As filed with the Securities and Exchange Commission on July 29, 2008
Securities Act File No. 333-132380
Investment Company Act File No. 811-21864
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 |X|
Pre-Effective Amendment No. _____ |_|
Post-Effective Amendment No. 18 |X|
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 |X|
Amendment No. 20 |X|
(Check appropriate box or boxes.)
------------------------
WISDOMTREE TRUST
(Exact Name of Registrant as Specified in Charter)
380 Madison Avenue
21st Floor
New York, NY 10017
(Address of Principal Executive Offices) (Zip Code)
(Registrant's Telephone Number, including Area Code): 1-866-909-9973
JONATHAN STEINBERG
WISDOMTREE TRUST
380 Madison Avenue
21st Floor
New York, NY 10017
(Name and Address of Agent for Service)
Counsel for the Trust: Richard Morris, Esq.
Ropes & Gray LLP WisdomTree Asset Management, Inc.
1211 Avenue of the Americas 380 Madison Avenue, 21st Floor
New York, New York 10036 New York, NY 10017
Attention: Robert J. Borzone, Jr., Esq.
It is proposed that this filing will become effective (check appropriate box):
|X| Immediately upon filing pursuant to paragraph (b)
|_| On (date) pursuant to paragraph (b)
|_| 60 days after filing pursuant to paragraph (a)(1)
|_| On (date) pursuant to paragraph (a)(1)
|_| 75 days after filing pursuant to paragraph (a)(2)
|_| On (date) pursuant to paragraph (a)(2) of Rule 485.
If appropriate, check the following box:
|_| This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
[WISDOMTREE LOGO]
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Dividend Funds
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PROSPECTUS
July 29, 2008
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WisdomTree(R) Trust
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WisdomTree WisdomTree
Domestic Dividend Funds International Dividend Funds
WisdomTree Total Dividend Fund WisdomTree DEFA Fund
WisdomTree High-Yielding Equity Fund WisdomTree DEFA High-Yielding Equity Fund
WisdomTree LargeCap Dividend Fund WisdomTree Europe Total Dividend Fund
WisdomTree Dividend Top 100 Fund WisdomTree Europe High-Yielding Equity Fund
WisdomTree MidCap Dividend Fund WisdomTree Europe SmallCap Dividend Fund
WisdomTree SmallCap Dividend Fund WisdomTree Japan Total Dividend Fund
WisdomTree Japan High-Yielding Equity Fund
WisdomTree Japan SmallCap Dividend Fund
WisdomTree Pacific ex-Japan Total Dividend Fund
WisdomTree Pacific ex-Japan High-Yielding Equity Fund
WisdomTree International LargeCap Dividend Fund
WisdomTree International Dividend Top 100 Fund
WisdomTree International MidCap Dividend Fund
WisdomTree International SmallCap Dividend Fund
WisdomTree Emerging Markets High-Yielding Equity Fund
WisdomTree Emerging Markets SmallCap Dividend Fund
WisdomTree Middle East Dividend Fund
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THE 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 Trust (the "Trust") is a registered investment company that consists
of separate investment portfolios called "Funds." Each Fund seeks investment
results that closely correspond to the price and yield performance, before fees
and expenses, of a particular index that defines a dividend-paying segment of
the U.S. or international stock market. The indexes are created using a
proprietary methodology developed by WisdomTree Investments, Inc. The Funds
described in this Prospectus are listed in the Table of Contents.
Each Fund is an "exchange traded fund." This means that shares of the Funds are
listed on a national securities exchange, such as NYSE Arca, and trade at market
prices. The market price for a Fund's shares may be different from its net asset
value per share ("NAV"). Each Fund has its own CUSIP number and exchange trading
symbol.
Each Fund described in this Prospectus issues and redeems shares at NAV only in
large blocks of shares, typically 50,000 shares or more ("Creation Units").
These transactions are usually in exchange for a basket of securities and an
amount of cash. As a practical matter, only institutions or large investors
purchase or redeem Creation Units. Except when aggregated in Creation Units,
shares of each Fund are not redeemable securities.
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A NOTE TO RETAIL INVESTORS
Shares can be purchased directly from the issuing Fund only in exchange for a
basket of securities that is expected to be worth several million dollars. Most
individual investors, therefore, will not be able to purchase shares directly
from a Fund. Instead, these investors will purchase shares in the secondary
market through a brokerage account or with the assistance of a broker. Thus,
some of the information contained in this Prospectus - such as information about
purchasing and redeeming shares from a Fund and references to transaction fees
imposed on purchases and redemptions - is not relevant to most individual
investors. Shares purchased or sold through a brokerage account or with the
assistance of a broker may be subject to brokerage commissions and charges.
