HYIN Profile
The WisdomTree Alternative Income Fund seeks to provide investors with exposure to a diverse range of income-generating investments by investing in component securities of its underlying index. Under normal market conditions, the fund commits at least 80% of its total assets to these component securities and other investments with similar economic characteristics. This strategy ensures that the majority of the fund's assets are directly aligned with its index's performance.
The index tracked by the fund consists primarily of registered closed-end investment companies and real estate investment trusts (REITs) that are publicly traded on major U.S. stock exchanges. Closed-end funds are investment funds that issue a fixed number of shares through an initial public offering (IPO) and then trade on secondary markets. REITs, on the other hand, are companies that own or finance income-producing real estate across various property sectors. By focusing on these asset classes, the fund aims to capture income opportunities from different sources within the alternative investment space.
Closed-end funds and REITs included in the index are known for their potential to provide higher yields compared to traditional equities and fixed-income securities. The WisdomTree Alternative Income Fund leverages this characteristic to offer investors enhanced income potential. Closed-end funds often invest in a wide range of asset classes, including bonds and equities, while REITs provide exposure to real estate income streams, further diversifying the fund's income sources.
As a non-diversified fund, it concentrates its investments in a specific sector namely closed-end funds and REITs rather than spreading assets across a broader array of asset classes. This focused approach allows the WisdomTree Alternative Income Fund to target specific opportunities in alternative income markets but also introduces concentration risk. Investors seeking higher income potential and willing to acsept the associated risks may find this fund's strategy appealing for their investment portfolios.
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