be substituted to replace any Deposit Security that may not be available in sufficient
quantity for delivery or that may not be eligible for transfer through the systems of DTC or the Clearing Process (discussed below).
The Trust or Advisers reserve the right to permit or require a “cash in lieu” amount where the delivery of the Deposit Security
by the Authorized Participant (as described below) would be prohibited or restricted under applicable securities laws, or in certain
other situations at the sole discretion of the Trust.
The
portion of the Cash Component that does not serve to replace a Deposit Security is sometimes also referred to as the “Balancing
Amount.” The Balancing Amount is an amount equal to the difference between the NAV of the shares (per Creation Unit Aggregation)
and the value of Deposit Securities. If the Balancing Amount is a positive number, the Authorized Participant will deliver the Balancing
Amount. If the Balancing Amount is a negative number, the Authorized Participant will receive the Balancing Amount. The Balancing Amount
does not include any stamp duty tax or other similar fees and expenses payable upon transfer of beneficial ownership of the Deposit Securities.
These are the sole responsibility of the Authorized Participant.
The
Fund, through the National Securities Clearing Corporation (“NSCC”), makes available on each Business Day, immediately prior
to the opening of business on the Listing Exchange (currently 9:30 a.m., Eastern time), the list of the names and the required number
of shares of each Deposit Security and/or applicable Cash Component that may be included in the current Fund Deposit (based on information
at the end of the previous Business Day) for the Fund.
Such
Deposit Securities are applicable, subject to any adjustments as described herein, in order to effect creations of Creation Unit Aggregations
of the Fund until such time as the next or otherwise announced composition of the Deposit Securities is made available.
The
identity and number of shares of the Deposit Securities required for the Fund Deposit for the Fund changes from time to time based on
changes to the Fund’s Index and various factors.
Procedures
for Creation of Creation Unit Aggregations. To be eligible to place orders with the Distributor and to create a Creation Unit
Aggregation of the Fund, an entity must be a (i) “Participating Party,” i.e., a broker-dealer or other participant
in the clearing process through the Continuous Net Settlement System of the NSCC (the “Clearing Process”), a clearing agency
that is registered with the SEC; or (ii) DTC Participant. In each case, such entity also must have executed an agreement with the Distributor
with respect to creations and redemptions of Creation Unit Aggregations (a “Participant Agreement”). A Participating Party
or DTC Participant that has entered a Participant Agreement is referred to as an “Authorized Participant.” Investors should
contact the Distributor for the names of Authorized Participants that have signed a Participant Agreement. All shares of the Fund, however
created, will be entered on the records of DTC in the name of Cede & Co. for the account of a DTC Participant.
All
orders to create shares must be placed for one or more Creation Unit Aggregations. All orders to create Creation Unit Aggregations must
be received by the Distributor by the designated closing time, which is no later than the closing time of the regular trading session
on the Listing Exchange (“Closing Time”) (ordinarily 4:00 p.m., Eastern time) on the date such orders are placed in order
to receive that day’s NAV. All orders must be received in proper form. The date on which an order to create Creation Unit Aggregations
is placed is referred to as the “Transmittal Date.” Orders must be transmitted by an Authorized Participant by telephone,
online portal or other transmission method acceptable to State Street and the Distributor pursuant to procedures set forth in the Participant
Agreement, as described below, which procedures may change from time to time without notice at the discretion of the Trust. Economic
or market disruptions or changes, or telephone or other communication failure, may impede the ability to reach State Street and the Distributor
or an Authorized Participant. On days when the Listing Exchange or U.S. or non-U.S. markets close earlier than normal, the Fund may require
purchase orders to be placed earlier in the day. All questions as to the number of Deposit Securities and/or Cash Component to be
delivered, and the validity, form and eligibility (including time of receipt) for the deposit of any tendered securities, will be determined
by the Trust or Advisers, whose determination shall be final and binding.
All
orders to create Creation Unit Aggregations through an Authorized Participant shall be placed with an Authorized Participant, in the
form required by such Authorized Participant. In addition, the Authorized Participant may require an investor to make certain representations
or enter into agreements with respect to the order, e.g., to provide for payments of cash, when required. Investors should be
aware that their particular broker may not have executed a Participant Agreement and, in that case, orders to create Creation Unit Aggregations
of the Fund have to be placed by each investor’s broker through an Authorized Participant that has executed a Participant Agreement.
In such cases, there may be additional charges to such investor. At any given time, there may be only a limited number of broker-dealers
that have executed a Participant Agreement and only a small number of such Authorized Participants may have international capabilities.
Those
placing orders for Creation Unit Aggregations through the Clearing Process should afford sufficient time to permit proper submission
of the order to the Distributor prior to the Closing Time on the Transmittal Date. Orders for Creation Unit Aggregations that are effected
outside the Clearing Process are likely to require transmittal by the DTC Participant earlier on the Transmittal Date than orders effected
using the Clearing Process. Those persons placing orders outside the Clearing Process should ascertain the deadlines applicable to DTC
and the Federal Reserve Bank wire system by contacting the operations department of the broker or depository institution effectuating
such transfer of Deposit Securities and the Cash Component.
Placement
of Creation Orders Using the Clearing Process. Fund Deposits made through the Clearing Process must be delivered through a Participating
Party that has executed a Participant Agreement. The Participant Agreement authorizes the Distributor or State Street to transmit through
State Street to NSCC, on behalf of the Participating Party, such trade instructions as are necessary to effect the Participating Party’s
creation order. Pursuant to such trade instructions to NSCC, the Participating Party agrees to deliver the requisite Deposit Securities
and the Cash Component to the Trust, together with such additional information as may be required by the Distributor. An order to create
Creation Unit Aggregations through the Clearing Process is deemed received by the Distributor on the Transmittal Date if: (i) such
order is received by the Distributor not later than the Closing Time on such Transmittal Date; and (ii) all other procedures set
forth in the Participant Agreement are properly followed.
Placement
of Creation Orders Outside the Clearing Process. Fund Deposits made outside the Clearing Process must be delivered through a
DTC Participant that has executed a Participant Agreement. A DTC Participant who wishes to place an order creating Creation Unit Aggregations
to be effected outside the Clearing Process does not need to be a Participating Party, but such orders must state that the DTC Participant
is not using the Clearing Process and that the creation of Creation Unit Aggregations will instead be effected through a transfer of
securities and cash directly through DTC. The Fund Deposit transfer must be ordered by the DTC Participant on the Transmittal Date in
a timely fashion so as to ensure the delivery of the requisite number of Deposit Securities through DTC to the account of the Fund by
no later than 2:00 p.m., Eastern time, on the “Settlement Date.” The Settlement Date is typically the second Business Day
following the Transmittal Date. The Fund reserves the right to settle transactions on a basis other than “T” plus two Business
Days (i.e., days on which the NYSE is open) (“T+2”). In certain cases Authorized Participants will create and redeem
Creation Unit Aggregations of the same Fund on the same trade date. In these instances, the Trust reserves the right to settle these
transactions on a net basis.
On
days when the Listing Exchange or U.S. markets close earlier than normal, the Fund may require purchase orders to be placed earlier in
the day. All questions as to the number of Deposit Securities and/or Cash Component to be delivered, and the validity, form and eligibility
(including time of receipt) for the deposit of any tendered securities, will be determined by the Trust or Advisers, whose determination
shall be final and binding. The amount of cash equal to the Cash Component must be transferred directly to State Street through the Federal
Reserve Bank wire transfer system in a timely manner so as to be received by State Street no later than 2:00 p.m., Eastern time on the
Settlement Date. An order to create Creation Unit Aggregations outside the Clearing Process is deemed received by the Distributor on
the Transmittal Date if: (i) such order is received by the Distributor not later than the Closing Time on such Transmittal Date;
and (ii) all other procedures set forth in the Participant Agreement are properly followed. However, if State Street does not receive
both the required Deposit Securities and the Cash Component by the specified time on the Settlement Date, the Trust may cancel or revoke
acceptance of such order. Upon written notice to the Distributor, such canceled or revoked order may be resubmitted the following Business
Day using the Fund Deposit as newly constituted to reflect the then-current NAV of the Fund. The delivery of Creation Unit Aggregations
so created generally will occur no later than the Settlement Date.
Creation
Unit Aggregations may be created in advance of receipt by the Trust of all or a portion of the applicable Deposit Securities as described
below. In these circumstances, the initial deposit will have a value greater than the NAV of the shares on the date the order is placed
in proper form since, in addition to available Deposit Securities, U.S. cash must be deposited in an amount equal to the sum of (i) the
Cash Component, plus (ii) generally between 102%-110%, as directed by the Trust or Advisers, which the Trust or Advisers may change
from time to time, of the market value of the undelivered Deposit Securities (the “Additional Cash Deposit”) with the Fund
pending delivery of any missing Deposit Securities.
If
an Authorized Participant determines to post an Additional Cash Deposit as collateral for any undelivered Deposit Securities, the Authorized
Participant must deposit with State Street the appropriate amount of federal funds by 2:00 p.m., Eastern time (or such other time as
specified by the Trust), on the Settlement Date. If the Authorized Participant does not place its purchase order by the closing time
or State Street does not receive federal funds in the appropriate amount by such time, then the order may be deemed to be rejected and
the Authorized Participant shall be liable to the Fund for losses, if any, resulting therefrom. An additional amount of cash shall be
required to be deposited with State Street, pending delivery of the missing Deposit Securities to the extent necessary to maintain the
Additional Cash Deposit with the Trust in an amount generally between 102%-110%, as directed by the Trust or Advisers, which the Trust
or Advisers may change from time to time, of the daily marked-to-market value of the missing Deposit Securities. To the extent that missing
Deposit Securities are not received by the specified time, on the Settlement Date, or in the event a marked-to-market payment is not
made within one Business Day following notification by the Distributor that such a payment is required, the Trust may use the Additional
Cash Deposit to purchase the missing Deposit Securities. The Trust also requires delivery of Deposit Securities and/or an Additional
Cash Deposit prior to settlement date by the Authorized Participant in relation to certain international markets.
The
Authorized Participant will be liable to the Trust for the costs incurred by the Trust in connection with any such purchases. These costs
will be deemed to include the amount by which the actual purchase price of the Deposit Securities exceeds the market value of such Deposit
Securities on the Transmittal Date plus the brokerage and related transaction costs associated with such purchases. The Trust will return
any unused portion of the Additional Cash Deposit once all of the missing Deposit Securities have been properly received by State Street
or purchased by the Trust and deposited into the Trust. In addition, a Transaction Fee, as listed below, will be charged in all cases.
The delivery of Creation Unit Aggregations so created generally will occur no later than the Settlement Date. In no event will an Authorized
Participant receive or be entitled to interest or other consideration associated with or in relation to the Additional Cash Deposit.
Cash
Purchases. When, in the sole discretion of the Trust or Advisers, cash purchases of Creation Unit Aggregations of shares are
available or specified for the Fund, such purchases shall be effected in essentially the same manner as in-kind purchases thereof. In
the case of a cash purchase, the Authorized Participant must pay the cash equivalent of the Deposit Securities it would otherwise be
required to provide through an in-kind purchase, plus the same Cash Component required to be paid by an in-kind purchaser. In addition,
to offset brokerage and other costs associated with using cash to purchase the requisite Deposit Securities, the Authorized Participant
must pay the Transaction Fees required by the Fund. If the Authorized Participant acts as a broker for the Fund in connection with the
purchase of Deposit Securities, the Authorized Participant also will be required to pay certain brokerage commissions, taxes, and transaction
and market impact costs as discussed under the heading “Brokerage Transactions” herein.
Acceptance
of Orders for Creation Unit Aggregations. The Trust reserves the right to reject or revoke acceptance of a creation order transmitted
to it by the Distributor with respect to the Fund. Orders may be rejected and acceptance may be revoked if, for example: (i) the
order is not in proper form; (ii) the investor(s), upon obtaining the shares ordered, would own 80% or more of the currently outstanding
shares of the Fund; (iii) the Deposit Securities delivered are not the same as those disseminated through the facilities of the
NSCC for that date by the Fund as described above; (iv) acceptance of the Fund Deposit would, in the opinion of counsel, be unlawful;
(v) acceptance of the Fund Deposit would otherwise, in the discretion of the Trust or WisdomTree Asset Management, have an adverse
effect on the Trust or the rights of beneficial owners; or (vi) in the event that circumstances outside the control of the Trust,
State Street, the Distributor or WisdomTree Asset Management make it for all practical purposes impossible to process creation orders.
Examples of such circumstances include acts of God; public service or utility problems such as fires, floods, extreme weather conditions
and power outages resulting in telephone, telecopy and computer failures; market conditions or activities causing trading halts; systems
failures involving computer or other information systems affecting the Trust, WisdomTree Asset Management, the Distributor, DTC, NSCC,
State Street or a sub-custodian or any other participant in the creation process and similar extraordinary events. The Distributor shall
notify a prospective creator of a Creation Unit and/or the Authorized Participant acting on behalf of the creator of a Creation Unit
Aggregation of its rejection of the order of such person. The Trust, State Street, a sub-custodian and the Distributor are under no duty,
however, to give notification of any defects or irregularities in the delivery of Fund Deposits nor shall any of them incur any liability
for the failure to give any such notification.
All
questions as to the number of shares of each security in the Deposit Securities and the validity, form, eligibility and acceptance for
deposit of any securities to be delivered shall be determined by the Trust, and the Trust’s determination shall be final and binding.