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INVESTMENT PRODUCTS: o ARE NOT FDIC INSURED o MAY LOSE VALUE o ARE NOT BANK
GUARANTEED
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WisdomTree Trust
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Table of Contents
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Overview 2
Investment Objective 2
Principal Investment Strategies 2
Principal Risk Factors Common to All Funds 3
WisdomTree Domestic Dividend Funds 6
WisdomTree Total Dividend Fund 6
WisdomTree High-Yielding Equity Fund 9
WisdomTree LargeCap Dividend Fund 12
WisdomTree Dividend Top 100 Fund 15
WisdomTree MidCap Dividend Fund 18
WisdomTree SmallCap Dividend Fund 21
WisdomTree International Dividend Funds 24
WisdomTree DEFA Fund 24
WisdomTree DEFA High-Yielding Equity Fund 27
WisdomTree Europe Total Dividend Fund 30
WisdomTree Europe High-Yielding Equity Fund 33
WisdomTree Europe SmallCap Dividend Fund 36
WisdomTree Japan Total Dividend Fund 39
WisdomTree Japan High-Yielding Equity Fund 42
WisdomTree Japan SmallCap Dividend Fund 45
WisdomTree Pacific ex-Japan Total Dividend Fund 48
WisdomTree Pacific ex-Japan High-Yielding Equity Fund 51
WisdomTree International LargeCap Dividend Fund 54
WisdomTree International Dividend Top 100 Fund 57
WisdomTree International MidCap Dividend Fund 60
WisdomTree International SmallCap Dividend Fund 63
WisdomTree Emerging Markets High-Yielding Equity Fund 66
WisdomTree Emerging Markets SmallCap Dividend Fund 69
WisdomTree Middle East Dividend Fund 72
Management 75
Investment Adviser 75
Sub-Adviser 76
Portfolio Managers 76
Portfolio Holdings Information 77
Buying and Selling Shares 77
Share Trading Prices 77
Determination of Net Asset Value 77
Dividends and Distributions 78
Book Entry 78
Delivery of Shareholder Documents - Householding 78
Frequent Purchases and Redemptions of Fund Shares 78
Investments by Registered Investment Companies 79
Taxes 79
Taxes on Distributions 79
Taxes When Fund Shares are Sold 80
Taxes on Creation and Redemption of Creation Units 80
Creation and Redemption 81
Authorized Participants and the Continuous Offering of Shares 81
Creation and Redemption Transaction Fees for Creation Units 81
Distribution 82
Additional Notices 83
Financial Highlights 83
Frequency Distribution of Discounts & Premiums 96
WisdomTree Trust Prospectus 1
Overview
This Prospectus provides the information you need to make an informed decision
about investing in the Funds.* It contains important facts about the Trust as a
whole and each Fund in particular.
Each Fund is an exchange-traded fund ("ETF"). ETFs are index funds whose shares
are listed on a stock exchange and traded like equity securities at market
prices. ETFs, such as the Funds, allow you to buy or sell shares that represent
the collective performance of a selected group of securities. ETFs are designed
to add the flexibility, ease and liquidity of stock-trading to the benefits of
traditional index-fund investing.
WisdomTree Asset Management, Inc. ("WisdomTree Asset Management") is the
investment adviser to each Fund. WisdomTree Investments, Inc. ("WisdomTree
Investments") is the parent company of WisdomTree Asset Management.
Investment Objective
Each Fund seeks investment returns that closely correspond to the price and
yield performance, before fees and expenses, of a particular index ("Index" or
"Dividend Index") developed by WisdomTree Investments. Each Index consists of
dividend-paying securities in the market suggested by its name that meet
specific criteria developed by WisdomTree Investments.
Principal Investment Strategies
This Prospectus describes six Funds that invest in dividend-paying U.S. equity
securities and seventeen Funds that invest in dividend-paying non-U.S. equity
securities. Each Fund tracks a specific U.S. or international stock Index
created by WisdomTree Investments. Each Dividend Index is designed to measure a
specific segment of the market for U.S. or international dividend-paying
securities. Each Fund seeks investment returns that closely correspond to the
price and yield performance, before fees and expenses, of its underlying Index.
The WisdomTree Indexes are "fundamentally weighted." The Dividend Indexes differ
from most traditional indexes in that the proportion, or "weighting," of the
securities in each Dividend Index is based on a measure of fundamental value.
The Dividend Indexes are weighted based on either the amount of cash dividends
that companies in each Index pay or the dividend yield of the companies in each
Index. This means that securities of companies that pay higher amounts of cash
dividends or have higher dividend yields generally will be more heavily weighted
in each Index and Fund. Most traditional indexes and index funds weight their
securities by looking simply at the market capitalization of such securities.
Common stocks, real estate investment trusts, tracking stocks, and holding
companies are eligible for inclusion in each Index. Only regular dividends
(i.e., established or quarterly dividends as opposed to non-recurring or special
dividends) are included in the determination of cash dividends or dividend
yield.
Under normal circumstances, at least 95% of a Fund's total assets (exclusive of
collateral held from securities lending) will be invested in the component
securities of its Index. Each Fund will normally invest at least 80% of its net
assets, plus the amount of any borrowings for investment purposes, in the types
of securities suggested by its name. Each Fund generally may invest up to 5% of
its total assets in securities not included in its Index, but which the Fund
believes will help it track its Index. For example, a Fund may invest in
securities that are not components of its Index in order to reflect various
corporate actions and other changes to its Index (such as reconstitutions,
additions and deletions). Under normal circumstances, as long as a Fund invests
at least 95% of its total assets in the securities of its Index, it also may
invest its other assets in cash and cash equivalents, as well as in shares of
other investment companies, futures contracts, options on futures contracts,
options, and swaps. WisdomTree Asset Management expects that, over time, the
correlation between each Fund's performance and that of its Index, before fees
and expenses, will be 95% or better.
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* "WisdomTree" is a registered mark of WisdomTree Investments and has been
licensed for use by the Trust. WisdomTree Investments has patent
applications pending on the methodology and operation of its Indexes and
the Funds.
2 WisdomTree Trust Prospectus
Each Fund uses a "Representative Sampling" strategy in seeking to track the
performance of its Index. A Fund using a Representative Sampling strategy
generally will invest in a sample of the securities in its Index whose risk,
return and other characteristics closely resemble the risk, return and other
characteristics of the Index as a whole.
To the extent that a Fund's underlying Index concentrates (i.e., holds 25% or
more of its total assets) in the securities of a particular industry or group of
industries, a Fund will concentrate its investments to approximately the same
extent as its Index.
