WisdomTree Trust
245 Park Avenue, 35th Floor
New York, New York 10167
October 30, 2018
VIA EDGAR
Ms. AshleyVroman-Lee
Division of Investment Management
U.S. Securities and Exchange Commission
100 F Street, NEWashington, DC 20549
| Re: | WisdomTree Trust |
File Nos.333-132380 and811-21864
DearMs. Vroman-Lee:
This response is provided on behalf of WisdomTree Trust (the “Trust” or the “Registrant”) with respect to Staff comments received orally on August 23, 2018 regarding the Trust’s Post-Effective Amendment No. 630, which was filed with the U.S. Securities and Exchange Commission (“SEC”) on July 13, 2018 for the purpose of registering shares of the WisdomTree Yield Enhanced International Aggregate Bond Fund (the “Fund”). The Staff’s comments and the Trust’s responses are set forth below. Capitalized terms used, but not defined, herein have the same meaning given to them in the Trust’s registration statement. In addition, the Registrant notes that WisdomTree Asset Management, Inc., the Fund’s investment adviser, no longer intends to operate the Fund as a “fund of funds” and all references to the Fund investing in Underlying Funds will be removed from the Fund’s registration statement.
Prospectus
| 1. | Comment:Please note that the term “bond” represents a certain type of investment and is covered by Rule35d-1 (the “Names Rule”) and the applicable 80% test. |
Response:The Registrant confirms that the Fund will normally invest at least 80% of its assets in the types of investments suggested by its name (i.e., bonds). Please note the following language is included in the “Investment Limitations –Non-Fundamental Policies” section of the Statement of Additional Information (“SAI”).
The Fund has adopted anon-fundamental investment policy in accordance with Rule35d-1 under the 1940 Act to invest, under normal circumstances, at least 80% of the value of its net assets, plus the amount of any borrowings for investment purposes, in the types of securities suggested by the Fund’s name. The Fund’s investment in derivatives will be included in its net assets when determining whether the Fund satisfies the 80% test described above.
October 30, 2018
Page 2
| 2. | Comment: Please provide the Staff with the details of the Fund’s fee table via correspondence once they become available. |
Response: The Fund’s fee table is set forth below.
Shareholder Fees (fees paid directly from your investment) | None | |||
Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment) | ||||
Management Fees | 0.24 | % | ||
Distribution and/or Service(12b-1) Fees | None | |||
Other Expenses | 0.00 | %1 | ||
Total Annual Fund Operating Expenses | 0.24 | % |
| 1 | “Other Expenses” are based on estimated amounts for the current fiscal year. |
| 3. | Comment: Please confirm that WisdomTree Asset Management does not plan to recoup any waived advisory fees or expenses reimbursed. |
Response: Confirmed.
| 4. | Comment: Disclosure in the “Additional Information About the Fund –Non-Principal Information About the Fund’s Investment Strategies” section of the Prospectus states that the Fund can lend up to 33 1/3% of its assets. If this is a principal investment strategy of the Fund, then please disclose this in the “Principal Investment Strategies of the Fund” section of the Prospectus, and add in the requisite risk language. |
Response:The Registrant confirms that securities lending is not a principal investment strategy of the Fund. As a result, the Registrant notes that information regarding securities lending is included under the heading “Additional Information About the Fund -Non-Principal Information About the Fund’s Investment Strategies” and corresponding risk information is located under the heading “AdditionalNon-Principal Risk Information – Securities Lending” in the Prospectus. The Registrant believes that the current disclosure is accurate and appropriate.
| 5. | Comment:Please provide the Staff with the index methodology prior to launching the Fund. |
Response: The Registrant has provided the Staff with the index methodology via email.