Creation/Redemption
Transaction Fee. The Fund imposes a “Transaction Fee” or “CU Fee” on Authorized Participants purchasing
or redeeming Creation Units. The purpose of the Transaction Fee is to protect the existing shareholders of the Fund from the dilutive
costs associated with the purchase and redemption of Creation Units. Where the Fund permits cash creations (or redemptions) or cash in
lieu of depositing one or more Deposit Securities, the purchaser (or redeemer) may be assessed a higher Transaction Fee to offset the
transaction cost to the Fund of buying (or selling) those particular Deposit Securities. Transaction Fees for the Fund will differ from
Transaction Fees for other WisdomTree Funds, depending on the transaction expenses related to the Fund’s portfolio securities,
and will be limited to amounts that have been determined by WisdomTree Asset Management to be appropriate. The maximum Transaction Fee,
as set forth in the table below for the Fund, may be charged in cases where the Fund permits cash or cash in lieu of Deposit Securities.
Authorized Participants purchasing or redeeming through the DTC process generally will pay a higher Transaction Fee than will Authorized
Participants doing so through the NSCC process. Also, Authorized Participants who use the services of a broker or other such intermediary
may be charged a fee for such services, in addition to the Transaction Fee imposed by the Fund.
The
following table sets forth the standard and maximum creation and redemption Transaction Fees for the Fund. These fees may be changed
by the Trust.
Fund |
CU Fee* |
Maximum |
||
WisdomTree Bianco Fixed Income Total Return Fund |
[$__] | [$____] |
* | The Fund may charge, either in lieu of or in addition to the Transaction Fees, in the sole discretion of the Trust or as determined by the Adviser, a variable fee for creations and redemptions in order to cover certain brokerage, tax, foreign exchange, execution, market impact and other costs and expenses related to the execution of trades resulting from such transaction, up to any applicable legal limits. The Adviser may pay out of its own resources and not out of Fund assets, such Transaction Fees or variable fees from time to time in its sole discretion. Any such fees and/or payments by the Adviser may impact bid/ask spreads. |
Placement
of Redemption Orders for Using the Clearing Process. Orders to redeem Creation Unit Aggregations through the Clearing Process
must be delivered through a Participating Party that has executed the Participant Agreement. Except as described herein, an order to
redeem Creation Unit Aggregations using the Clearing Process is deemed received by the Trust on the Transmittal Date if: (i) such
order is received by State Street (in its capacity as Transfer Agent) not later than the Closing Time on such Transmittal Date, and (ii) all
other procedures set forth in the Participant Agreement are properly followed. Such order will be effected based on the NAV of the Fund
as next determined. The consideration for redemption of Creation Unit Aggregations of the Fund generally consists of (i) a portfolio
of securities (the “Fund Securities”) and/or (ii) an amount of cash denominated in U.S. dollars (the “Cash Redemption
Amount”) as described below. The requisite Fund Securities and the Cash Redemption Amount generally will be transferred by the
second NSCC Business Day following the date on which such request for redemption is deemed received.
Placement
of Redemption Orders Outside the Clearing Process. Orders to redeem Creation Unit Aggregations outside the Clearing Process must
be delivered through a DTC Participant that has executed the Participant Agreement. An order to redeem Creation Unit Aggregations outside
the Clearing Process is deemed received by the Trust on the Transmittal Date if: (i) such order is received by State Street (in
its capacity as Transfer Agent) not later than the Closing Time on such Transmittal Date; (ii) such order is accompanied or followed
by the requisite number of shares of the Fund specified in such order, which delivery must be made through DTC to State Street no later
than instructed, which is typically one day after Transmittal Date (presuming T+2 settlement); and (iii) all other procedures set
forth in the Participant Agreement are properly followed. After the Trust has deemed an order for redemption outside the Clearing Process
received, the Trust will initiate procedures to transfer the requisite Fund Securities which are expected to be delivered within two
Business Days and the Cash Redemption Amount to the Authorized Participant on behalf of the redeeming Beneficial Owner by the Settlement
Date. In certain cases, Authorized Participants will redeem and create Creation Unit Aggregations of the same Fund on the same trade
date. In these instances, the Trust reserves the right to settle these transactions on a net basis.
If
the requisite number of shares of the Fund is not delivered as described above or an Additional Cash Deposit is not made, as applicable,
in the sole discretion of the Trust or Advisers, in no event will an Authorized Participant receive or be entitled to interest or other
consideration associated with or in relation to the Additional Cash Deposit, the Fund may reject or revoke acceptance of the redemption
request because the Authorized Participant has not satisfied all of the settlement requirements.
The
current procedures for collateralization of missing shares require, among other things, that any Additional Cash Deposit shall be in
the form of U.S. dollars in immediately available funds and shall be held by State Street and marked-to-market daily, and that the fees
of State Street and any sub-custodians in respect of the delivery, maintenance and redelivery of the Additional Cash Deposit shall be
payable by the Authorized Participant. The Authorized Participant’s agreement will permit the Trust, on behalf of the affected
Fund, to purchase the missing shares or acquire the Deposit Securities and the Cash Component underlying such shares at any time and
will subject the Authorized Participant to liability for any shortfall between the cost to the Trust of purchasing such shares, Deposit
Securities or Cash Component and the value of the collateral.
The
calculation of the value of the Fund Securities and the Cash Redemption Amount to be delivered upon redemption will be made by State
Street according to the procedures set forth under “Determination of NAV” computed on the Business Day on which a redemption
order is deemed received by the Trust.
The
Fund or the Advisers also may, in their sole discretion, upon request of an Authorized Participant, provide such redeemer a portfolio
of securities that differs from the exact composition of the Fund Securities but does not differ in NAV. Redemptions of shares for Fund
Securities will be subject to compliance with applicable federal and state securities laws and the Fund (whether or not it otherwise
permits cash redemptions) reserves the right to redeem Creation Unit Aggregations for cash to the extent that the Trust could not lawfully
deliver specific Fund Securities upon redemptions or could not do so without first registering the Fund Securities under such laws. An
Authorized Participant or an investor for which it is acting subject to a legal restriction with respect to a particular security included
in the Fund Securities applicable to the redemption of a Creation Unit Aggregation may be paid an equivalent amount of cash. The Authorized
Participant may request the redeeming Beneficial Owner of the shares to complete an order form or to enter into agreements with respect
to such matters as compensating cash payment.
Because
the portfolio securities of the Fund may trade on the relevant exchange(s) on days that the Listing Exchange is closed or that are otherwise
not Business Days for the Fund, stockholders may not be able to redeem their shares of the Fund, or to purchase and sell shares of the
Fund on the Listing Exchange, on days when the NAV of the Fund could be significantly affected by events in the relevant foreign markets.
Cash
Redemptions. The Fund may pay out the proceeds of redemptions of Creation Unit Aggregations solely in cash or through any combination
of cash, securities or other instruments. In addition, an investor may request a redemption in cash that the Fund may, in its sole discretion,
permit. In either case, the investor will receive a cash payment equal to the NAV of its shares based on the NAV of shares of the Fund
next determined after the redemption request is received in proper form (minus a redemption transaction fee and additional charge for
requested cash redemptions specified above, to offset the Trust’s brokerage and other transaction costs associated with the disposition
of Fund Securities). Proceeds will be paid to the Authorized Participant redeeming shares on behalf of the redeeming investor as soon
as practicable after the date of redemption. If the Authorized Participant acts as a broker for the Fund in connection with the sale
of Fund Securities, the Authorized Participant also will be required to pay certain brokerage commissions, taxes, and transaction and
market impact costs as discussed under the heading “Brokerage Transactions” herein.
Redemptions
of shares for Fund Securities will be subject to compliance with applicable federal and state securities laws and the Fund (whether or
not it otherwise permits cash redemptions) reserves the right to redeem Creation Unit Aggregations for cash to the extent that the Trust
could not lawfully deliver specific Fund Securities upon redemptions or could not do so without first registering the Fund Securities
under such laws.
In-Kind
Redemptions. The ability of the Trust to effect in-kind creations and redemptions is subject, among other things, to the condition
that, within the time period from the date of the order to the date of delivery of the securities, there are no days that are holidays
in the applicable foreign market. For every occurrence of one or more intervening holidays in the applicable foreign market that are
not holidays observed in the U.S. equity market, the redemption settlement cycle may be extended by the number of such intervening holidays.
In addition to holidays, other unforeseeable closings in a foreign market due to emergencies also may prevent the Trust from delivering
securities within the normal settlement period. The Fund will not suspend or postpone redemption beyond seven days, except as permitted
under Section 22(e) of the 1940 Act. Section 22(e) provides that the right of redemption may be suspended or the date of payment
postponed with respect to the Fund (1) for any period during which the New York Stock Exchange (“NYSE”) is closed (other
than customary weekend and holiday closings); (2) for any period during which trading on the NYSE is suspended or restricted; (3) for
any period during which an emergency exists as a result of which disposal of the shares of the Fund’s portfolio securities or determination
of its NAV is not reasonably practicable; or (4) in such other circumstance as is permitted by the SEC.
REGULAR
HOLIDAYS AND OTHER SETTLEMENT MATTERS
The
Fund generally intends to effect deliveries of Creation Unit Aggregations and portfolio securities on a basis of T+2. The Fund may effect
deliveries of Creation Unit Aggregations and portfolio securities on a basis other than T+2 in order to accommodate local holiday schedules,
to account for different treatment among foreign and U.S. markets of security delivery practices and/or dividend record dates and ex-dividend
dates, or under certain other circumstances. The ability of the Trust to effect in-kind creations and redemptions within two Business
Days of receipt of an order in good form is subject, among other things, to the condition that, within the time period from the date
of the order to the date of delivery of the securities, there are no days that are holidays in the applicable foreign market. For every
occurrence of one or more intervening holidays in the applicable foreign market that are not holidays observed in the U.S. equity market,
the redemption settlement cycle will be extended by the number of such intervening holidays. New or special holidays, treatment by market
participants of certain days as “informal holidays” (e.g., days on which no or limited securities transactions occur,
as a result of substantially shortened trading hours), the elimination of existing holidays or changes in local securities delivery practices
(including lengthening settlement cycles, which also may occur in connection with a security sale and its settlement, with limitations
or delays in the settlement itself and/or the convertibility or repatriation of the local proceeds associated therewith), could impede
the Fund’s ability to satisfy redemption requests in a timely manner. In addition, other unforeseeable closings or changes in a
foreign market due to emergencies also may prevent the Trust from delivering redemption proceeds within the normal settlement period
or in a timely manner.
The
securities delivery cycles currently practicable for transferring portfolio securities to redeeming investors, coupled with foreign market
holiday schedules, will require a delivery process longer than seven calendar days for some securities, in certain circumstances.
TAXES
The
following discussion of certain U.S. federal income tax consequences of investing in the Fund is based on the Code, U.S. Treasury regulations
promulgated thereunder (“Treasury Regulations”), and other applicable authority, all as in effect as of the date of the filing
of this SAI. These authorities are subject to change by legislative or administrative action, possibly with retroactive effect. The following
discussion is only a summary of some of the important U.S. federal income tax considerations generally applicable to investments in the
Fund. There may be other tax considerations applicable to particular shareholders. Shareholders should consult their own tax advisors
regarding their particular situation and the possible application of foreign, state, and local tax laws.
Qualification
as a Regulated Investment Company. The Fund intends to elect to be treated, and intends to qualify each year, as a RIC under
Subchapter M of the Code. In order to qualify for the special tax treatment accorded RICs and their shareholders, the Fund must, among
other things:
(a) | derive at least 90% of its gross income each year from (i) dividends, interest, payments with respect to certain securities loans, gains from the sale or other disposition of stock or securities or foreign currencies, or other income (including but not limited to gains from options, futures or forward contracts) derived with respect to its business of investing in such stock, securities or currencies, and (ii) net income derived from interests in “qualified publicly traded partnerships” (as defined below) (the “90% Test”); |
(b) | diversify its holdings so that, at the end of each quarter of its taxable year, (i) at least 50% of the market value of the Fund’s total assets consists of cash and cash items, U.S. government securities, securities of other RICs and other securities, with investments in such other securities limited with respect to any one issuer to an amount not greater than 5% of the value of the Fund’s total assets and not greater than 10% of the outstanding voting securities of such issuer, and (ii) not more than 25% of the value of the Fund’s total assets is invested, including through corporations in which the Fund owns a 20% or more or more voting stock interest, in (1) the securities (other than those of the U.S. government or other RICs) of any one issuer or two or more issuers that are controlled by the Fund and that are engaged in the same, similar or related trades or businesses or (2) the securities of one or more qualified publicly traded partnerships; and |
(c) | distribute with respect to each taxable year an amount equal to or greater than the sum of 90% of its investment company taxable income (as that term is defined in the Code without regard to the deduction for dividends paid – generally taxable ordinary income and the excess, if any, of net short-term capital gains over net long-term capital losses) and 90% of its net tax-exempt interest income. |
In
general, for purposes of the 90% Test described in (a) above, income derived from a partnership will be treated as qualifying income
only to the extent such income is attributable to items of income of the partnership that would be qualifying income if realized directly
by the Fund. However, 100% of the net income derived from an interest in a “qualified publicly traded partnership” (generally,
a partnership (i) interests in which are traded on an established securities market or are readily tradable on a secondary market
or the substantial equivalent thereof, and (ii) that derives less than 90% of its income from the qualifying income described in
clause (a)(i) of the description of the 90% Test applicable to RICs, above ) will be treated as qualifying income. To the extent the
Fund makes investments that may generate income that is not qualifying income, including certain derivatives, the Fund will seek to restrict
the resulting income from such investments so that the Fund’s non-qualifying income does not exceed 10% of its gross income.
Taxation
of the Fund. If the Fund qualifies for treatment as a RIC, the Fund will not be subject to federal income tax on income and gains
that are distributed in a timely manner to its shareholders in the form of dividends.