Principal Risk Factors Common to All Funds
Each Fund is subject to the risks described below. Additional risks applicable
to the International Dividend Funds are described in the following section.
Certain additional risks associated with a Fund are discussed in the specific
section describing that Fund. Some or all of these risks may adversely affect a
Fund's NAV, trading price, yield, total return and/or its ability to meet its
objectives.
Stock Market Risk
The trading price of equity securities fluctuates in response to a variety of
factors. These factors include events impacting a single issuer, as well as
political, market and economic developments that affect specific market segments
and the market as a whole. Each Fund's NAV and market price, like stock prices
generally, will fluctuate within a wide range in response to these factors. As a
result, an investor could lose money over short or even long periods.
Investment Style Risk
The returns from the types of securities in which a Fund invests may
underperform returns from the various general securities markets or different
asset classes. This may cause a 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.
Interest Rate Risk
Each of the underlying Indexes, and therefore the Funds, may be more heavily
weighted than other types of investments in market sectors that are sensitive to
interest rate fluctuations (such as the financial and real estate sectors). The
Funds therefore may be more sensitive to fluctuations in interest rates than
other types of investments. In particular, increases to prevailing interest
rates could have a negative impact on the performance of the Funds.
Investment Approach Risk
Each Fund invests in the securities included in, or representative of, its Index
regardless of their investment merit. The Funds do not attempt to outperform
their Indexes or take defensive positions in declining markets. As a result,
each Fund's performance may be adversely affected by a general decline in the
U.S. or foreign market segments relating to its Index.
Concentration Risk
To the extent that a Fund's Index concentrates in the securities of a particular
industry or group of industries, the Fund will concentrate its investments to
approximately the same extent as its Index. A Fund that concentrates, or
otherwise invests a large portion of its assets in a single industry or group of
industries, may be more susceptible to any single economic, market, political or
regulatory occurrence affecting that industry or group of industries. In such
case, a Fund may be more volatile than funds based on broader or less volatile
market segments.
WisdomTree Trust Prospectus 3
Financial Sector Risk
The Funds generally invest a relatively large percentage of their assets in
securities of companies in the financial sector and therefore the performance of
the Funds will be impacted by events affecting this sector. This sector can be
significantly affected by changes in interest rates, the rate of corporate and
consumer debt defaulted, price competition, and the availability and cost of
capital.
Non-Diversification Risk
Each 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. As a result, a 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.
Issuer-Specific Risk
Changes in the financial condition of an issuer or counterparty, changes in
specific economic or political conditions that affect a particular type of
security or issuer, and changes in general economic or political conditions can
affect a security's or instrument's value. The value of securities of smaller,
less well-known issuers can be more volatile than that of larger issuers.
Issuer-specific events can have a negative impact on the value of a Fund.
Non-Correlation Risk
The performance of a Fund and its Index may vary somewhat for a variety of
reasons. For example, each Fund incurs operating expenses and portfolio
transaction costs not incurred by its Index. In addition, a Fund may not be
fully invested in the securities of its Index at all times. The use of sampling
techniques may affect a Fund's ability to achieve close correlation with its
Index. A Fund using a Representative Sampling strategy generally can be expected
to have a greater non-correlation risk.
Management Risk
Because each Fund may not fully replicate its Index and may hold securities not
included in its Index, a Fund is subject to management risk. This is the risk
that the Fund's investment strategy, the implementation of which is subject to a
number of constraints, may not produce the intended results.
Market Trading Risk
Although Fund shares are listed on national securities exchanges, there can be
no assurance that an active trading market for Fund shares will develop or be
maintained. If an active market is not maintained, investors may find it
difficult to buy or sell Fund shares. Trading of shares of a Fund on a stock
exchange may be halted if exchange officials deem such action appropriate, if
the Fund is delisted, or if the activation of marketwide "circuit breakers"
halts stock trading generally. If a Fund's shares are delisted, the Fund may
seek to list its shares on another market, merge with another ETF, or redeem its
shares at NAV. WisdomTree Asset Management believes that, under normal market
conditions, large market price discounts or premiums to NAV will not be
sustained because of arbitrage opportunities.
4 WisdomTree Trust Prospectus
Shares of the Funds 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
each Fund will approximate the respective Fund's NAV, there may be times when
the market price and the NAV vary significantly. Thus, you may pay more than NAV
when you buy shares of a Fund in the secondary market, and you may receive less
than NAV when you sell those shares in the secondary market.
The market price of Fund shares during the trading day, like the price of any
exchange-traded security, includes a "bid/ask" spread charged by the exchange
specialist, market makers or other participants that trade the Fund shares. The
bid/ask spread on ETF shares is likely to be larger on ETFs that are traded less
frequently. In addition, in times of severe market disruption, the bid/ask
spread can increase significantly. At those times, Fund shares are most likely
to be traded at a discount to NAV, and the discount is likely to be greatest
when the price of shares is falling fastest, which may be the time that you most
want to sell your shares. WisdomTree Asset Management believes that, under
normal market conditions, large market price discounts or premiums to NAV will
not be sustained because of arbitrage opportunities.
Lack of Governmental Insurance or Guarantee
An investment in a Fund is not a bank deposit and it is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
Fiscal Policy Risk
Any repeal or failure to extend the current federal tax treatment of qualified
dividend income could make dividend-paying securities less appealing to
investors and could have a negative impact on the performance of the Funds.
