ETFdb Logo
ETFdb Logo
  • ETF Database
  • Channels
    • Active ETF
    • Beyond Basic Beta
    • China Insights
    • Climate Insights
    • Commodities
    • Core Strategies
    • Crypto
    • Direct Indexing
    • Disruptive Technology
    • Energy Infrastructure
    • ETF Building Blocks
    • ETF Education
    • ETF Strategist
    • Financial Literacy
    • Fixed Income
    • Gold/Silver/Critical Minerals
    • Innovative ETFs
    • Institutional Income Strategies
    • Leveraged & Inverse
    • Managed Futures
    • Market Insights
    • Modern Alpha
    • Night Effect
    • Portfolio Strategies
    • Responsible Investing
    • Retirement Income
    • Richard Bernstein Advisors
    • Tax Efficient Income
    • Volatility Resource
  • Tools
    • ETF Screener
    • ETF Country Exposure Tool
    • ETF Sector Tracker Tool
    • ETF Database Categories
    • Head-To-Head ETF Comparison Tool
    • ETF Stock Exposure Tool
    • ETF Issuer Fund Flows
    • Indexes
    • Mutual Fund To ETF Converter
  • Research
    • ETF Education
    • Equity Investing
    • Dividend ETFs
    • Leveraged ETFs
    • Inverse ETFs
    • Index Education
    • Index Insights
    • Top ETF Sectors
    • Top ETF Issuers
    • Top ETF Industries
  • Webcasts
  • Themes
    • AI ETFs
    • Blockchain ETFs
    • See all Thematic Investing ETF themes
    • ESG Investing
    • Marijuana ETFs
  • Multimedia
    • ETF 360 Video Series
    • ETF of the Week Podcast
    • ETF Prime Podcast
    • Video
  • Company
    • About VettaFi
    • Get VettaFi’ed
  • PRO
    • Pro Content
    • Pro Tools
    • Advanced
    • FAQ
    • Pricing
    • Free Sign Up
    • Login
  1. Modern Alpha Channel – ETF Database
  2. NTSX: Heading to Where the Efficiencies Are
Modern Alpha Channel - ETF Database
Share

NTSX: Heading to Where the Efficiencies Are

Tom LydonOct 12, 2021
2021-10-12

Some exchange traded funds purport to deliver efficient core exposures, but that’s a mission the WisdomTree U.S. Efficient Core Fund (NTSX A-) lives and breathes.

Actively managed, NTSX puts a new, more relevant spin on the old 60/40 equity/fixed income split by employing a ‘90/60 Efficient Core’ strategy features exposure to the 500 largest domestic stocks and Treasury futures contracts. In straightforward terms, that’s a highly efficient structure.

“Put simply, if you have $100 to invest, you can invest $67 of that into NTSX have the equivalent exposure to $100-worth of an S&P 500/Treasury portfolio, leaving you with $33 left to explore more alpha-seeking, yield-seeking or diversifying exposures within your overall portfolio,” said WisdomTree’s Scott Welch and Joseph Tenaglia in a recent note.

With NTSX, an investor gains $10 of equivalent short-term T-bill exposure for every $100 allocated to the fund. That’s an efficient avenue for putting cash to work while generating a modest level of income and some protection from equity market volatility.

WisdomTree Efficient Core

More NTSX Perks

“The average effective duration for the fixed income portion of NTSX will typically be 7–7.5 years and is generally meant to offer the duration profile of traditional aggregate bond indexes,” note Welch and Tenaglia.

That puts NTSX’s bond exposure in intermediate-term territory, and that’s a positive for investors because intermediate-term Treasuries do what their longer duration counterparts often don’t: provide reduced correlations to stocks. Plus, intermediate-term government bonds often offer superior return profiles relative to short-term equivalents.

Speaking of reducing correlations, as Welch and Tenaglia note, investors can use the capital efficiencies created by NTSX to allocate to strategies that further enhance a portfolio’s correlation capabilities. Ideas on that front include the WisdomTree Managed Futures Strategy (WTMF A-) and the broad-based WisdomTree Enhanced Commodity Strategy Fund (GCC A).

Additionally, investors can leverage NTSX’s cash efficiencies to bolster income by considering allocations to assets such as master limited partnerships (MLPs), high-yield bonds, preferred stocks, and real estate investment trusts (REITs). Or, advisors and clients can go straight for growth.

“These thematic industries might include cloud computing, genomics, cybersecurity, fintech, online gaming/e-sports, etc. Advisors interested in this angle may want to explore the WisdomTree Disruptive Growth Model,” add Welch and Tenaglia.

The WisdomTree Disruptive Growth ETF Model Portfolio provides exposure to ‘thematic’ megatrends, including cloud computing, e-commerce, fintech, and more. Holdings in that model portfolio include the WisdomTree Modern Tech Platforms Fund (PLAT B-).

For more news, information, and strategy, visit the Model Portfolio Channel.


Content continues below advertisement

Loading Articles...
Our Sites
  • VettaFi
  • Advisor Perspectives
  • ETF Trends
Tools
  • ETF Screener
  • Mutual Fund to ETF Converter
  • Head-To-Head ETF Comparison
  • ETF Country Exposure Tool
  • ETF Stock Exposure Tool
  • ETF Database Pro
More Tools
  • Financial Advisor & RIA Center
Explore ETFs
  • ETF News
  • ETF Category Reports
  • Premium Articles
  • Alphabetical Listing of ETFs
  • Browse ETFs by ETF Database Category
  • Browse ETFs by Index
  • Browse ETFs by Issuer
  • Compare ETFs
Information
  • Contact Us
  • Terms of Use and Privacy Policy
  • © 2023 VettaFi LLC. All rights reserved.

Advertisement

Is Your Portfolio Positioned With Enough Global Exposure?

ETF Education Channel

How to Allocate Commodities in Portfolios

Tom LydonApr 26, 2022
2022-04-26

A long-running debate in asset allocation circles is how much of a portfolio an investor should...

Core Strategies Channel

Why ETFs Experience Limit Up/Down Protections

Karrie GordonMay 13, 2022
2022-05-13

In a digital age where information moves in milliseconds and millions of participants can transact...

}
X