If,
for any taxable year, the Fund was to fail to qualify as a RIC or was to fail to meet the distribution requirement described above, it
would be taxed in the same manner as an ordinary corporation and distributions to its shareholders would not be deductible by the Fund
in computing its taxable income. In addition, the Fund’s distributions, to the extent derived from the Fund’s current and
accumulated earnings and profits, including any distributions of net long-term capital gains, would be taxable to shareholders as ordinary
dividend income for federal income tax purposes. However, such dividends would be eligible, subject to any generally applicable limitations,
(i) to be treated as qualified dividend income in the case of shareholders taxed as individuals and (ii) for the dividends
received deduction in the case of corporate shareholders. Moreover, the Fund would be required to pay out its earnings and profits accumulated
in that year in order to qualify for treatment as a RIC in a subsequent year. Under certain circumstances, the Fund may be able to cure
a failure to qualify as a RIC, but in order to do so the Fund may incur significant Fund-level taxes and may be forced to dispose of
certain assets. If the Fund failed to qualify as a RIC for a period greater than two taxable years, the Fund would generally be required
to recognize any net built-in gains with respect to certain of its assets upon a disposition of such assets within five years of qualifying
as a RIC in a subsequent year.
The
Fund intends to distribute at least annually to its shareholders substantially all of its investment company taxable income (computed
without regard to the dividends paid deduction) and its net capital gain (the excess of the Fund’s net long-term capital gain over
its net short-term capital loss). Investment income that is retained by the Fund will generally be subject to tax at the regular 21%
corporate rate. If the Fund retains any net capital gain, that gain will be subject to tax at the 21% corporate rate, but the Fund may
designate the retained amount as undistributed capital gains in a notice to its shareholders who (i) will be required to include
in income for federal income tax purposes, as long-term capital gain, their shares of such undistributed amount, (ii) will be deemed
to have paid their proportionate shares of the tax paid by the Fund on such undistributed amount against their federal income tax liabilities,
if any, and (iii) will be entitled to claim refunds on a properly filed U.S. tax returns to the extent the credit exceeds such liabilities.
For federal income tax purposes, the tax basis of shares owned by a shareholder of the Fund will be increased by an amount equal to the
difference between the amount of undistributed capital gains included in the shareholder’s gross income and the tax deemed paid
by the shareholder.
If
the Fund fails to distribute in a calendar year an amount at least equal to the sum of 98% of its ordinary income for such year and 98.2%
of its capital gain net income for the one-year period ending October 31 of such year, plus any retained amount from the prior year,
the Fund will be subject to a non-deductible 4% excise tax on the undistributed amount. For these purposes, the Fund will be treated
as having distributed any amount on which it has been subject to corporate income tax for the taxable year ending within the calendar
year. The Fund intends to declare and pay dividends and distributions in the amounts and at the times necessary to avoid the application
of the 4% excise tax, although there can be no assurance that it will be able to do so.
The
Fund may elect to treat part or all of any “qualified late year loss” as if it had been incurred in the succeeding taxable
year in determining the Fund’s taxable income, net capital gain, net short-term capital gain, and earnings and profits. A “qualified
late year loss” generally includes net capital loss, net long-term capital loss, or net short-term capital loss incurred after
October 31 of the current taxable year, and certain other late-year losses.
The
treatment of capital loss carryovers for the Fund is similar to the rules that apply to capital loss carryovers of individuals, which
provide that such losses are carried over indefinitely. If the Fund has a “net capital loss” (that is, capital losses in
excess of capital gains), the excess of the Fund’s net short-term capital losses over its net long-term capital gains is treated
as a short-term capital loss arising on the first day of the Fund’s next taxable year, and the excess (if any) of the Fund’s
net long-term capital losses over its net short-term capital gains is treated as a long-term capital loss arising on the first day of
the Fund’s next taxable year. In addition, the carryover of capital losses may be limited under the general loss limitation rules
if the Fund experiences an ownership change as defined in the Code.
Fund
Distributions. Distributions are generally taxable whether shareholders receive them in cash or reinvest them in additional shares.
Moreover, distributions on the Fund’s shares are generally subject to federal income tax as described herein to the extent they
do not exceed the Fund’s realized income and gains, even though such distributions may economically represent a return of a particular
shareholder’s investment. Investors may therefore wish to avoid purchasing shares at a time when the Fund’s NAV reflects
gains that are either unrealized, or realized but not distributed. Realized income and gains must generally be distributed even when
the Fund’s NAV also reflects unrealized losses.
Dividends
and other distributions by the Fund are generally treated under the Code as received by the shareholders at the time the dividend or
distribution is made. However, if any dividend or distribution is declared by the Fund in October, November or December of any calendar
year and payable to its shareholders of record on a specified date in such a month but is actually paid during the following January,
such dividend or distribution will be deemed to have been received by each shareholder on December 31 of the year in which the dividend
was declared.
Distributions
by the Fund of net short-term capital gains are generally taxable as ordinary income. Taxes on distributions of capital gains are determined
by how long the Fund owned the assets that generated those gains, rather than how long a shareholder has owned his or her Fund shares.
Sales of assets held by the Fund for more than one year generally result in long-term capital gains and losses, and sales of assets held
by the Fund for one year or less generally result in short-term capital gains and losses. Distributions from the Fund’s net capital
gain that are properly reported by the Fund as capital gain dividends (“Capital Gain Dividends”) will be taxable as long-term
capital gains. For individuals, long-term capital gains are subject to tax at reduced maximum tax rates. Distributions of gains from
the sale of investments that the Fund owned for one year or less will be taxable as ordinary income.
For
non-corporate shareholders, distributions of investment income reported by the Fund as derived from “qualified dividend income”
will be taxed at the rates applicable to long-term capital gain, provided holding period and other requirements are met at both the shareholder
and Fund level. In order for some portion of the dividends received by the Fund shareholder to be “qualified dividend income,”
the Fund making the distribution must meet holding period and other requirements with respect to some portion of the dividend-paying
stocks in its portfolio and the shareholder must meet holding period and other requirements with respect to the Fund’s shares.
A dividend will not be treated as qualified dividend income (at either the Fund or shareholder level) (1) if the dividend is received
with respect to any share of stock held for fewer than 61 days during the 121-day period beginning on the date that is 60 days before
the date on which such share becomes ex-dividend with respect to such dividend (or, in the case of certain preferred stock, 91 days during
the 181-day period beginning 90 days before the ex-dividend date), (2) to the extent that the recipient is under an obligation (whether
pursuant to a short sale or otherwise) to make related payments with respect to positions in substantially similar or related property,
(3) if the recipient elects to have the dividend income treated as investment income for purposes of the limitation on deductibility
of investment interest, or (4) if the dividend is received from a foreign corporation that is (a) not eligible for the benefits
of a comprehensive income tax treaty with the United States (with the exception of dividends paid on stock of such a foreign corporation
that is readily tradable on an established securities market in the United States) or (b) treated as a passive foreign investment
company. Dividends received by the Fund, an underlying fund taxable as a RIC, or from a REIT may be treated as qualified dividend income
generally only to the extent so reported by such underlying fund or REIT. The investment strategies of the Fund is expected to significantly
limit its ability to make distributions eligible for the reduced tax rates applicable to qualified dividend income.
Certain
dividends received by the Fund on stock of U.S. corporations (generally, dividends received by the Fund in respect of any share of stock
(1) as to which the Fund has met certain holding period requirements and (2) that is held in an unleveraged position) may be eligible
for the dividends received deduction, generally available to corporate shareholders under the Code, provided such dividends also are
appropriately reported as eligible for the dividends received deduction by the Fund. In order to qualify for the dividends received deduction,
corporate shareholders must also meet minimum holding period requirements with respect to the Fund shares, taking into account any holding
period reductions from certain hedging or other transactions or positions that diminish their risk of loss with respect to the Fund shares.
The investment strategies of the Fund are expected to significantly limit its ability to distribute dividends eligible for the dividends
received deduction for corporations.
To
the extent that the Fund makes a distribution of income received by the Fund in lieu of dividends (a “substitute payment”)
with respect to securities on loan pursuant to a securities lending transaction, such income will not constitute qualified dividend income
to individual shareholders and will not be eligible for the dividends received deduction for corporate shareholders.
To
the extent the Fund invests in municipal securities that are exempt from U.S. federal income tax, the Fund may designate certain dividends
as exempt-interest dividends to the extent of the Fund’s tax-exempt interest income. The Fund will only be eligible to pay exempt-interest
dividends if at the close of each quarter of the Fund’s taxable year at least 50% of the Fund’s total assets consist of securities
exempt from U.S. federal income tax. Exempt-interest dividends distributed to shareholders of the Fund are excluded from gross income
for U.S. federal income tax purposes. However, such exempt-interest dividends may be subject to the alternative minimum tax. Exempt-interest
dividends, if any, received by the Fund as a result of an investment in another RIC will not be passed through to a shareholder unless
the Fund qualifies as a “qualified fund-of-funds” under the Code. The Fund will be treated as a “qualified fund-of-funds”
under the Code if at least 50% of the value of the Fund’s total assets (at the close of each quarter of the Fund’s taxable
year) is represented by interests in other RICs. If the Fund is a “qualified fund-of-funds” it will be eligible to distribute
exempt-interest dividends without regard to whether 50% of the Fund’s total asset consist of securities exempt from U.S. federal
income tax and thereby pass through to its shareholders the tax-exempt character of interest on tax-exempt obligations and exempt-interest
dividends it receives from underlying funds.
A
RIC that receives business interest income may pass through its net business interest income for purposes of the tax rules applicable
to the interest expense limitations under Section 163(j) of the Code. A RIC’s total “Section 163(j) Interest Dividend”
for a tax year is limited to the excess of the RIC’s business interest income over the sum of its business interest expense and
its other deductions properly allocable to its business interest income. A RIC may, in its discretion, designate all or a portion of
ordinary dividends as Section 163(j) Interest Dividends, which would allow the recipient shareholder to treat the designated portion
of such dividends as interest income for purposes of determining such shareholder’s interest expense deduction limitation under
Section 163(j) of the Code. This can potentially increase the amount of a shareholder’s interest expense deductible under Section
163(j) of the Code. In general, to be eligible to treat a Section 163(j) Interest Dividend as interest income, shareholders must have
held their shares in the Fund for more than 180 days during the 361-day period beginning on the date that is 180 days before the date
on which the shares become ex-dividend with respect to such dividend. Section 163(j) Interest Dividends, if so designated by the Fund,
will be reported to your financial intermediary or otherwise in accordance with the requirements specified by the Internal Revenue Service
(the “IRS”).
Dividends
and distributions from the Fund and capital gain on the sale of Fund shares are generally taken into account in determining a shareholder’s
“net investment income” for purposes of the net investment income tax applicable to certain individuals, estates and trusts.
If
the Fund makes distributions in excess of the Fund’s current and accumulated earnings and profits in any taxable year, the excess
distribution to each shareholder will be treated as a return of capital to the extent of the shareholder’s tax basis in its shares,
and will reduce the shareholder’s tax basis in its shares. After the shareholder’s basis has been reduced to zero, any such
distributions will result in a capital gain, assuming the shareholder holds his or her shares as capital assets. A reduction in a shareholder’s
tax basis in its shares, will reduce any loss or increase any gain on a subsequent taxable disposition by the shareholder of its shares.
Sale
or Exchange of Shares. A sale or exchange of shares in the Fund may give rise to a gain or loss. For tax purposes, an exchange
of a shareholder’s Fund Shares for shares of a different fund is the same as a sale. In general, and assuming that shares are held
as a capital asset, any gain or loss realized upon a taxable disposition of shares will be treated as long-term capital gain or loss
if the shares have been held for more than 12 months. Otherwise, the gain or loss on the taxable disposition of shares will be treated
as short-term capital gain or loss. However, any loss realized upon a taxable disposition of shares held for six months or less will
be treated as long-term, rather than short-term, to the extent of any long-term capital gain distributions received (or deemed received)
by the shareholder with respect to the shares. All or a portion of any loss realized upon a taxable disposition of shares will be disallowed
if substantially identical shares of the Fund are purchased within 30 days before or after the disposition. In such a case, the basis
of the newly purchased shares will be adjusted to reflect the disallowed loss.
Backup
Withholding. The Fund (or financial intermediaries, such as brokers, through which a shareholder holds Fund shares) generally
is required to withhold and to remit to the U.S. Treasury a percentage of the taxable distributions and sale or redemption proceeds paid
to any shareholder who fails to properly furnish a correct taxpayer identification number, who has under-reported dividend or interest
income, or who fails to certify that he, she or it is not subject to such withholding. The backup withholding tax rate is 24%. Backup
withholding is not an additional tax. Any amounts withheld may be credited against the shareholder’s U.S. federal income tax liability,
provided the appropriate information is furnished to the IRS.
Tax
Treatment of Complex Securities. The Fund may invest in complex securities. These investments may be subject to numerous special
and complex tax rules. To the extent the Fund invests in an underlying fund that is taxable as a RIC, the following discussion regarding
the tax treatment of complex securities also will apply to the underlying funds that also invest in such complex securities. These rules
could affect the Fund’s ability to qualify as a RIC, affect whether gains and losses recognized by the Fund is treated as ordinary
income or capital gain, accelerate the recognition of income to the Fund and/or defer the Fund’s ability to recognize losses, and,
in limited cases, subject a Fund to U.S. federal income tax on income from certain of their foreign securities. In turn, these rules
may affect the amount, timing or character of the income distributed to you by the Fund and may require the Fund to sell securities to
mitigate the effect of these rules and prevent disqualification of the Fund as a RIC at a time when the advisers might not otherwise
have chosen to do so.
Any
market discount recognized on a bond is taxable as ordinary income. A market discount bond is a bond acquired in the secondary market
at a price below redemption value or adjusted issue price if issued with original issue discount. Absent an election by the Fund to include
the market discount in income as it accrues, gain on the Fund’s disposition of such an obligation will be treated as ordinary income
rather than capital gain to the extent of the accrued market discount.