Principal Risk Factors Common to the International Dividend Funds
Foreign Securities Risk
Investments in non-U.S. securities involve certain risks that may not be present
with investments in U.S. securities. For example, investments in non-U.S.
securities may be subject to risk of loss due to foreign currency fluctuations
or to political or economic instability. 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 a Fund does
not price its shares, the value of the securities in a Fund's portfolio may
change on days when shareholders will not be able to purchase or sell a Fund's
shares. Conversely, Fund shares may trade on days when foreign exchanges are
close. Each of these factors can make investments in the Fund more volatile and
potentially less liquid than other types of investments.
Currency Risk
Because a Fund's NAV is determined on the basis of U.S. dollars, the U.S. dollar
value of your investment in a Fund may go down if the value of the local
currency of the non-U.S. markets in which a Fund invests depreciates against the
U.S. dollar. This is true even if the local currency value of securities in a
Fund's holdings goes up.
WisdomTree Trust Prospectus 5
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WisdomTree Domestic Dividend Funds
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WisdomTree Total
Dividend Fund
Fund Facts
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Cusip Number:
o 97717W109
Exchange Trading Symbol:
o DTD
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WisdomTree Total Dividend Fund
Investment Objective
The Fund seeks to track the price and yield performance, before fees and
expenses, of the WisdomTree Dividend Index. Since the Fund's investment
objective has been adopted as a non-fundamental investment policy, the Fund's
investment objective may be changed without a vote of shareholders.
Primary Investment Strategies
The Fund employs a "passive management" - or indexing - investment approach
designed to track the performance of the WisdomTree Dividend Index. The Fund
attempts to invest all, or substantially all, of its assets in the stocks that
make up the Index. The Fund generally uses a Representative Sampling strategy to
achieve its investment objective.
Index Description
The WisdomTree Dividend Index measures the performance of U.S. companies that
pay regular cash dividends on shares of their common stock and that meet
specified requirements as of the Index measurement date. The Index consists of
companies that: (i) are incorporated in the United States (including Puerto
Rico), (ii) are listed on the New York Stock Exchange ("NYSE"), American Stock
Exchange ("AMEX"), the NASDAQ Global Select Market or NASDAQ Global Market
("NASDAQ"), (iii) pay regular cash dividends on shares of their common stock,
(iv) have a market capitalization of at least $100 million on the Index
measurement date, and (v) have an average daily dollar trading volume of at
least $100,000 for the three months prior to the Index measurement date.
Companies are weighted in the Index based on their projected cash dividends as
of the Index measurement date. The Index includes all large-capitalization,
mid-capitalization and small-capitalization securities that meet the Index
requirements and is, in this sense, a total market index for the dividend-paying
segment of the U.S. market. As of June 30, 2008, approximately 77% of the
capitalization of the Index consisted of companies with market capitalizations
over $10.0 billion.
Primary Investment Risks
You can lose money on your investment in the Fund. For information about the
risks of investing in the Fund, see the section herein entitled "Principal Risk
Factors Common to All Funds."
Performance Information
The bar chart that follows shows the annual total returns of the Fund for each
full calendar year since the Fund commenced operations. The table that follows
the bar chart shows the Fund's average annual total returns, both before and
after taxes. The bar chart and table provide an indication of the risks of
investing in the Fund by showing the Fund's performance for calendar year 2007
and showing how the Fund's average annual
6 WisdomTree Trust Prospectus
returns compared with its underlying index and another measure of market
performance. All returns assume reinvestment of dividends and distributions. The
Fund's past performance (before and after taxes) is not necessarily an
indication of how the Fund will perform in the future.
[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
2007
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Total Return 1.34%
The Fund's year-to-date total return as of June 30, 2008 was (15.80)%.
Best and Worst Quarter Returns (for the period reflected in the bar chart above)
--------------------------------------------------------------------------------
Return Quarter/Year
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Highest Return 4.44% 2/2007
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Lowest Return (5.00)% 4/2007
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Average Annual Total Returns as of December 31, 2007
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WisdomTree Total Dividend Fund 1 Year Since Inception(1)
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Return before taxes 1.34% 10.89%
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Return after taxes on distributions(2) 0.40% 9.95%
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Return after taxes on distributions and sale of Fund shares 0.88% 8.75%
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Russell 3000 Index(3)
(reflects no deduction for fees, expenses or taxes) 5.11% 12.60%
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WisdomTree Dividend Index
(reflects no deduction for fees, expenses or taxes) 1.94% 11.12%
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(1) The Fund commenced operations on June 16, 2006.
(2) After-tax returns are calculated using the highest historical individual
federal marginal income tax rates and do not reflect the impact of state
and local taxes. Actual after-tax returns depend on your tax situation and
may differ from those shown and are not relevant if you hold your shares
through tax-deferred arrangements, such as 401(k) plans or individual
retirement accounts. In some cases the return after taxes may exceed the
return before taxes due to an assumed tax benefit from any losses on a
sale of Fund shares at the end of the measurement period.
(3) The Russell 3000 Index measures the performance of the 3,000 largest U.S.
companies based on total market capitalization.
WisdomTree Trust Prospectus 7
Fees and Expenses
The following table describes the fees and expenses you may pay if you buy and
hold shares of the Fund. The fees are expressed as a percentage of the Fund's
average net assets. You may also incur customary brokerage charges when buying
or selling Fund shares.
--------------------------------------------------------------------------------
Shareholder Fees None
(fees paid directly from your investment, but see the Creation
Transaction Fees and Redemption Transaction Fees section below)
--------------------------------------------------------------------------------
Annual Fund Operating Expenses (expenses deducted from Fund assets)
--------------------------------------------------------------------------------
Management Fees 0.28%
--------------------------------------------------------------------------------
Distribution and/or Service (12b-1) Fees None
--------------------------------------------------------------------------------
Other Expenses(a) 0.00%
--------------------------------------------------------------------------------
Total Annual Fund Operating Expenses 0.28%
--------------------------------------------------------------------------------
(a) WisdomTree Asset Management has agreed to pay all operating expenses of
the Fund, except interest expenses and taxes, brokerage expenses, future
distribution fees or expenses, and extraordinary expenses through July 31,
2009. WisdomTree Asset Management receives a fee of up to .0044% in
exchange for providing certain non-advisory services to the Fund.
