WisdomTree Siegel Strategic Value Index™ Overview Video
Descriptive transcript
[This video uses animation to illustrate spoken content. The CIBC logo appears with the video title, “WisdomTree Siegel Strategic Value Index™]
The WisdomTree Siegel Strategic Value Index™ is an innovative quantitative investment strategy
[A flashing lightbulb appears. Then, several bricks appear to form a square. The square transforms into three hollow squares, each filled to varying degrees.]
that leverages decades of experience and insight, leading index construction, and objective asset allocation processes The following appears simultaneously:
[WisdomTree Investments Inc., a picture of Jeremy Siegel, and CIBC Capital Markets.]
from three prominent industry leaders.
[A book, and a rectangle with the text “P/E“ appears.]
As opposed to using traditional valuation metrics like Book Value or Price to Earnings Ratios,
[Two gears, a building, and a ruler appears.]
the Index bases its investment approach on the ratio of operating earnings and total enterprise value as more reliable measures of valuation.
[Paper documents appear. A green bar emerges on the right side of the document. The bar disappears, and then reappears on the left side in red.]
This approach avoids the potential for significant earnings swings due to changes in accounting principles;
[The documents transforms into a bar graph.]
excludes one-time events that do not impact the longer-term value of firms;
[Two buildings appear, each accompanied by a pie chart.]
and helps to create more accurate comparisons across companies with different capital structures.
[A bar chart illustrated by buildings appear. The bars change height.]
The methodology also leverages Professor Siegel’s research on aggregation bias, which addresses cases where a few companies with very large losses can result in an artificially high P/E ratio at an aggregate level.
Here’s how it works:
[Text reads, “Evaluate.” Ten rectangles, each formed by small squares appear. One of the rectangles enlarges to the foreground.]
Evaluate
The Index evaluates 500 of the largest publicly traded U.S. companies by market cap, across 10 industry sectors, for fundamental factors including operating earnings and total enterprise value.
[Text reads, “Select.” Four rectangles transform into solid bars, while the others disappear.]
Select
The Index selects the four best valued U.S. market sectors and invests quarterly.
[Text reads, “Rebalance.” The bars change in height.]
Rebalance
Each month, the selected market sectors are rebalanced to capture potential gains.
[Arrows appear moving upward. A magnifying glass appears, along with a square graphic cut in half.]
The Index then seeks to provide excess returns through a unique set of proprietary volatility controls.
[Text reads, “Trend Analysis.” The magnifying glass remains, and a positive line chart appears. The line chart then becomes negative.]
Trend analysis leverages long- and short-term trends to capitalize on momentum when markets are moving higher and to reduce exposure when markets are declining.
[Text reads, “Risk Management Strategy.” The square graphic reappears. The square expands into a rectangle. Text in the square graphic reads, “Long: Equity Strategy” on the left, and “Short: Broad Equity Market Index” on the right.]
The Index also includes a risk management strategy that combines a 100% long equity strategy, made up of the selected equity market sectors, with a 100% short position in a broad equity market index, in an effort to hedge against market risk when the broad market is declining.
[The rectangle shrinks back to a square. The magnifying glass appears, along with other empty squares. Arrows appear, moving upward, then downward.]
These innovative mechanisms built into the Index construction seek to maximize value while minimizing downside risk across market conditions.
[A green positive arrow appears within the magnifying glass. The square graphic transforms into a rectangle divided into two areas, where the text reads, “Equity Strategy” on the left, and “Risk Management Strategy” on the right.]
When the trend analysis is positive, the Index is always in some combination of the equity strategy and risk management strategy to seek a balanced return.
[The arrow inside the magnifying glass becomes red. The section for “Risk Management Strategy” replaces the entire rectangle.]
When the trend analysis is negative, the Index allocates all assets into the risk management strategy.
[The section for “Equity Strategy” reappears on the left.]
When Index volatility is low, the Index allocates up to a maximum of 150% to the strategy;
[A new section appears on the left. Text reads, “Cash.”]
as Index volatility increases, a cash allocation is added to maintain the volatility target.
The end result?
[A bull and a bear, both enclosed in separate square graphics appear.]
Whether it’s a bull market or a bear market,
[A series of small rectangles form a larger rectangle.]
the Index automatically seeks exposure to equities within a predefined volatility target. The WisdomTree Siegel Strategic Value Index™. Seeking excess returns through volatility controls.
[Text reads, “Learn more at wtsiegelindex.cibccm.com”]
Disclaimer
The WisdomTree Siegel Strategic Value Index™ (the “Index”) is the exclusive property of Canadian Imperial Bank of Commerce (Canadian Imperial Bank of Commerce, together with its affiliates, “CIBC”). CIBC has engaged Bloomberg Finance L.P. (“Bloomberg”) to maintain and to make certain calculations related to the Index. “Canadian Imperial Bank of Commerce”, “CIBC” and “Index” (collectively, the “CIBC Marks”) are trademarks or service marks of CIBC. CIBC has developed the index without considering the needs of any person. CIBC makes no representation or warranty, express or implied, regarding the Index or its development and has no responsibilities, obligations or liabilities with respect to the inception, adjustment, maintenance, operation or calculation.
None of CIBC, Bloomberg, or any third-party licensor (collectively, the “Index Parties”) to CIBC is acting, or has been authorized to act, as an agent of any Index Party or has in any way sponsored, promoted, solicited, negotiated, endorsed, offered, sold, issued, supported, structured or priced any Index-linked products (a “Product”) or provided investment advice to any person. No Index Party is a fiduciary or agent of any purchaser, seller or holder of any Product, or has made any representation or warranty, express or implied, regarding the advisability of purchasing, selling or holding any Product or the ability of the Index to track corresponding or relative market performance. Purchasers of any Product neither acquire any interest in the Index nor enter into any relationship of any kind whatsoever with any of the Index Parties. No Index Party guarantees the timeliness, accurateness, or completeness of the Index or any data or information relating thereto and shall have no liability in connection with the Index or any data or information relating thereto. No Index Party shall have any liability with respect to any Product, nor any liability for any loss relating to any Product, whether arising directly or indirectly from the use of the Index, its methodology, or otherwise.
BLOOMBERG is a trademark and service mark of Bloomberg. Bloomberg and its affiliates are not affiliated with CIBC. Bloomberg’s association with CIBC is to act as the administrator and calculation agent of the Index, which is the property of CIBC. Bloomberg does not guarantee the timeliness, accurateness, or completeness of the Index or any data or information relating thereto and shall have no liability in connection with the Index or any data or information relating thereto.
In calculating the level of the Index, the index methodology deducts a maintenance fee of 0.20% per annum, calculated daily. Furthermore, while the volatility control applied by CIBC as part of the index methodology may result in less fluctuation in rates of return as compared to indices without volatility controls, it may also reduce the overall rate of return for Products referencing the Index as compared to other indices not subject to volatility controls.
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