The
Fund may invest in inflation-linked debt securities. Any increase in the principal amount of an inflation-linked debt security will be
original interest discount, which is taxable as ordinary income and is required to be distributed, even though the Fund will not receive
the principal, including any increase thereto, until maturity. As noted above, if the Fund invests in such securities it may be required
to liquidate other investments, including at times when it is not advantageous to do so, in order to satisfy its distribution requirements
and to eliminate any possible taxation at the Fund level.
Non-U.S.
Shareholders. In general, dividends, other than Capital Gain Dividends, paid by the Fund to a shareholder that is not a “U.S.
person” within the meaning of the Code are subject to withholding of U.S. federal income tax at a rate of 30% (or lower applicable
treaty rate) on distributions derived from taxable ordinary income. The Fund may, under certain circumstances, report all or a portion
of a dividend as an “interest related dividend” or a “short term capital gain dividend,” which would generally
be exempt from this 30% U.S. withholding tax, provided certain other requirements are met. Short term capital gain dividends received
by a nonresident alien individual who is present in the U.S. for a period or periods aggregating 183 days or more during the taxable
year are not exempt from this 30% withholding tax.
A
beneficial holder of shares who is a non-U.S. person is not, in general, subject to U.S. federal income tax on gains (and is not allowed
a U.S. income tax deduction for losses) realized on a sale of shares of the Fund or on Capital Gain Dividends unless (i) such gain
or dividend is effectively connected with the conduct of a trade or business carried on by such holder within the United States or (ii) in
the case of an individual holder, the holder is present in the United States for a period or periods aggregating 183 days or more during
the year of the sale or the receipt of the Capital Gain Dividend and certain other conditions are met.
Under
legislation generally known as “FATCA” (the Foreign Account Tax Compliance Act), the Fund is required to withhold 30% of
certain ordinary dividends it pays to shareholders that fail to meet prescribed information reporting or certification requirements.
In general, no such withholding will be required with respect to a U.S. person or non-U.S. person that timely provides the certifications
required by the Fund or its agent on a valid IRS Form W-9 or applicable series of IRS Form W-8, respectively. Shareholders potentially
subject to withholding include foreign financial institutions (“FFIs”), such as non-U.S. investment funds, and non-financial
foreign entities (“NFFEs”). To avoid withholding under FATCA, an FFI generally must enter into an information sharing agreement
with the IRS in which it agrees to report certain identifying information (including name, address, and taxpayer identification number)
with respect to its U.S. account holders (which, in the case of an entity shareholder, may include its direct and indirect U.S. owners),
and an NFFE generally must identify and provide other required information to the Fund or other withholding agent regarding its U.S.
owners, if any. Such non-U.S. shareholders also may fall into certain exempt, excepted or deemed compliant categories as established
by regulations and other guidance. A non-U.S. shareholder resident or doing business in a country that has entered into an intergovernmental
agreement with the U.S. to implement FATCA will be exempt from FATCA withholding provided that the shareholder and the applicable foreign
government comply with the terms of the agreement.
In
order for a non-U.S. investor to qualify for an exemption from backup withholding, described above, the non-U.S. investor must comply
with special certification and filing requirements. Non-U.S. investors in the Fund should consult their tax advisors in this regard.
A
beneficial holder of shares who is a non-U.S. person may be subject to state and local tax and to the U.S. federal estate tax in addition
to the federal income tax consequences referred to above. If a shareholder is eligible for the benefits of a tax treaty, any income or
gain effectively connected with a U.S. trade or business will generally be subject to U.S. federal income tax on a net basis only if
it also is attributable to a permanent establishment maintained by the shareholder in the United States.
Creation
and Redemption of Creation Units. An Authorized Participant having the U.S. dollar as its functional currency for U.S. federal
income tax purposes that exchanges securities for Creation Units generally will recognize a gain or loss equal to the difference between
(i) the sum of the market value of the Creation Units at the time of the exchange and any cash received by the Authorized Participant
in the exchange and (ii) the sum of the exchanger’s aggregate basis in the securities or non-U.S. currency surrendered and
any cash paid for such Creation Units. All or a portion of any gain or loss recognized by an Authorized Participant exchanging a currency
other than its functional currency for Creation Units may be treated as ordinary income or loss. A person who redeems Creation Units
will generally recognize a gain or loss equal to the difference between the exchanger’s basis in the Creation Units and the sum
of the aggregate U.S. dollar market value of any securities or non-U.S. currency received plus the amount of any cash received for such
Creation Units. The IRS, however, may assert that a loss that is realized by an Authorized Participant upon an exchange of securities
or non-U.S. currency for Creation Units may not be currently deducted, under the rules governing “wash sales,” (for an Authorized
Participant that does not mark-to-market its holdings), or on the basis that there has been no significant change in economic position.
All or some portion of any capital gain or loss realized upon the creation of Creation Units in exchange for securities will generally
be treated as long-term capital gain or loss if securities exchanged for such Creation Units have been held for more than one year.
A
person subject to U.S. federal income tax with the U.S. dollar as its functional currency for U.S. federal income tax purposes who receives
non-U.S. currency upon a redemption of Creation Units and does not immediately convert the non-U.S. currency into U.S. dollars may, upon
a later conversion of the non-U.S. currency into U.S. dollars, or upon the use of the non-U.S. currency to pay expenses or acquire assets,
recognize as ordinary gains or losses any gains or losses resulting from fluctuations in the value of the non-U.S. currency relative
to the U.S. dollar since the date of the redemption.
Persons
exchanging securities or non-U.S. currency for Creation Units should consult their own tax advisors with respect to the tax treatment
of any creation or redemption transaction and whether the wash sales rules apply and when a loss might be deductible.
Section
351. The Trust on behalf of the Fund has the right to reject an order for Creation Units if the purchaser (or any group of purchasers)
would, upon obtaining the shares so ordered, own 80% or more of the outstanding shares of the Fund and if, pursuant to Section 351
of the Code, the Fund would have a basis in the securities different from the market value of such securities on the date of deposit.
The Trust also has the right to require information necessary to determine beneficial share ownership for purposes of the 80% determination.
If the Fund does issue Creation Units to a purchaser (or a group of purchasers) that would, upon obtaining the Creation Units so ordered,
own 80% or more of the outstanding Shares, the purchaser (or a group of purchasers) will not recognize gain or loss upon the exchange
of securities for Creation Units.
Certain
Reporting Treasury Regulations. Under Treasury Regulations, generally, if a shareholder recognizes a loss of $2 million or more
for an individual shareholder or $10 million or more for a corporate shareholder (or certain greater amounts over a combination of years),
the shareholder must file with the IRS a disclosure statement on IRS Form 8886. Direct shareholders of portfolio securities are in many
cases excepted from this reporting requirement, but under current guidance shareholders of a RIC are not excepted. Significant penalties
may be imposed for the failure to comply with the reporting Treasury Regulations. The fact that a loss is reportable under these Treasury
Regulations does not affect the legal determination of whether the taxpayer’s treatment of the loss is proper. Shareholders should
consult their tax advisors to determine the applicability of these Treasury Regulations in light of their individual circumstances.
Cost
Basis Reporting. The cost basis of shares acquired by purchase will generally be based on the amount paid for the shares and
then may be subsequently adjusted for other applicable transactions as required by the Code. The difference between the selling price
and the cost basis of shares generally determines the amount of the capital gain or loss realized on the sale or exchange of shares.
Contact the broker through whom you purchased your shares to obtain information with respect to the available cost basis reporting methods
and elections for your account.
Foreign
Taxes. Dividends and interest received by the Fund may be subject to income, withholding or other taxes imposed by foreign countries
and U.S. possessions that would reduce the yield on the Fund’s stock or securities. Tax conventions between certain countries and
the United States may reduce or eliminate these taxes. Foreign countries generally do not impose taxes on capital gains with respect
to investments by foreign investors. If more than 50% of the value of the Fund’s total assets at the close of its taxable year
consists of stocks or securities of foreign corporations, the Fund will be eligible to file an election with the IRS that may enable
shareholders, in effect, to receive either the benefit of a foreign tax credit, or a deduction from such taxes, with respect to any foreign
and U.S. possessions income taxes paid by the Fund, subject to certain limitations. Pursuant to the election, such Fund will treat those
taxes as dividends paid to its shareholders. Each such shareholder will be required to include a proportionate share of those taxes in
gross income as income received from a foreign source and must treat the amount so included as if the shareholder had paid the foreign
tax directly. The shareholder may then either deduct the taxes deemed paid by him or her in computing his or her taxable income or, alternatively,
use the foregoing information in calculating any foreign tax credit they may be entitled to use against the shareholders’ federal
income tax. If the Fund makes the election, such Fund (or its administrative agent) will report annually to its shareholders the respective
amounts per share of the Fund’s income from sources within, and taxes paid to, foreign countries and U.S. possessions. If the Fund
does not hold sufficient foreign securities to meet the above threshold, then shareholders will not be entitled to claim a credit or
further deduction with respect to foreign taxes paid by the Fund.
Foreign
tax credits, if any, received by the Fund as a result of an investment in another RIC will not be passed through to a shareholder unless
the Fund qualifies as a “qualified fund-of-funds” under the Code. If the Fund is a “qualified fund-of-funds”
it will be eligible to file an election with the IRS that will enable the Fund to pass along these foreign tax credits to its shareholders.
The Fund will be treated as a “qualified fund-of-funds” under the Code if at least 50% of the value of the Fund’s total
assets (at the close of each quarter of the Fund’s taxable year) is represented by interests in other RICs.
General
Considerations. The federal income tax discussion set forth above is for general information only. Prospective investors should
consult their tax advisors regarding the specific federal income tax consequences of purchasing, holding and disposing of shares of the
Fund, as well as the effect of state, local and foreign tax law and any proposed tax law changes.
DETERMINATION
OF NAV
The
NAV of the Fund’s shares is calculated each day the Fund is open for business as of the regularly scheduled close of regular trading
on the Listing Exchange, normally 4:00 p.m. Eastern Time (the “NAV Calculation Time”). NAV per share is calculated by
dividing the Fund’s net assets by the number of Fund shares outstanding.
In
calculating the Fund’s NAV, the Fund generally values: (i) equity securities (including
common stocks and preferred stock) traded on any recognized U.S. or non-U.S. exchange at the last sale price or official closing price
on the exchange or system on which they are principally traded; (ii) unlisted equity securities (including preferred stock) at the
last quoted sale price or, if no sale price is available, at the mean between the highest bid and lowest ask price; and (iii) short-term
debt securities with remaining maturities of 60 days or less at current market quotations or mean prices obtained from broker-dealers
or independent pricing service providers. U.S. fixed income assets may be valued as of the announced closing time for such securities
on any day that the Securities Industry and Financial Markets Association announces an early closing time. The values of any assets or
liabilities of the Fund that are denominated in a currency other than the U.S. dollar are converted into U.S. dollars using an exchange
rate in accordance with the Board-approved valuation procedures. In addition, the Fund may invest in money market funds which are valued
at their NAV per share and affiliated ETFs which are valued at their last sale or official closing price on the exchange on which they
are principally traded.
Pursuant
to Board-approved valuation procedures established by the Trust and the Adviser (the “Procedures”), the Board has appointed
the Adviser as the Fund’s valuation designee (the “Valuation Designee”) to perform all fair valuations of the Fund’s
portfolio investments, subject to the Board’s oversight. As the Valuation Designee, the Adviser has established procedures for
its fair valuation of the Fund’s portfolio investments. These procedures address, among other things, determining when market quotations
are not readily available or reliable and the methodologies to be used for determining the fair value of investments, as well as the
use and oversight of third-party pricing services for fair valuation. As the Valuation Designee, the Adviser is responsible for the establishment
and application, in a consistent manner, of appropriate methodologies for determining the fair value of investments, periodically reviewing
the selected methodologies used for continuing appropriateness and accuracy, and making any changes or adjustments to the methodologies
as appropriate.
Fund
holdings that may be valued using “fair value” pricing may include, but are not limited to, securities for which there are
no current market quotations or whose issuer is in default or bankruptcy, securities subject to corporate actions (such as mergers or
reorganizations), securities subject to non-U.S. investment limits or currency controls, securities affected by “significant events”
and derivatives. An example of a significant event is an event occurring after the close of the market in which a security trades but
before the Fund’s next NAV Calculation Time that may materially affect the value of the Fund’s investment (e.g., government
action, natural disaster, or significant market fluctuation). Price movements in U.S. markets that are deemed to affect the value of
foreign securities, or reflect changes to the value of such securities, also may cause securities to be “fair valued.”
The
sale price the Fund could receive for a security or other asset may differ from the Fund’s valuation of the security or other asset
and/or from the value used by its index (if applicable), particularly for securities or other assets that trade in low volume or volatile
markets or that are valued using a fair value methodology. The use of fair valuation in pricing a security involves the consideration
of a number of subjective factors and, therefore, is susceptible to the unavoidable risk that the valuation may be higher or lower than
the price at which the security might actually trade if a reliable market price were readily available. In addition, particularly for
the Fund holding foreign securities or assets, the value of the securities or other assets in the Fund’s portfolio may change on
days or during time periods when shareholders will not be able to purchase or sell the Fund’s shares. As a result, the price received
upon the sale of an investment may be less than the value ascribed by the Fund, and the Fund could realize a greater than expected loss
or lesser than expected gain upon the sale of the investment. The Fund’s ability to value its investment also may be impacted by
technological issues, pricing methodology issues and/or errors by pricing services or other third-party service providers.
Fund
shares are purchased or sold on a national securities exchange at market prices, which may be higher or lower than NAV. No secondary
sales will be made to brokers or dealers at a concession by the Distributor or by the Fund. Purchases and sales of shares in the secondary
market, which will not involve the Fund, will be subject to customary brokerage commissions and charges. Transactions in Fund shares
will be priced at NAV only if you purchase or redeem shares directly from the Fund in Creation Units.