The following example is intended to help retail investors compare the cost of
investing in the Fund with the cost of investing in other funds. It illustrates
the hypothetical expenses that such investors would incur over various periods
if they invest $10,000 in the Fund for the time periods indicated and then
redeemed all of the shares at the end of those periods. This example assumes
that the Fund provides a return of 5% a year and that operating expenses remain
the same. This example does not include the brokerage commission that retail
investors may pay to buy and sell shares of the Fund. Although your actual costs
may be higher or lower, based on these assumptions, your costs would be:
--------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
--------------------------------------------------------------------------------
$29 $90 $157 $356
--------------------------------------------------------------------------------
You would pay the following expenses if you did not redeem your shares:
--------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
--------------------------------------------------------------------------------
$29 $90 $157 $356
--------------------------------------------------------------------------------
8 WisdomTree Trust Prospectus
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WisdomTree Domestic Dividend Funds
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
WisdomTree High-Yielding
Equity Fund
Fund Facts
--------------------------------------------------------------------------------
Cusip Number:
o 97717W208
Exchange Trading Symbol:
o DHS
--------------------------------------------------------------------------------
WisdomTree High-Yielding Equity Fund
Investment Objective
The Fund seeks to track the price and yield performance, before fees and
expenses, of the WisdomTree High-Yielding Equity Index. Since the Fund's
investment objective has been adopted as a non-fundamental investment policy,
the Fund's investment objective may be changed without a vote of shareholders.
Primary Investment Strategies
The Fund employs a "passive management" - or indexing - investment approach
designed to track the performance of the WisdomTree High-Yielding Equity Index.
The Fund attempts to invest all, or substantially all, of its assets in the
stocks that make up the Index. The Fund generally uses a Representative Sampling
strategy to achieve its investment objective.
Index Description
The WisdomTree High-Yielding Equity Index measures the performance of the
highest yielding stocks within the WisdomTree Dividend Index that meet specified
requirements as of the Index measurement date. The Index is created by selecting
from the WisdomTree Dividend Index those companies with market capitalizations
of at least $200 million and average daily dollar trading volumes of at least
$200,000 for the three months prior to the Index measurement date. The top 30%
of these companies ranked by dividend yield are included in the Index. Companies
are weighted in the Index based on their projected cash dividends as of the
Index measurement date. The Index includes large-capitalization,
mid-capitalization and small-capitalization stocks. In this sense, it is a
dividend-weighted U.S. multi-capitalization index. As of June 30, 2008,
approximately 70% of the capitalization of the Index consisted of companies with
market capitalizations over $10.0 billion.
Primary Investment Risks
You can lose money on your investment in the Fund. For information about the
risks of investing in the Fund, see the section herein entitled "Principal Risk
Factors Common to All Funds."
Performance Information
The bar chart that follows shows the annual total returns of the Fund for each
full calendar year since the Fund commenced operations. The table that follows
the bar chart shows the Fund's average annual total returns, both before and
after taxes. The bar chart and table provide an indication of the risks of
investing in the Fund by showing the Fund's performance for calendar year 2007
and showing how the Fund's average annual returns compared with its underlying
index and another measure of market performance. All returns assume reinvestment
of dividends and distributions. The Fund's past performance (before and after
taxes) is not necessarily an indication of how the Fund will perform in the
future.
WisdomTree Trust Prospectus 9
[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
2007
-------
Total Return (4.42)%
The Fund's year-to-date total return as of June 30, 2008 was (23.36)%.
Best and Worst Quarter Returns (for the period reflected in the bar chart above)
-------------------------------------------------------------------------------------------
Return Quarter/Year
-------------------------------------------------------------------------------------------
Highest Return 2.69% 2/2007
-------------------------------------------------------------------------------------------
Lowest Return (8.59)% 4/2007
-------------------------------------------------------------------------------------------
Average Annual Total Returns as of December 31, 2007
-------------------------------------------------------------------------------------------
WisdomTree High-Yielding Equity Fund 1 Year Since Inception(1)
-------------------------------------------------------------------------------------------
Return before taxes (4.42)% 7.49%
-------------------------------------------------------------------------------------------
Return after taxes on distributions(2) (5.63)% 6.31%
-------------------------------------------------------------------------------------------
Return after taxes on distributions and sale of Fund shares (2.83)% 5.72%
-------------------------------------------------------------------------------------------
Russell 1000 Value Index(3)
(reflects no deduction for fees, expenses or taxes) (0.17)% 10.77%
-------------------------------------------------------------------------------------------
WisdomTree High-Yielding Equity Index
(reflects no deduction for fees, expenses or taxes) (4.53)% 7.39%
-------------------------------------------------------------------------------------------
(1) The Fund commenced operations on June 16, 2006.
(2) After-tax returns are calculated using the highest historical individual
federal marginal income tax rates and do not reflect the impact of state
and local taxes. Actual after-tax returns depend on your tax situation and
may differ from those shown and are not relevant if you hold your shares
through tax-deferred arrangements, such as 401(k) plans or individual
retirement accounts. In some cases the return after taxes may exceed the
return before taxes due to an assumed tax benefit from any losses on a
sale of Fund shares at the end of the measurement period.