| 6. | Comment: Please explain briefly the “desired risk parameters and constraints” that are listed in the first full paragraph on page 3 of the “Principal Investment Strategies of the Fund” section in the Prospectus. |
Response: The Registrant notes that “within desired risk parameters and constraints” is a reference to the Fund’s aim to earn a higher yield “while broadly maintaining the risk characteristics of the Global Agg ex USD Universe when hedged into U.S. dollars.” The Registrant has revised the language as follows (new language is in bold below):
October 30, 2018
Page 3
The Index is designed to broadly capture the global investment grade, fixed income securities market, excluding securities denominated in the U.S. dollar, while seeking to (1) enhance yield within desired risk parameters and constraints, and (2) neutralize exposure to the fluctuations in the value of foreign currencies relative to the U.S. dollar. The Index uses a rules-based approach tore-weight distinct subgroups of the Bloomberg Barclays Global Aggregate Index, excluding those securities denominated in U.S. dollars (the “Global Agg ex USD Universe”), with the aim of earning a higher yield while broadlymaintaining the risk characteristics of the Global Agg ex USD Universe when hedged into U.S. dollars. The Global Agg ex USD Universe includes, but is not limited to, constituents from Europe, Asia Pacific and Canada. The subgroups identified within the Global Agg ex USD Universe reflect the different risk dimensions of investment grade securities, such as currency denomination, sector (asset class) exposure (i.e., treasuries, agency, credit, or securitized), interest rate risk (i.e., duration) and credit risk (i.e., spread). Each subgroup is defined and constructed to encompass a distinct investable exposure offering unique characteristics.
The Indexre-weights these subgroups based on atwo-step process. First, the Index allocates weights between sectors of each major currency bucket of the Global Agg ex USD Universe, while adhering to the risk dimensions specified below relative to the applicable currency bucket. Second, the Index allocates weights between each major currency bucket to enhance the net yield of the Global Agg ex USD Universe.
Yield can typically be increased by shifting exposure along any of a number of these risk dimensions andre-weighting the subcomponents of the Global Agg ex USD Universe.Risk is quantified as tracking error of the Index against the market value weighted combination of the above components.
| 7. | Comment:Please explain the disclosure in the “Principal Investment Strategies of the Fund” section in the Prospectus about the Index “retaining the risk characteristics of the Global Aggex-USD Universe when hedged into U.S. dollars”. Please describe what are the risk characteristics being retained. |
Response:Disclosure has been added to provide further clarity that the risk dimensions referred to are in areas such as currency denomination, sector (asset class) exposure (i.e., treasuries, agency, credit, or securitized), interest rate risk (i.e., duration) and credit risk (i.e., spread). The Fund seeks to minimize currency exchange rate risk by using derivatives to hedge foreign currencies against the U.S. dollar.
| 8. | Comment: Does the Index include emerging markets? If yes, please include the applicable disclosure. |
October 30, 2018
Page 4
Response: The Registrant confirms that the Index does not currently include securities from emerging market countries.
| 9. | Comment: Please disclose if the Index is concentrated in any industry. |
Response: As of October 30, 2018, the Index did not concentrate (i.e., hold 25% or more of its total assets) in the securities of a particular industry.
| 10. | Comment: For the Interest Rate Risk in the “Principal Risks of Investing in the Fund” section of the Prospectus, please change the three-year duration example to eight years since the Fund’s duration range can go up to eight years. |
Response: The statement has been revised to the following:
For example, the price of a security with an eight-year duration would be expected to drop by approximately 8% in response to a 1% increase in interest rates.
| 11. | Comment: Please indicate who will serve as the portfolio managers for the Fund. |
Response: The following disclosure has been added to the Prospectus:
The Fund is managed by BNY Mellon Asset Management North America Corporation’s Fixed Income Portfolio Management team. The individual members of the team jointly and primarily responsible for theday-to-day management of the Fund’s portfolio are described below.
Paul Benson, CFA, CAIA, Managing Director, Head of Fixed Income Portfolio Management, has been a portfolio manager of the Fund since its inception.
Stephanie Shu, CFA, Director, Senior Portfolio Manager, Fixed Income, has been a member of the portfolio management team for the Fund and a portfolio manager of the Fund since its inception.
* * * * *
Please feel free to contact me at917-267-3721 with any questions.
| Sincerely, |
/s/ Ryan M. Louvar |
| Ryan M. Louvar |
| Secretary |
| cc: | Joanne Antico, Esq. (WisdomTree) |
W. John McGuire, Esq. (Morgan, Lewis & Bockius LLP)
K. Michael Carlton, Esq. (Morgan, Lewis & Bockius LLP)