DIVIDENDS
AND DISTRIBUTIONS
The
Fund intends to pay out dividends, if any, on a monthly basis but in any event no less frequently than annually. Nonetheless, the Fund
may not make a dividend payment every month.
The
Fund intends to distribute its net realized capital gains, if any, to investors annually. The Fund may occasionally be required to make
supplemental distributions at some other time during the year. Distributions in cash may be reinvested automatically in additional whole
shares only if the broker through whom you purchased shares makes such option available. Your broker is responsible for distributing
the income and capital gain distributions to you.
The
Trust reserves the right to declare special distributions if, in its reasonable discretion, such action is necessary or advisable to
preserve the status of the Fund as a RIC or to avoid imposition of income or excise taxes on undistributed income.
FINANCIAL
STATEMENTS
Financial
Statements and Annual Reports will be available after the Fund has completed a fiscal year of operations. When available, you may request
a copy of the Trust’s Annual Report at no charge by calling 866-909-9473 or through the Trust’s website at www.wisdomtree.com/investments.
MISCELLANEOUS
INFORMATION
Counsel.
Morgan, Lewis & Bockius LLP, with offices located at 1111 Pennsylvania Avenue, NW, Washington, DC 20004, serves as legal
counsel to the Trust.
Independent
Registered Public Accounting Firm. [ ], with offices located at [ ], serves as the independent registered public accounting firm
to the Trust.
WIS-SAI-XXXX-XXX
PART C – OTHER INFORMATION
(a)(1) | Certificate of Trust, as filed with the State of Delaware on December 15, 2005, is incorporated herein by reference to Exhibit (a)(2) to the Registrant’s Initial Registration Statement on Form N-1A (File Nos. 333-132380 and 811-21864), as filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 13, 2006. |
(a)(2) | Trust Instrument of WisdomTree Trust (the “Trust” or the “Registrant”) dated December 15, 2005 (the “Trust Instrument”) is incorporated herein by reference to Exhibit (a)(1) to the Registrant’s Initial Registration Statement on Form N-1A (File Nos. 333-132380 and 811-21864), as filed with the SEC on March 13, 2006. |
(a)(3) | Schedule A Series of Trust, dated January 25, 2023, to the Trust Instrument is incorporated herein by reference to Exhibit (a)(3) to Post-Effective Amendment No. 889 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-132380 and 811-21864), as filed with the SEC on January 25, 2023. |
(a)(4) | Schedule A Series of Trust to the Trust Instrument, reflecting the addition of the WisdomTree Bianco Fixed Income Total Return Fund, to be filed by amendment. |
(b) | Registrant’s By-Laws, as amended June 16, 2016, are incorporated herein by reference to Exhibit (b) to Post-Effective Amendment No. 563 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-132380 and 811-21864), as filed with the SEC on July 28, 2016. |
(c) | Portions of the Registrant’s Trust Instrument and By-Laws defining the rights of holders of shares of the Registrant are incorporated herein by reference to Article II, Sections 2, 3 and 8, and Articles III, IV, V, VI, VII, VIII, IX and X of the Registrant’s Trust Instrument, filed as Exhibit (a)(1) to the Registrant’s Initial Registration Statement on Form N-1A, as filed with the SEC on March 13, 2006; and to Articles I, V, and VI of the Registrant’s By-Laws, filed as Exhibit (b) to the Registrant’s Initial Registration Statement on Form N-1A, as filed with SEC on March 13, 2006. |
(d)(1) | Investment Advisory Agreement dated November 20, 2012 between the Registrant and WisdomTree Asset Management, Inc. is incorporated herein by reference to Exhibit (d)(1) to Post-Effective Amendment No. 142 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-132380 and 811-21864), as filed with the SEC on December 28, 2012. |
(d)(2) | Schedule A, dated as of January 18, 2021, to the Investment Advisory Agreement dated November 20, 2012 between the Registrant and WisdomTree Asset Management, Inc. is incorporated herein by reference to Exhibit (d)(2) to Post-Effective Amendment No. 842 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-132380 and 811-21864), as filed with the SEC on January 14, 2022. |
(d)(3) | Investment Advisory Agreement dated March 26, 2013 between the Registrant and WisdomTree Asset Management, Inc. is incorporated herein by reference to Exhibit (d)(3) to Post-Effective Amendment No. 198 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-132380 and 811-21864), as filed with the SEC on July 29, 2013. |
(d)(4) | Schedule A, dated as of January 25, 2023, to the Investment Advisory Agreement dated March 26, 2013 between the Registrant and WisdomTree Asset Management, Inc. is incorporated herein by reference to Exhibit (d)(4) to Post-Effective Amendment No. 889 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-132380 and 811-21864), as filed with the SEC on January 25, 2023. |
(d)(5) | Schedule A to the Investment Advisory Agreement dated March 26, 2013 between the Registrant and WisdomTree Asset Management, Inc., reflecting the addition of the WisdomTree Bianco Fixed Income Total Return Fund, to be filed by amendment. |
(d)(6) | Amended and Restated Sub-Advisory Agreement dated January 1, 2013 between WisdomTree Asset Management, Inc. and Mellon Investments Corporation (the “Mellon Sub-Advisory Agreement”) is incorporated herein by reference to Exhibit (d)(6) to Post-Effective Amendment No. 144 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-132380 and 811-21864), as filed with the SEC on January 11, 2013. |
(d)(7) | Amended and Restated Appendix A, dated December 6, 2022, to the Mellon Sub-Advisory Agreement is incorporated by reference to Exhibit (d)(7) to Post-Effective Amendment No. 886 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-132380 and 811-21864), as filed with the SEC on December 9, 2022. |
(d)(8) | Investment Sub-Advisory Agreement dated April 4, 2016 between WisdomTree Asset Management, Inc. and Voya Investment Management Co., LLC (the “Voya Sub-Advisory Agreement”) is incorporated herein by reference to Exhibit (d)(10) to Post-Effective Amendment No. 541 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-132380 and 811-21864), as filed with the SEC on April 14, 2016. |
(d)(9) | Appendix A, as of January 25, 2023, to the Voya Sub-Advisory Agreement is incorporated by reference to Exhibit (d)(8) to Post-Effective Amendment No. 889 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-132380 and 811-21864), as filed with the SEC on January 25, 2023. |
(d)(10) |
Sub-Advisory Agreement dated September 1, 2021 between WisdomTree Asset Management, Inc. and Newton Investment Management North America, LLC (the “Newton Sub-Advisory Agreement”) is incorporated herein by reference to Exhibit (d)(8) to Post-Effective Amendment No. 808 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-132380 and 811-21864), as filed with the SEC on September 10, 2021. |
(d)(11) |
Appendix A, effective as of October 5, 2021, to the Newton Sub-Advisory Agreement is incorporated herein by reference to Exhibit (d)(12) to Post-Effective Amendment No. 817 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-132380 and 811-21864), as filed with the SEC on October 5, 2021. |
(d)(12) | Sub-Advisory Agreement between WisdomTree Asset Management, Inc. and [Sub-Adviser], relating to the WisdomTree Bianco Fixed Income Total Return Fund, to be filed by amendment. |
(d)(13) | Investment Advisory Agreement dated February 19, 2008 between WisdomTree Asset Management, Inc. and WisdomTree India Investment Portfolio, Inc. is incorporated herein by reference to Exhibit (d)(7) to Post-Effective Amendment No. 14 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-132380 and 811-21864), as filed with the SEC on April 4, 2008. |
(e)(1) | ETF Distribution Agreement dated May 31, 2017 between the Registrant and Foreside Fund Services, LLC (the “Initial Distribution Agreement”) is incorporated herein by reference to Exhibit (e)(1) to Post-Effective Amendment No. 634 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-132380 and 811-21864), as filed with the SEC on July 27, 2018. |
(e)(2) |
Novated Distribution Agreement dated September 30, 2021 between the Registrant and Foreside Fund Services, LLC (the “Novated Distribution Agreement” and together with the Initial Distribution Agreement, the “Amended Distribution Agreement”) is incorporated herein by reference to Exhibit (e)(2) to Post-Effective Amendment No. 842 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-132380 and 811-21864), as filed with the SEC on January 14, 2022. |
(e)(3) | Exhibit A, as of January 25, 2023, to the Amended Distribution Agreement is incorporated herein by reference to Exhibit (e)(3) to Post-Effective Amendment No. 889 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-132380 and 811-21864), as filed with the SEC on January 25, 2023. |
(e)(4) | Exhibit A to the Amended Distribution Agreement, reflecting the addition of the WisdomTree Bianco Fixed Income Total Return Fund, to be filed by amendment. |
(e)(5) | Form of Authorized Participant Agreement is incorporated herein by reference to Exhibit (e)(2) to the Registrant’s Initial Registration Statement on Form N-1A (File Nos. 333-132380 and 811-21864), as filed with the SEC on March 13, 2006. |
(f) | Not applicable. |
(g)(1) | Master Custodian Agreement dated September 27, 2013 between the Registrant and State Street Bank and Trust Company (the “Custodian Agreement”) is incorporated herein by reference to Exhibit (g)(1) to Post-Effective Amendment No. 346 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-132380 and 811-21864), as filed with the SEC on March 31, 2014. |
(g)(2) | Revised Appendix A, as of January 25, 2023, to the Custodian Agreement is incorporated herein by reference to Exhibit (g)(2) to Post-Effective Amendment No. 889 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-132380 and 811-21864), as filed with the SEC on January 25, 2023. |
(g)(3) | Revised Appendix A to the Custodian Agreement, reflecting the addition of the WisdomTree Bianco Fixed Income Total Return Fund, to be filed by amendment. |
(h)(1) | Administration Agreement dated September 27, 2013 between the Registrant and State Street Bank and Trust Company (the “Administration Agreement”) is incorporated herein by reference to Exhibit (h)(1) to Post-Effective Amendment No. 346 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-132380 and 811-21864), as filed with the SEC on March 31, 2014. |
(h)(2) | Transfer Agency and Service Agreement dated September 27, 2013 between the Registrant and State Street Bank and Trust Company (the “Transfer Agency and Service Agreement”) is incorporated herein by reference to Exhibit (h)(3) to Post-Effective Amendment No. 346 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-132380 and 811-21864), as filed with the SEC on March 31, 2014. |
(h)(3) | Schedule A, as of January 25, 2023, to the Administration Agreement and Transfer Agency and Service Agreement is incorporated herein by reference to Exhibit (h)(3) to Post-Effective Amendment No. 889 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-132380 and 811-21864), as filed with the SEC on January 25, 2023. |
(h)(4) | Schedule A to the Administration Agreement and Transfer Agency and Service Agreement, reflecting the addition of the WisdomTree Bianco Fixed Income Total Return Fund, to be filed by amendment. |
(h)(5) | License Agreement dated March 21, 2006 between the Registrant and WisdomTree, Inc. (the “License Agreement”) is incorporated herein by reference to Exhibit (h)(3) to Post-Effective Amendment No. 2 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-132380 and 811-21864), as filed with the SEC on September 29, 2006. |
(h)(6) | Exhibit A, effective as of December 9, 2022, to the License Agreement is incorporated herein by reference to Exhibit (h)(6) to Post-Effective Amendment No. 886 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-132380 and 811-21864), as filed with the SEC on December 9, 2022. |
(h)(7) | Securities Lending Authorization Agreement dated September 27, 2013 between the Registrant and State Street Bank and Trust Company (the “Securities Lending Agreement”) is incorporated herein by reference to Exhibit (h)(8) to Post-Effective Amendment No. 346 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-132380 and 811-21864), as filed with the SEC on March 31, 2014. |
(h)(8) | Twenty-Fifth Amendment and revised Schedule B, dated December 21, 2021, to the Securities Lending Agreement is incorporated herein by reference to the Registrant’s Post-Effective Amendment No. 793 filing, as filed with the SEC on June 15, 2021. |
(h)(9) | Amendment and revised Schedule B to the Securities Lending Agreement, reflecting the addition of the WisdomTree Efficient Gold Plus Equity Strategy Fund, WisdomTree Emerging Markets Ex-China Fund, WisdomTree U.S. Quality Growth Fund, and WisdomTree Bianco Fixed Income Total Return Fund, to be filed by amendment. |
(h)(10) | Chief Compliance Officer Services Agreement dated October 1, 2009 between the Registrant and WisdomTree Asset Management, Inc. (the “CCO Services Agreement”) is incorporated herein by reference to Exhibit (h)(10) to Post-Effective Amendment No. 27 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-132380 and 811-21864), as filed with the SEC on October 15, 2009. |
(h)(11) | Revised Exhibit C, amended as of January 25, 2023, to the CCO Services Agreement is incorporated herein by reference to Exhibit (h)(10) to Post-Effective Amendment No. 889 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-132380 and 811-21864), as filed with the SEC on January 25, 2023. |
(h)(12) | Revised Exhibit C to the CCO Services Agreement, reflecting the addition of the WisdomTree Bianco Fixed Income Total Return Fund, to be filed by amendment. |
(h)(13) | Fund Services Agreement dated June 15, 2009 between the Registrant and WisdomTree Asset Management, Inc. (the “Fund Services Agreement”) is incorporated herein by reference to Exhibit (h)(11) to Post-Effective Amendment No. 131 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-132380 and 811-21864), as filed with the SEC on September 10, 2012. |
(h)(14) | Exhibit A, as of January 25, 2023, to the Fund Services Agreement is incorporated herein by reference to Exhibit (h)(12) to Post-Effective Amendment No. 889 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-132380 and 811-21864), as filed with the SEC on January 25, 2023. |
(h)(15) | Revised Exhibit A to the Fund Services Agreement, reflecting the addition of the WisdomTree Bianco Fixed Income Total Return Fund, to be filed by amendment. |
(h)(16) | WisdomTree Index Methodology (U.S. High Yield Corporate Bond Index Family) dated March 2020 is incorporated herein by reference to Exhibit (h)(31) to Post-Effective Amendment No. 738 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-132380 and 811-21864), as filed with the SEC on June 1, 2020. |
(h)(17) | WisdomTree Index Methodology (U.S. Corporate Bond Index Family: U.S. Corporate Bond Index and U.S. Short-term Corporate Bond Index) dated September 2019 is incorporated herein by reference to Exhibit (h)(37) to Post-Effective Amendment No. 721 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-132380 and 811-21864), as filed with the SEC on October 28, 2019. |