(3) The Russell 1000 Value Index is a measure of the large-cap value segment
of the U.S. equity universe, selecting from the Russell 1000 Index.
Fees and Expenses
The following table describes the fees and expenses you may pay if you buy and
hold shares of the Fund. The fees are expressed as a percentage of the Fund's
average net assets. You may also incur customary brokerage charges when buying
or selling Fund shares.
-------------------------------------------------------------------------------------------
Shareholder Fees None
(fees paid directly from your investment, but see the Creation Transaction Fees
and Redemption Transaction Fees section below)
-------------------------------------------------------------------------------------------
Annual Fund Operating Expenses (expenses deducted from Fund assets)
-------------------------------------------------------------------------------------------
Management Fees 0.38%
-------------------------------------------------------------------------------------------
Distribution and/or Service (12b-1) Fees None
-------------------------------------------------------------------------------------------
Other Expenses(a) 0.00%
-------------------------------------------------------------------------------------------
Total Annual Fund Operating Expenses 0.38%
-------------------------------------------------------------------------------------------
(a) WisdomTree Asset Management has agreed to pay all operating expenses of
the Fund, except interest expenses and taxes, brokerage expenses, future
distribution fees or expenses, and extraordinary expenses through July 31,
2009. WisdomTree Asset Management receives a fee of up to .0044% in
exchange for providing certain non-advisory services to the Fund.
10 WisdomTree Trust Prospectus
The following example is intended to help retail investors compare the cost of
investing in the Fund with the cost of investing in other funds. It illustrates
the hypothetical expenses that such investors would incur over various periods
if they invest $10,000 in the Fund for the time periods indicated and then
redeemed all of the shares at the end of those periods. This example assumes
that the Fund provides a return of 5% a year and that operating expenses remain
the same. This example does not include the brokerage commission that retail
investors may pay to buy and sell shares of the Fund. Although your actual costs
may be higher or lower, based on these assumptions, your costs would be:
--------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
--------------------------------------------------------------------------------
$39 $122 $213 $480
--------------------------------------------------------------------------------
You would pay the following expenses if you did not redeem your shares:
--------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
--------------------------------------------------------------------------------
$39 $122 $213 $480
--------------------------------------------------------------------------------
WisdomTree Trust Prospectus 11
--------------------------------------------------------------------------------
WisdomTree Domestic Dividend Funds
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
WisdomTree LargeCap
Dividend Fund
Fund Facts
--------------------------------------------------------------------------------
Cusip Number:
o 97717W307
Exchange Trading Symbol:
o DLN
--------------------------------------------------------------------------------
WisdomTree LargeCap Dividend Fund
Investment Objective
The Fund seeks to track the price and yield performance, before fees and
expenses, of the WisdomTree LargeCap Dividend Index. Since the Fund's investment
objective has been adopted as a non-fundamental investment policy, the Fund's
investment objective may be changed without a vote of shareholders.
Primary Investment Strategies
The Fund employs a "passive management" - or indexing - investment approach
designed to track the performance of the WisdomTree LargeCap Dividend Index. The
Fund attempts to invest all, or substantially all, of its assets in the stocks
that make up the Index. The Fund generally uses a Representative Sampling
strategy to achieve its investment objective.
Index Description
The WisdomTree LargeCap Dividend Index measures performance of companies that
pay regular cash dividends from the large-capitalization segment of the
WisdomTree Dividend Index and that meet specified requirements as of the Index
measurement date. The Index consists of the 300 companies in the WisdomTree
Dividend Index with the highest market capitalizations as of the Index
measurement date. Companies in the Index are weighted based on their projected
cash dividends as of the Index measurement date. As of June 30, 2008,
approximately 92% of the capitalization of the Index consisted of companies with
market capitalizations over $10.0 billion.
Primary Investment Risks
You can lose money on your investment in the Fund. For information about the
risks of investing in the Fund, see the section herein entitled "Principal Risk
Factors Common to All Funds."
Performance Information
The bar chart that follows shows the annual total returns of the Fund for each
full calendar year since the Fund commenced operations. The table that follows
the bar chart shows the Fund's average annual total returns, both before and
after taxes. The bar chart and table provide an indication of the risks of
investing in the Fund by showing the Fund's performance for calendar year 2007
and showing how the Fund's average annual returns compared with its underlying
index and another measure of market performance. All returns assume reinvestment
of dividends and distributions. The Fund's past performance (before and after
taxes) is not necessarily an indication of how the Fund will perform in the
future.
12 WisdomTree Trust Prospectus
[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
2007
-------
Total Return 2.79%
The Fund's year-to-date total return as of June 30, 2008 was (16.63)%.
Best and Worst Quarter Returns (for the period reflected in the bar chart above)
-------------------------------------------------------------------------------------------
Return Quarter/Year
-------------------------------------------------------------------------------------------
Highest Return 4.88% 2/2007
-------------------------------------------------------------------------------------------
Lowest Return (4.44)% 4/2007
-------------------------------------------------------------------------------------------
Average Annual Total Returns as of December 31, 2007
-------------------------------------------------------------------------------------------
WisdomTree LargeCap Dividend Fund 1 Year Since Inception(1)
-------------------------------------------------------------------------------------------
Return before taxes 2.79% 12.14%
-------------------------------------------------------------------------------------------
Return after taxes on distributions(2) 1.85% 11.23%
-------------------------------------------------------------------------------------------
Return after taxes on distributions and sale of Fund shares 1.82% 9.84%
-------------------------------------------------------------------------------------------
S&P 500 Index(3)
(reflects no deduction for fees, expenses or taxes) 5.46% 13.02%
-------------------------------------------------------------------------------------------
WisdomTree LargeCap Dividend Index
(reflects no deduction for fees, expenses or taxes) 2.92% 12.05%
-------------------------------------------------------------------------------------------
(1) The Fund commenced operations on June 16, 2006.