(h)(18) | WisdomTree Rules-Based Methodology (U.S. Dividend Indexes, Core Equity Indexes, U.S. Multifactor Index, International Dividend Indexes, Emerging Markets Dividend Indexes, Ex-State-Owned Enterprises Indexes, India Index, Global Dividend Index, Global Ex-U.S. Quality Index, Growth Leaders Index, Cybersecurity Index, BioRevolution Index, Artificial Intelligence and Innovation Index, Battery Value Chain and Innovation Index, and Quality Growth Index), as last updated February 2023, is incorporated herein by reference to Exhibit (h)(15) to Post-Effective Amendment No. 891 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-132380 and 811-21864), as filed with the SEC on July 31, 2023. |
(h)(19) | WisdomTree Rules-Based Methodology (WisdomTree U.S. Quality Growth Index) dated November 2022 is incorporated herein by reference to Exhibit (h)(21) to Post-Effective Amendment No. 886 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-132380 and 811-21864), as filed with the SEC on December 9, 2022. |
(h)(20) | Form of Fund of Funds Investment Agreement is incorporated herein by reference to Exhibit (h)(21) to Post-Effective Amendment No. 837 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-132380 and 811-21864), as filed with the SEC on December 23, 2021. |
(i)(1) | Opinion of counsel, Morgan, Lewis & Bockius LLP, relating to the WisdomTree U.S. Equity Funds and WisdomTree International Equity Funds, is incorporated by reference to Exhibit (i)(1) to Post-Effective Amendment No. 890 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-132380 and 811-21864), as filed with the SEC on July 31, 2023. |
(i)(2) | Opinion of counsel, Morgan, Lewis & Bockius LLP, relating to the WisdomTree International Equity, Fixed Income, Capital Efficient, Megatrend, and ESG ETFs, is incorporated by reference to Exhibit (i)(5) to Post-Effective Amendment No. 883 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-132380 and 811-21864), as filed with the SEC on October 28, 2022. |
(i)(3) | Opinion of counsel, Morgan, Lewis & Bockius LLP, relating to the WisdomTree Fixed Income Funds, WisdomTree Alternative Funds and WisdomTree Capital Efficient Funds, is incorporated herein by reference to Exhibit (i)(5) to Post-Effective Amendment No. 887 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-132380 and 811-21864), as filed with the SEC on December 23, 2022. |
(i)(4) | Opinion of counsel, Morgan, Lewis & Bockius LLP, relating to the WisdomTree Voya Yield Enhanced USD Universal Bond Fund, is incorporated herein by reference to Exhibit (i)(6) to Post-Effective Amendment No. 889 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-132380 and 811-21864), as filed with the SEC on January 25, 2023. |
(i)(5) | Opinion of counsel, Morgan, Lewis & Bockius LLP, relating to the WisdomTree Bianco Fixed Income Total Return Fund, to be filed by amendment. |
(j) | Not applicable. |
(k) | Not applicable. |
(l) | Form of Letter of Representations between the Registrant and The Depository Trust Company is incorporated herein by reference to Exhibit (l) to Pre-Effective Amendment No. 2 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-132380 and 811-21864), as filed with the SEC on June 9, 2006. |
(m) | Not applicable. |
(n) | Not applicable. |
(o) | Not applicable. |
(p)(1)
|
Code of Ethics of the Registrant dated September 15, 2009 is incorporated herein by reference to Exhibit (p)(1) to Post-Effective Amendment No. 27 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-132380 and 811-21864), as filed with the SEC on October 15, 2009. |
(p)(2) | Code of Ethics of WisdomTree Asset Management, Inc. dated November 12, 2021 is incorporated herein by reference to Exhibit (p)(2) to Post-Effective Amendment No. 836 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-132380 and 811-21864), as filed with the SEC on December 13, 2021. |
(p)(3)
|
Code of Ethics of Mellon Investments Corporation is incorporated herein by reference to Exhibit (p)(3) to Post-Effective Amendment No. 634 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-132380 and 811-21864), as filed with the SEC on July 27, 2018. |
(p)(4) | Code of Ethics of Voya Investment Management Co., LLC dated January 1, 2015 is incorporated herein by reference to Exhibit (p)(5) to Post-Effective Amendment No. 541 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-132380 and 811-21864), as filed with the SEC on April 14, 2016. |
(p)(5) | Code of Ethics of Newton Investment Management North America, LLC is incorporated herein by reference to Exhibit (p)(5) to Post-Effective Amendment No. 808 to the Registrant’s Registration Statement on Form N-1A (File Nos. 333-132380 and 811-21864), as filed with the SEC on September 10, 2021. |
(p)(6) | Code of Ethics of [Sub-Adviser], sub-adviser to the WisdomTree Bianco Fixed Income Total Return Fund, to be filed by amendment. |
(q)(1) | Power of Attorney dated September 18, 2023 for David Castano, David Chrencik, Joel Goldberg, Melinda Raso Kirstein, Toni Massaro, Jonathan Steinberg and Victor Ugolyn is filed herewith. |
(q)(2) | Secretary’s Certificate related to certain signatory authority dated September 18, 2023 is filed herewith. |
Item 29. | Persons Controlled by or Under Common Control with the Registrant |
As of the date of this Registration Statement,
the WisdomTree Managed Futures Strategy Fund, WisdomTree India Earnings Fund, WisdomTree Enhanced Commodity Strategy Fund, WisdomTree
Efficient Gold Plus Gold Miners Strategy Fund, and WisdomTree Efficient Gold Plus Equity Strategy Fund (each, a “Parent Fund”)
owns 100% of the WisdomTree Managed Futures Strategy Portfolio I, WisdomTree India Investment Portfolio, Inc., WisdomTree Enhanced Commodity
Strategy Portfolio I, WisdomTree Efficient Plus Gold Miners Strategy Portfolio I, and WisdomTree Efficient Gold Plus Equity Strategy Portfolio
I (each, a “Subsidiary”), respectively. Each Subsidiary, with the exception of the WisdomTree India Investment Portfolio,
Inc., is an exempted company organized under Cayman Islands law. The WisdomTree India Investment Portfolio, Inc. is an exempted company
organized under the laws of the Republic of Mauritius. Each Subsidiary’s financial information is reported on a consolidated basis
with that of its Parent Fund.
Item 30. Indemnification
Reference is made to Article IX of the Registrant’s
Trust Instrument included as Exhibit (a)(2) to this Registration Statement with respect to the indemnification of the Registrant’s
trustees and officers, which is set forth below:
Section 1. Limitation of Liability.
All Persons contracting with or having
any claim against the Trust or a particular Series shall look only to the assets of the Trust or Assets belonging to such Series, respectively,
for payment under such contract or claim; and neither the Trustees nor any of the Trust’s officers, employees, or agents, whether
past, present, or future, shall be personally liable therefor. Every written instrument or obligation on behalf of the Trust or any Series
shall contain a statement to the foregoing effect, but the absence of such statement shall not operate to make any Trustee or officer
of the Trust liable thereunder. Provided they have exercised reasonable care and have acted under the reasonable belief that their actions
are in the best interest of the Trust, the Trustees and officers of the Trust shall not be responsible or liable for any act or omission
or for neglect or wrongdoing of them or any officer, agent, employee, Investment Adviser, or independent contractor of the Trust, but
nothing contained in this Trust Instrument or in the Delaware Act shall protect any Trustee or officer of the Trust against liability
to the Trust or to Shareholders to which he would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence,
or reckless disregard of the duties involved in the conduct of his office.
Section 2. Indemnification.
(a) Subject to the exceptions and
limitations contained in subsection (b) below:
(i) every Person who is, or has been,
a Trustee or an officer, employee, or agent of the Trust (“Covered Person”) shall be indemnified by the Trust or the appropriate
Series (out of Assets belonging to that Series) to the fullest extent permitted by law against liability and against all expenses reasonably
incurred or paid by him in connection with any claim, action, suit, or proceeding in which he becomes involved as a party or otherwise
by virtue of his being or having been a Covered Person and against amounts paid or incurred by him in the settlement thereof; provided
that the transfer agent of the Trust or any Series shall not be considered an agent for these purposes unless expressly deemed to be such
by the Trustees in a resolution referring to this Article.
(ii) as used herein, the words “claim,”
“action,” “suit,” or “proceeding” shall apply to all claims, actions, suits, or proceedings (civil,
criminal, or other, including appeals), actual or threatened, and the words “liability” and “expenses” shall include
attorney’s fees, costs, judgments, amounts paid in settlement, fines, penalties, and other liabilities.
(b) No indemnification shall be provided
hereunder to a Covered Person:
(i) who has been adjudicated by a
court or body before which the proceeding was brought:
(A) to be liable to the Trust or its
Shareholders by reason of willful misfeasance, bad faith, gross negligence, or reckless disregard of the duties involved in the conduct
of his office or
(B) not to have acted in good faith
in the reasonable belief that his action was in the best interest of the Trust; or
(ii) in the event of a settlement,
unless there has been a determination that such Covered Person did not engage in willful misfeasance, bad faith, gross negligence, or
reckless disregard of the duties involved in the conduct of his office (A) by the court or other body approving the settlement, (B) by
at least a majority of those Trustees who are neither Interested Persons of the Trust nor are parties to the matter based on a review
of readily available facts (as opposed to a full trial-type inquiry), or (C) by written opinion of independent legal counsel based
on a review of readily available facts (as opposed to a full trial-type inquiry).
(c) The rights of indemnification
herein provided may be insured against by policies maintained by the Trust, shall be severable, shall not be exclusive of or affect any
other rights to which any Covered Person may now or hereafter be entitled, and shall inure to the benefit of the heirs, executors, and
administrators of a Covered Person.
(d) To the maximum extent permitted
by applicable law, expenses in connection with the preparation and presentation of a defense to any claim, action, suit, or proceeding
of the character described in subsection (a) of this Section shall be paid by the Trust or applicable Series from time to time prior
to final disposition thereof on receipt of an undertaking by or on behalf of such Covered Person that such amount will be paid over by
him to the Trust or applicable Series if it is ultimately determined that he is not entitled to indemnification under this Section, provided
that either (i) such Covered Person has provided appropriate security for such undertaking, (ii) the Trust is insured against
losses arising out of any such advance payments, or (iii) either a majority of the Trustees who are neither Interested Persons of
the Trust nor parties to the matter, or independent legal counsel in a written opinion, has determined, based on a review of readily available
facts (as opposed to a full trial-type inquiry) that there is reason to believe that such Covered Person will not be disqualified from
indemnification under this Section.
(e) Any repeal or modification of
this Article IX by the Shareholders, or adoption or modification of any other provision of this Trust Instrument or the By-laws inconsistent
with this Article, shall be prospective only, to the extent that such repeal, modification, or adoption would, if applied retrospectively,
adversely affect any limitation on the liability of any Covered Person or indemnification available to any Covered Person with respect
to any act or omission that occurred prior to such repeal, modification, or adoption.
Reference is made to Article VI of
the Registrant’s By-Laws included as Exhibit (b) to this Registration Statement with respect to the indemnification of the
Registrant’s trustees and officers, which is set forth below:
Section 6.2. Limitation of Liability.
The Declaration refers to the Trustees
as Trustees, but not as individuals or personally; and no Trustee, officer, employee or agent of the Trust shall be held to any personal
liability, nor shall resort be had to their private property for the satisfaction of any obligation or claim or otherwise in connection
with the affairs of the Trust; provided, that nothing contained in the Declaration or the By-Laws shall protect any Trustee or officer
of the Trust from any liability to the Trust or its Shareholders to which he would otherwise be subject by reason of willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his office.
Insofar as indemnification for liabilities
arising under the Securities Act of 1933, as amended, may be provided to trustees, officers and controlling persons of the Trust, pursuant
to the foregoing provisions or otherwise, the Trust has been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act of 1933, as amended, and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than the payment by the Trust of expenses incurred or paid
by a trustee, officer or controlling person of the Trust in connection with the successful defense of any action, suit or proceeding or
payment pursuant to any insurance policy) is asserted against the Trust by such trustee, officer or controlling person in connection with
the securities being registered, the Trust will, unless in the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such issue.
Item 31. | Business and Other Connections of the Investment Adviser |
WisdomTree Asset Management, Inc. (“WTAM”),
250 West 34th Street, 3rd Floor, New York, New York 10119, a wholly-owned subsidiary of WisdomTree, Inc. (formerly, WisdomTree Investments,
Inc.), is a registered investment adviser and serves as investment adviser for each series of the Trust. The description of WTAM under
the caption of “Management-Investment Adviser” in the Prospectus and under the caption “Management of the Trust”
in the Statement of Additional Information constituting Parts A and B, respectively, of this Registration Statement are incorporated herein
by reference.
Each of the directors and officers of WTAM also
will generally have substantial responsibilities (as noted below) as directors and/or officers of WisdomTree, Inc., 250 West 34th
Street, 3rd Floor, New York, New York 10119. To the knowledge of the Registrant, except as set forth below or otherwise disclosed
in the Prospectus or Statement of Additional Information as noted above, none of the directors or executive officers of WTAM is or has
been at any time during the past two fiscal years engaged in any other business, profession, vocation or employment of a substantial nature.