(2) After-tax returns are calculated using the highest historical individual
federal marginal income tax rates and do not reflect the impact of state
and local taxes. Actual after-tax returns depend on your tax situation and
may differ from those shown and are not relevant if you hold your shares
through tax-deferred arrangements, such as 401(k) plans or individual
retirement accounts. In some cases the return after taxes may exceed the
return before taxes due to an assumed tax benefit from any losses on a
sale of Fund shares at the end of the measurement period.
(3) The S&P 500 Index is a capitalization-weighted index of 500 stocks
designed to represent the performance of the leading industries in the
United States economy.
Fees and Expenses
The following table describes the fees and expenses you may pay if you buy and
hold shares of the Fund. The fees are expressed as a percentage of the Fund's
average net assets. You may also incur customary brokerage charges when buying
or selling Fund shares.
-------------------------------------------------------------------------------------------
Shareholder Fees None
(fees paid directly from your investment, but see the Creation Transaction Fees
and Redemption Transaction Fees section below)
-------------------------------------------------------------------------------------------
Annual Fund Operating Expenses (expenses deducted from Fund assets)
-------------------------------------------------------------------------------------------
Management Fees 0.28%
-------------------------------------------------------------------------------------------
Distribution and/or Service (12b-1) Fees None
-------------------------------------------------------------------------------------------
Other Expenses(a) 0.00%
-------------------------------------------------------------------------------------------
Total Annual Fund Operating Expenses 0.28%
-------------------------------------------------------------------------------------------
(a) WisdomTree Asset Management has agreed to pay all operating expenses of
the Fund, except interest expenses and taxes, brokerage expenses, future
distribution fees or expenses, and extraordinary expenses through July 31,
2009. WisdomTree Asset Management receives a fee of up to .0044% in
exchange for providing certain non-advisory services to the Fund.
WisdomTree Trust Prospectus 13
The following example is intended to help retail investors compare the cost of
investing in the Fund with the cost of investing in other funds. It illustrates
the hypothetical expenses that such investors would incur over various periods
if they invest $10,000 in the Fund for the time periods indicated and then
redeemed all of the shares at the end of those periods. This example assumes
that the Fund provides a return of 5% a year and that operating expenses remain
the same. This example does not include the brokerage commission that retail
investors may pay to buy and sell shares of the Fund. Although your actual costs
may be higher or lower, based on these assumptions, your costs would be:
--------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
--------------------------------------------------------------------------------
$29 $90 $157 $356
--------------------------------------------------------------------------------
You would pay the following expenses if you did not redeem your shares:
--------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
--------------------------------------------------------------------------------
$29 $90 $157 $356
--------------------------------------------------------------------------------
14 WisdomTree Trust Prospectus
--------------------------------------------------------------------------------
WisdomTree Domestic Dividend Funds
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
WisdomTree Dividend
Top 100 Fund
Fund Facts
--------------------------------------------------------------------------------
Cusip Number:
o 97717W406
Exchange Trading Symbol:
o DTN
--------------------------------------------------------------------------------
WisdomTree Dividend Top 100 Fund
Investment Objective
The Fund seeks to track the price and yield performance, before fees and
expenses, of the WisdomTree Dividend Top 100 Index. The WisdomTree Dividend Top
100 Index measures the performance of the 100 highest dividend-yielding
companies in the WisdomTree LargeCap Dividend Index. Since the Fund's investment
objective has been adopted as a non-fundamental investment policy, the Fund's
investment objective may be changed without a vote of shareholders.
Primary Investment Strategies
The Fund employs a "passive management" - or indexing - investment approach
designed to track the performance of the WisdomTree Dividend Top 100 Index. The
Fund attempts to invest all, or substantially all, of its assets in the stocks
that make up the Index. The Fund generally uses a Representative Sampling
strategy to achieve its investment objective.
Index Description
The WisdomTree Dividend Top 100 Index measures the performance of the 100
highest dividend-yielding companies in the WisdomTree LargeCap Dividend Index
that meet specified requirements as of the Index measurement date. Unlike the
other WisdomTree Domestic Indexes, which weight Index components based on
projected cash dividends, a component's weight in the Index is based on its
indicated annual dividend yield as of the Index measurement date. Indicated
annual dividend yield is calculated by annualizing the most recently declared
regular cash dividend per share and dividing the amount by the stock price. A
component company's weight in the Index is determined by dividing its indicated
annual dividend yield by the sum of all the indicated annual dividend yields for
all the component companies in the Index. The Index consists primarily of 100
large-capitalization securities and is, in this sense, a dividend-yield weighted
U.S. large-capitalization index. As of June 30, 2008, approximately 60% of the
capitalization of the Index consisted of companies with market capitalizations
over $10.0 billion and approximately 40% of the capitalization of the Index
consisted of companies with market capitalizations between $2.0 billion and
$10.0 billion.
Primary Investment Risks
You can lose money on your investment in the Fund. For information about the
risks of investing in the Fund, see the section herein entitled "Principal Risk
Factors Common to All Funds." In addition, the Fund is subject to the following
potential risks. As with all potential risks, this could decrease the value of
your investment.
o Utilities Investing. The Fund generally invests a relatively large
percentage of its assets in the utilities sector. The utilities sector can
be significantly affected by, among other things, demand for services,
government regulation, commodity prices and interest rate sensitivity.