Name |
Position with WTAM |
Principal Business(es) During Last Two Fiscal Years |
||
Jonathan Steinberg | Chief Executive Officer and Director | Dual officer/director of WisdomTree, Inc. | ||
Peter M. Ziemba | Senior Advisor to the Chief Executive Officer, Chief Administrative Officer, and Director | Dual officer of WisdomTree, Inc. | ||
Bryan Edmiston | Chief Financial Officer and Treasurer | Dual officer of WisdomTree, Inc. | ||
Marci Frankenthaler | Chief Legal Officer and Secretary | Dual officer of WisdomTree, Inc. | ||
Stuart Bell | Chief Operating Officer and Director | None | ||
R. Jarrett Lilien | President | President and Chief Operating Officer of WisdomTree, Inc. | ||
Jeremy Schwartz | Chief Investment Officer | None | ||
William Peck | Head of Digital Assets | Dual officer of WisdomTree, Inc. | ||
Terry Feld | Head of Compliance and Chief Compliance Officer | None | ||
Joanne Antico | General Counsel | None |
WTAM, with the approval of the Trust’s Board
of Trustees, selects the sub-adviser for each of the Trust’s series, as applicable. Voya Investment Management Co., LLC serves as
sub-adviser for the WisdomTree U.S. Corporate Bond Fund, WisdomTree U.S. Short-Term Corporate Bond Fund, WisdomTree U.S. High Yield Corporate
Bond Fund, WisdomTree Yield Enhanced U.S. Short-Term Aggregate Bond Fund, WisdomTree Emerging Markets Corporate Bond Fund, WisdomTree
Mortgage Plus Bond Fund, WisdomTree Interest Rate Hedged High Yield Bond Fund, WisdomTree U.S. AI Enhanced Value Fund, WisdomTree International
AI Enhanced Value Fund, and WisdomTree Voya Yield Enhanced USD Universal Bond Fund. Newton Investment Management North America, LLC serves
as sub-adviser for the WisdomTree Managed Futures Strategy Fund, WisdomTree PutWrite Strategy Fund, WisdomTree Target Range Fund, and
WisdomTree Enhanced Commodity Strategy Fund. Mellon Investments Corporation serves as sub-adviser for each other series of the Trust.
To the knowledge of the Registrant, except as set forth below, none of the directors or executive officers of the sub-advisers is or has
been at any time during the past two fiscal years engaged in any other business, profession, vocation or employment of a substantial nature.
Mellon Investments Corporation
Name |
Position Held with Mellon Investments Corporation |
Principal Business(es) During the Last Two Fiscal Years |
||
Stephanie Pierce | Chief Executive Officer | Dual Officer of The Bank of New York Mellon | ||
Lori Najjar | Chief Compliance Officer | Dual Officer of The Bank of New York Mellon | ||
Giuliette Drake | Chief Financial Officer | The Bank of New York Mellon | ||
Erica Fotta | Chief Operations Officer | Dual Officer of The Bank of New York Mellon | ||
Hanneke Smits | Director | The Bank of New York Mellon; Newton | ||
Christina Sujin King | Director | The Bank of New York Mellon |
Newton Investment Management North America,
LLC
Name | Position Held with Newton Investment Management North America, LLC |
Principal Business(es) During the Last Two Fiscal Years |
||
Michael Anthony Germano | Chief Executive Officer | Dual Officer of The Bank of New York Mellon | ||
Jaime Utano | Chief Compliance Officer | Dual Officer of The Bank of New York Mellon | ||
Parker Webb Wertz | Chief Financial Officer | Dual Officer of The Bank of New York Mellon |
Voya Investment Management Co., LLC
Name |
Position Held with Voya Investment Management Co., LLC |
Principal Business(es) During the Last Two Fiscal Years* |
||
Huey Paul Falgout | Managing Director — Head of IM Legal | Managing Director — Head of IM Legal | ||
Michael Peters | Chief Operating Officer & Senior Managing Director, | Head of Investment Business Management at AllianzGI | ||
Jacob John Tuzza | Head of Distribution and Senior Managing Director | Head of Distribution and Senior Managing Director | ||
Vincent Joseph Costa | Co-Chief Investment Officer of Equities & Senior Managing Director | Co-Chief Investment Officer of Equities & Senior Managing Director | ||
Christine Lynn Hurtsellers | Director, Chairwoman and Chief Executive Officer | Chief Investment Officer of Fixed Income & Proprietary Investments and Senior Managing Director of VIM; Chief Investment Officer of Fixed Income & Proprietary Investments and Senior Managing Director of VAAM. | ||
Michael Bruce Pytosh | Chief Investment Officer of Equities and Senior Managing Director |
Chief |
||
Paul Zemsky | Senior Managing Director | Senior Managing Director of VIM and VAAM. | ||
Micheline Faver | Chief Compliance Officer, Senior Vice President | Senior Vice President and Chief Compliance Officer of VIM and VAAM. | ||
Amir Sahibzada | Chief Risk Officer and Managing Director | Chief Risk Officer of VIM and VAAM. | ||
Markus Wolff | Chief Financial Officer and Managing Director | Managing Director, Head of U.S. Business Management & Distribution Strategy at AllianzGI | ||
Matthew Toms | Chief Investment Officer of Fixed Income & Proprietary Investments and Senior Managing Director | Managing Director and Head of U.S. Public Investments |
* | Voya Investment Management LLC (“VIM”), Voya Alternative Asset Management LLC (“VAAM”). |
[Sub-Adviser
(sub-adviser to the WisdomTree Bianco Fixed Income Total Return Fund)]
[Information
in table below to be provided by amendment]
Name | Position Held with [Sub-Adviser] |
Principal Business(es) During the Last Two Fiscal Years* |
||
[ __ ] | [ __ ] | [ __ ] |
Item 32. | Principal Underwriters |
Item 32(a) | Foreside Fund Services, LLC (the “Distributor”) serves as principal underwriter for the following investment companies registered under the Investment Company Act of 1940, as amended: |
1. | AB Active ETFs, Inc. | |
2. | ABS Long/Short Strategies Fund | |
3. | Absolute Shares Trust | |
4. | ActivePassive Core Bond ETF, Series of Trust for Professional Managers | |
5. | ActivePassive Intermediate Municipal Bond ETF, Series of Trust for Professional Managers | |
6. | ActivePassive International Equity ETF, Series of Trust for Professional Managers | |
7. | ActivePassive U.S. Equity ETF, Series of Trust for Professional Managers | |
8. | Adaptive Core ETF, Series of Collaborative Investment Series Trust | |
9. | AdvisorShares Trust | |
10. | AFA Multi-Manager Credit Fund | |
11. | AGF Investments Trust | |
12. | AIM ETF Products Trust | |
13. | Alexis Practical Tactical ETF, Series of Listed Funds Trust | |
14. | AlphaCentric Prime Meridian Income Fund | |
15. | American Century ETF Trust | |
16. | Amplify ETF Trust | |
17. | Applied Finance Core Fund, Series of World Funds Trust | |
18. | Applied Finance Explorer Fund, Series of World Funds Trust | |
19. | Applied Finance Select Fund, Series of World Funds Trust | |
20. | ARK ETF Trust | |
21. | ARK Venture Fund | |
22. | ASYMmetric ETFs Trust | |
23. | B.A.D. ETF, Series of Listed Funds Trust | |
24. | Bitwise Funds Trust | |
25. | Bluestone Community Development Fund | |
26. | BondBloxx ETF Trust | |
27. | Bramshill Multi-Strategy Income Fund, Series of Investment Managers Series Trust | |
28. | Bridgeway Funds, Inc. | |
29. | Brinker Capital Destinations Trust | |
30. | Brookfield Real Assets Income Fund Inc. | |
31. | Build Funds Trust | |
32. | Calamos Convertible and High Income Fund | |
33. | Calamos Convertible Opportunities and Income Fund | |
34. | Calamos Dynamic Convertible and Income Fund | |
35. | Calamos ETF Trust | |
36. | Calamos Global Dynamic Income Fund | |
37. | Calamos Global Total Return Fund | |
38. | Calamos Strategic Total Return Fund |
39. | Carlyle Tactical Private Credit Fund | |
40. | Cboe Vest Bitcoin Strategy Managed Volatility Fund, Series of World Funds Trust | |
41. | Cboe Vest S&P 500® Dividend Aristocrats Target Income Fund, Series of World Funds Trust | |
42. | Cboe Vest US Large Cap 10% Buffer Strategies Fund, Series of World Funds Trust | |
43. | Cboe Vest US Large Cap 10% Buffer VI Fund, Series of World Funds Trust | |
44. | Cboe Vest US Large Cap 20% Buffer Strategies Fund, Series of World Funds Trust | |
45. | Cboe Vest US Large Cap 20% Buffer VI Fund, Series of World Funds Trust | |
46. | Center Coast Brookfield MLP & Energy Infrastructure Fund | |
47. | Clifford Capital Focused Small Cap Value Fund, Series of World Funds Trust | |
48. | Clifford Capital International Value Fund, Series of World Funds Trust | |
49. | Clifford Capital Partners Fund, Series of World Funds Trust | |
50. | Cliffwater Corporate Lending Fund | |
51. | Cliffwater Enhanced Lending Fund | |
52. | Cohen & Steers Infrastructure Fund, Inc. | |
53. | Convergence Long/Short Equity ETF, Series of Trust for Professional Managers | |
54. | CornerCap Small-Cap Value Fund, Series of Managed Portfolio Series | |
55. | CrossingBridge Pre-Merger SPAC ETF, Series of Trust for Professional Managers | |
56. | Curasset Capital Management Core Bond Fund, Series of World Funds Trust | |
57. | Curasset Capital Management Limited Term Income Fund, Series of World Funds Trust | |
58. | Davis Fundamental ETF Trust | |
59. | Defiance Daily Short Digitizing the Economy ETF, Series of ETF Series Solutions | |
60. | Defiance Hotel, Airline, and Cruise ETF, Series of ETF Series Solutions | |
61. | Defiance Next Gen Connectivity ETF, Series of ETF Series Solutions | |
62. | Defiance Next Gen H2 ETF, Series of ETF Series Solutions | |
63. | Defiance Pure Electric Vehicle ETF, Series of ETF Series Solutions | |
64. | Defiance Quantum ETF, Series of ETF Series Solutions | |
65. | Direxion Funds | |
66. | Direxion Shares ETF Trust | |
67. | Dividend Performers ETF, Series of Listed Funds Trust | |
68. | Dodge & Cox Funds | |
69. | DoubleLine ETF Trust | |
70. | DoubleLine Opportunistic Credit Fund | |
71. | DoubleLine Yield Opportunities Fund | |
72. | DriveWealth ETF Trust | |
73. | EIP Investment Trust | |
74. | Ellington Income Opportunities Fund | |
75. | ETF Opportunities Trust | |
76. | Evanston Alternative Opportunities Fund | |
77. | Exchange Listed Funds Trust | |
78. | Fiera Capital Series Trust | |
79. | FlexShares Trust | |
80. | Forum Funds | |
81. | Forum Funds II | |
82. | Forum Real Estate Income Fund | |
83. | Goose Hollow Tactical Allocation ETF, Series of Collaborative Investment Series Trust | |
84. | Grayscale Future of Finance ETF, Series of ETF Series Solutions | |
85. | Grizzle Growth ETF, Series of Listed Funds Trust | |
86. | Guinness Atkinson Funds | |
87. | Harbor ETF Trust | |
88. | Horizon Kinetics Blockchain Development ETF, Series of Listed Funds Trust | |
89. | Horizon Kinetics Energy and Remediation ETF, Series of Listed Funds Trust | |
90. | Horizon Kinetics Inflation Beneficiaries ETF, Series of Listed Funds Trust | |
91. | Horizon Kinetics Medical ETF, Series of Listed Funds Trust | |
92. | Horizon Kinetics SPAC Active ETF, Series of Listed Funds Trust |
93. | IDX Funds | |
94. | Innovator ETFs Trust | |
95. | Ironwood Institutional Multi-Strategy Fund LLC | |
96. | Ironwood Multi-Strategy Fund LLC | |
97. | John Hancock Exchange-Traded Fund Trust | |
98. | LDR Real Estate Value-Opportunity Fund, Series of World Funds Trust | |
99. | Mairs & Power Balanced Fund, Series of Trust for Professional Managers | |
100. | Mairs & Power Growth Fund, Series of Trust for Professional Managers | |
101. | Mairs & Power Minnesota Municipal Bond ETF, Series of Trust for Professional Managers | |
102. | Mairs & Power Small Cap Fund, Series of Trust for Professional Managers | |
103. | Manor Investment Funds | |
104. | Merk Stagflation ETF, Series of Listed Funds Trust | |
105. | Milliman Variable Insurance Trust | |
106. | Mindful Conservative ETF, Series of Collaborative Investment Series Trust | |
107. | Moerus Worldwide Value Fund, Series of Northern Lights Fund Trust IV | |
108. | Mohr Growth ETF, Series of Collaborative Investment Series Trust | |
109. | Mohr Sector Navigator ETF, Series of Collaborative Investment Series Trust | |
110. | Morgan Stanley ETF Trust | |
111. | Morningstar Funds Trust | |
112. | Mutual of America Investment Corporation | |
113. | OTG Latin American Fund, Series of World Funds Trust | |
114. | Overlay Shares Core Bond ETF, Series of Listed Funds Trust | |
115. | Overlay Shares Foreign Equity ETF, Series of Listed Funds Trust | |
116. | Overlay Shares Hedged Large Cap Equity ETF, Series of Listed Funds Trust | |
117. | Overlay Shares Large Cap Equity ETF, Series of Listed Funds Trust | |
118. | Overlay Shares Municipal Bond ETF, Series of Listed Funds Trust | |
119. | Overlay Shares Short Term Bond ETF, Series of Listed Funds Trust | |
120. | Overlay Shares Small Cap Equity ETF, Series of Listed Funds Trust | |
121. | Palmer Square Opportunistic Income Fund | |
122. | Partners Group Private Income Opportunities, LLC | |
123. | Performance Trust Mutual Funds, Series of Trust for Professional Managers | |
124. | Perkins Discovery Fund, Series of World Funds Trust | |
125. | Philotimo Focused Growth and Income Fund, Series of World Funds Trust | |
126. | Plan Investment Fund, Inc. | |
127. | PMC Core Fixed Income Fund, Series of Trust for Professional Managers | |
128. | PMC Diversified Equity Fund, Series of Trust for Professional Managers | |
129. | Point Bridge America First ETF, Series of ETF Series Solutions | |
130. | Preferred-Plus ETF, Series of Listed Funds Trust | |
131. | Putnam ETF Trust | |
132. | Quaker Investment Trust | |
133. | Rareview Dynamic Fixed Income ETF, Series of Collaborative Investment Series Trust | |
134. | Rareview Inflation/Deflation ETF, Series of Collaborative Investment Series Trust | |
135. | Rareview Systematic Equity ETF, Series of Collaborative Investment Series Trust | |
136. | Rareview Tax Advantaged Income ETF, Series of Collaborative Investment Series Trust | |
137. | Renaissance Capital Greenwich Funds | |
138. | Revere Sector Opportunity ETF, Series of Collaborative Investment Series Trust | |
139. | Reynolds Funds, Inc. | |
140. | RiverNorth Enhanced Pre-Merger SPAC ETF, Series of Listed Funds Trust | |
141. | RiverNorth Patriot ETF, Series of Listed Funds Trust | |
142. | RMB Investors Trust | |
143. | Robinson Opportunistic Income Fund, Series of Investment Managers Series Trust | |
144. | Robinson Tax Advantaged Income Fund, Series of Investment Managers Series Trust | |
145. | Roundhill Ball Metaverse ETF, Series of Listed Funds Trust | |
146. | Roundhill BIG Bank ETF, Series of Listed Funds Trust |
147. | Roundhill BIG Tech ETF, Series of Listed Funds Trust | |
148. | Roundhill Cannabis ETF, Series of Listed Funds Trust | |
149. | Roundhill IO Digital Infrastructure ETF, Series of Listed Funds Trust | |
150. | Roundhill MEME ETF, Series of Listed Funds Trust | |
151. | Roundhill Sports Betting & iGaming ETF, Series of Listed Funds Trust | |
152. | Roundhill Video Games ETF, Series of Listed Funds Trust | |
153. | Rule One Fund, Series of World Funds Trust | |
154. | Securian AM Real Asset Income Fund, Series of Investment Managers Series Trust | |
155. | SHP ETF Trust | |
156. | Six Circles Trust | |
157. | Sound Shore Fund, Inc. | |
158. | Sparrow Funds | |
159. | Spear Alpha ETF, Series of Listed Funds Trust | |
160. | STF Tactical Growth & Income ETF, Series of Listed Funds Trust | |
161. | STF Tactical Growth ETF, Series of Listed Funds Trust | |
162. | Strategic Trust | |
163. | Strategy Shares | |
164. | Swan Hedged Equity US Large Cap ETF, Series of Listed Funds Trust | |
165. | Syntax ETF Trust | |
166. | Tekla World Healthcare Fund | |
167. | Tema ETF Trust | |
168. | Teucrium Agricultural Strategy No K-1 ETF, Series of Listed Funds Trust | |
169. | Teucrium AiLA Long-Short Agriculture Strategy ETF, Series of Listed Funds Trust | |
170. | Teucrium AiLA Long-Short Base Metals Strategy ETF, Series of Listed Funds Trust | |
171. | The Community Development Fund | |
172. | The Finite Solar Finance Fund | |
173. | The Private Shares Fund | |
174. | The SPAC and New Issue ETF, Series of Collaborative Investment Series Trust | |
175. | Third Avenue Trust | |
176. | Third Avenue Variable Series Trust | |
177. | Tidal ETF Trust | |
178. | Tidal Trust II | |
179. | TIFF Investment Program | |
180. | Timothy Plan High Dividend Stock Enhanced ETF, Series of The Timothy Plan | |
181. | Timothy Plan High Dividend Stock ETF, Series of The Timothy Plan | |
182. | Timothy Plan International ETF, Series of The Timothy Plan | |
183. | Timothy Plan Market Neutral ETF, Series of The Timothy Plan | |
184. | Timothy Plan US Large/Mid Cap Core ETF, Series of The Timothy Plan | |
185. | Timothy Plan US Large/Mid Core Enhanced ETF, Series of The Timothy Plan | |
186. | Timothy Plan US Small Cap Core ETF, Series of The Timothy Plan | |
187. | Total Fund Solution | |
188. | Touchstone ETF Trust | |
189. | TrueShares Eagle Global Renewable Energy Income ETF, Series of Listed Funds Trust | |
190. | TrueShares ESG Active Opportunities ETF, Series of Listed Funds Trust | |
191. | TrueShares Low Volatility Equity Income ETF, Series of Listed Funds Trust | |
192. | TrueShares Structured Outcome (April) ETF, Series of Listed Funds Trust | |
193. | TrueShares Structured Outcome (August) ETF, Series of Listed Funds Trust | |
194. | TrueShares Structured Outcome (December) ETF, Series of Listed Funds Trust | |
195. | TrueShares Structured Outcome (February) ETF, Series of Listed Funds Trust | |
196. | TrueShares Structured Outcome (January) ETF, Series of Listed Funds Trust | |
197. | TrueShares Structured Outcome (July) ETF, Series of Listed Funds Trust | |
198. | TrueShares Structured Outcome (June) ETF, Series of Listed Funds Trust | |
199. | TrueShares Structured Outcome (March) ETF, Series of Listed Funds Trust | |
200. | TrueShares Structured Outcome (May) ETF, Listed Funds Trust |
201. | TrueShares Structured Outcome (November) ETF, Series of Listed Funds Trust | |
202. | TrueShares Structured Outcome (October) ETF, Series of Listed Funds Trust | |
203. | TrueShares Structured Outcome (September) ETF, Series of Listed Funds Trust | |
204. | TrueShares Technology, AI & Deep Learning ETF, Series of Listed Funds Trust | |
205. | U.S. Global Investors Funds | |
206. | Union Street Partners Value Fund, Series of World Funds Trust | |
207. | Variant Alternative Income Fund | |
208. | Variant Impact Fund | |
209. | VictoryShares Core Intermediate Bond ETF, Series of Victory Portfolios II | |
210. | VictoryShares Core Plus Intermediate Bond ETF, Series of Victory Portfolios II | |
211. | VictoryShares Corporate Bond ETF, Series of Victory Portfolios II | |
212. | VictoryShares Developed Enhanced Volatility Wtd ETF, Series of Victory Portfolios II | |
213. | VictoryShares Dividend Accelerator ETF, Series of Victory Portfolios II | |
214. | VictoryShares Emerging Markets Value Momentum ETF, Series of Victory Portfolios II | |
215. | VictoryShares Free Cash Flow ETF, Series of Victory Portfolios II | |
216. | VictoryShares International High Div Volatility Wtd ETF, Series of Victory Portfolios II | |
217. | VictoryShares International Value Momentum ETF, Series of Victory Portfolios II | |
218. | VictoryShares International Volatility Wtd ETF, Series of Victory Portfolios II | |
219. | VictoryShares NASDAQ Next 50 ETF, Series of Victory Portfolios II | |
220. | VictoryShares Short-Term Bond ETF, Series of Victory Portfolios II | |
221. | VictoryShares THB Mid Cap ESG ETF, Series of Victory Portfolios II | |
222. | VictoryShares US 500 Enhanced Volatility Wtd ETF, Series of Victory Portfolios II | |
223. | VictoryShares US 500 Volatility Wtd ETF, Series of Victory Portfolios II | |
224. | VictoryShares US Discovery Enhanced Volatility Wtd ETF, Series of Victory Portfolios II | |
225. | VictoryShares US EQ Income Enhanced Volatility Wtd ETF, Series of Victory Portfolios II | |
226. | VictoryShares US Large Cap High Div Volatility Wtd ETF, Series of Victory Portfolios II | |
227. | VictoryShares US Multi-Factor Minimum Volatility ETF, Series of Victory Portfolios II | |
228. | VictoryShares US Small Cap High Div Volatility Wtd ETF, Series of Victory Portfolios II | |
229. | VictoryShares US Small Cap Volatility Wtd ETF, Series of Victory Portfolios II | |
230. | VictoryShares US Small Mid Cap Value Momentum ETF, Series of Victory Portfolios II | |
231. | VictoryShares US Value Momentum ETF, Series of Victory Portfolios II | |
232. | VictoryShares WestEnd US Sector ETF, Series of Victory Portfolios II | |
233. | Volatility Shares Trust | |
234. | West Loop Realty Fund, Series of Investment Managers Series Trust | |
235. | Wilshire Mutual Funds, Inc. | |
236. | Wilshire Variable Insurance Trust | |
237. | WisdomTree Digital Trust | |
238. | WisdomTree Trust | |
239. | WST Investment Trust | |
240. | XAI Octagon Floating Rate & Alternative Income Term Trust |
Item 32(b) | The following are the Officers and Manager of the Distributor, the Registrant’s underwriter. The Distributor’s main business address is Three Canal Plaza, Suite 100, Portland, Maine 04101. |
Name | Address | Position with Underwriter | Position with Registrant |
Teresa Cowan | 111 E. Kilbourn Ave, Suite 2200, Milwaukee, WI 53202 | President/Manager | None |
Chris Lanza | Three Canal Plaza, Suite 100, Portland, ME 04101 | Vice President | None |
Kate Macchia
|
Three Canal Plaza, Suite 100, Portland, ME 04101 | Vice President | None |
Nanette K. Chern | Three Canal Plaza, Suite 100, Portland, ME 04101 | Vice President and Chief Compliance Officer | None |
Kelly B. Whetstone | Three Canal Plaza, Suite 100, Portland, ME 04101 | Secretary | None |
Susan L. LaFond | 111 E. Kilbourn Ave, Suite 2200, Milwaukee, WI 53202 | Treasurer | None |
Weston Sommers | Three Canal Plaza, Suite 100, Portland, ME 04101 | Financial and Operations Principal and Chief Financial Officer | None |
Item 32(c) | Not applicable. |
Item 33. | Location of Accounts and Records |
(a) | The Registrant maintains accounts, books and other documents required by Section 31(a) of the Investment Company Act of 1940 and the rules thereunder (collectively, “Records”) at its offices at 250 West 34th Street, 3rd Floor, New York, New York 10119. |
(b) | WTAM maintains all Records relating to its services as investment adviser to the Registrant at 250 West 34th Street, 3rd Floor, New York, New York 10119. |
(c) | Mellon Investments Corporation maintains all Records relating to its services as sub-adviser at 50 Fremont Street, Suite 3900, San Francisco, California 94105. |
(d) | Newton Investment Management North America, LLC maintains all Records relating to its services as sub-adviser at 201 Washington Place, Boston, Massachusetts 02108. |
(e) | Voya Investment Management Co., LLC maintains all Records relating to its services as sub-adviser at 230 Park Avenue New York, New York 10169. |
(f) | [Sub-Adviser] maintains all Records relating to its services as sub-adviser at [_________]. |
(g) | Foreside Fund Services, LLC maintains all Records relating to its services as Distributor of the Registrant at Three Canal Plaza, Suite 100, Portland, Maine 04101. |
(h) | State Street Bank and Trust Company maintains all Records relating to its services as administrator, transfer agent and custodian of the Registrant at 1200 Crown Colony Drive, Quincy, Massachusetts 02189. |
Item 34. | Management Services |
Not applicable.
Not applicable.
SIGNATURES
Pursuant to the requirements of the Securities
Act of 1933 and the Investment Company Act of 1940, the Registrant has duly caused this Post-Effective Amendment No. 896 to Registration
Statement No. 333-132380 to be signed on its behalf by the undersigned, duly authorized, in the City of New York, State of New York, on
the 3rd day of November 2023.
WISDOMTREE TRUST (Registrant) |
|||
By: | /s/ Jonathan Steinberg | ||
Jonathan Steinberg | |||
President (Principal Executive Officer) |
Pursuant to the requirements of the
Securities Act of 1933, this Post-Effective Amendment No. 896 to the Registration Statement has been signed below by the following persons
in the capacity and on the dates indicated.
Signatures | Title | Date | ||
/s/ Jonathan Steinberg | President (Principal Executive Officer) and Trustee | November 3, 2023 | ||
Jonathan Steinberg | ||||
/s/ David Castano* | Treasurer (Principal Financial and Accounting Officer) | November 3, 2023 | ||
David Castano | ||||
/s/ David Chrencik* | Trustee | November 3, 2023 | ||
David Chrencik | ||||
/s/ Joel Goldberg* | Trustee | November 3, 2023 | ||
Joel Goldberg | ||||
/s/ Toni Massaro* | Trustee | November 3, 2023 | ||
Toni Massaro | ||||
/s/ Melinda Raso Kirstein* | Trustee | November 3, 2023 | ||
Melinda Raso Kirstein | ||||
/s/ Victor Ugolyn* | Trustee | November 3, 2023 | ||
Victor Ugolyn |
*By: | /s/ Joanne Antico | ||
Joanne Antico | |||
(Attorney-in-Fact) |
Exhibit Index
18
ATTACHMENTS / EXHIBITS
EXHIBIT 99.(Q)(1)
EXHIBIT 99.(Q)(2)