WisdomTree Trust Prospectus 15
o Mid-Capitalization Investing. The Fund generally invests a relatively
large percentage of its assets in securities of mid-capitalization
companies. The securities of mid-capitalization companies may be more
vulnerable to adverse issuer, market, political, or economic developments
than the market as a whole or other types of securities. As a result, the
Fund may be more volatile than funds that invest in larger, more
established companies.
Performance Information
The bar chart that follows shows the annual total returns of the Fund for each
full calendar year since the Fund commenced operations. The table that follows
the bar chart shows the Fund's average annual total returns, both before and
after taxes. The bar chart and table provide an indication of the risks of
investing in the Fund by showing the Fund's performance for calendar year 2007
and showing how the Fund's average annual returns compared with its underlying
index and another measure of market performance. All returns assume reinvestment
of dividends and distributions. The Fund's past performance (before and after
taxes) is not necessarily an indication of how the Fund will perform in the
future.
[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
2007
-------
Total Return 0.11%
The Fund's year-to-date total return as of June 30, 2008 was (18.63)%.
Best and Worst Quarter Returns (for the period reflected in the bar chart above)
--------------------------------------------------------------------------------
Return Quarter/Year
--------------------------------------------------------------------------------
Highest Return 3.44% 1/2007
--------------------------------------------------------------------------------
Lowest Return (6.15)% 4/2007
--------------------------------------------------------------------------------
Average Annual Total Returns as of December 31, 2007
-------------------------------------------------------------------------------------------
WisdomTree Dividend Top 100 Fund 1 Year Since Inception(1)
-------------------------------------------------------------------------------------------
Return before taxes 0.11% 10.77%
-------------------------------------------------------------------------------------------
Return after taxes on distributions(2) (1.00)% 9.73%
-------------------------------------------------------------------------------------------
Return after taxes on distributions and sale of Fund shares 0.10% 8.60%
-------------------------------------------------------------------------------------------
Dow Jones U.S. Select Dividend Index(3)
(reflects no deduction for fees, expenses or taxes) (5.14)% 5.85%
-------------------------------------------------------------------------------------------
WisdomTree Dividend Top 100 Index
(reflects no deduction for fees, expenses or taxes) 0.96% 10.98%
-------------------------------------------------------------------------------------------
(1) The Fund commenced operations on June 16, 2006.
(2) After-tax returns are calculated using the highest historical individual
federal marginal income tax rates and do not reflect the impact of state
and local taxes. Actual after-tax returns depend on your tax situation and
may differ from those shown and are not relevant if you hold your shares
through tax-deferred arrangements, such as 401(k) plans or individual
retirement accounts. In some cases the return after taxes may exceed the
return before taxes due to an assumed tax benefit from any losses on a
sale of Fund shares at the end of the measurement period.
(3) The Dow Jones U.S. Select Dividend Index measures the performance of 100
U.S. dividend-paying companies.
16 WisdomTree Trust Prospectus
Fees and Expenses
The following table describes the fees and expenses you may pay if you buy and
hold shares of the Fund. The fees are expressed as a percentage of the Fund's
average net assets. You may also incur customary brokerage charges when buying
or selling Fund shares.
-------------------------------------------------------------------------------------------
Shareholder Fees None
(fees paid directly from your investment, but see the Creation Transaction Fees
and Redemption Transaction Fees section below)
-------------------------------------------------------------------------------------------
Annual Fund Operating Expenses (expenses deducted from Fund assets)
-------------------------------------------------------------------------------------------
Management Fees 0.38%
-------------------------------------------------------------------------------------------
Distribution and/or Service (12b-1) Fees None
-------------------------------------------------------------------------------------------
Other Expenses(a) 0.00%
-------------------------------------------------------------------------------------------
Total Annual Fund Operating Expenses 0.38%
-------------------------------------------------------------------------------------------
(a) WisdomTree Asset Management has agreed to pay all operating expenses of
the Fund, except interest expenses and taxes, brokerage expenses, future
distribution fees or expenses, and extraordinary expenses through July 31,
2009. WisdomTree Asset Management receives a fee of up to .0044% in
exchange for providing certain non-advisory services to the Fund.
The following example is intended to help retail investors compare the cost of
investing in the Fund with the cost of investing in other funds. It illustrates
the hypothetical expenses that such investors would incur over various periods
if they invest $10,000 in the Fund for the time periods indicated and then
redeemed all of the shares at the end of those periods. This example assumes
that the Fund provides a return of 5% a year and that operating expenses remain
the same. This example does not include the brokerage commission that retail
investors may pay to buy and sell shares of the Fund. Although your actual costs
may be higher or lower, based on these assumptions, your costs would be:
-------------------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
-------------------------------------------------------------------------------------------
$39 $122 $213 $480
-------------------------------------------------------------------------------------------
You would pay the following expenses if you did not redeem your shares:
-------------------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
-------------------------------------------------------------------------------------------
$39 $122 $213 $480
-------------------------------------------------------------------------------------------
WisdomTree Trust Prospectus 17
--------------------------------------------------------------------------------
WisdomTree Domestic Dividend Funds
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
WisdomTree MidCap
Dividend Fund
Fund Facts
--------------------------------------------------------------------------------
Cusip Number:
o 97717W505
Exchange Trading Symbol:
o DON
--------------------------------------------------------------------------------
WisdomTree MidCap Dividend Fund
Investment Objective
The Fund seeks to track the price and yield performance, before fees and
expenses, of the WisdomTree MidCap Dividend Index. Since the Fund's investment
objective has been adopted as a non-fundamental investment policy, the Fund's
investment objective may be changed without a vote of shareholders.
Primary Investment Strategies
The Fund employs a "passive management" - or indexing - investment approach
designed to track the performance of the WisdomTree MidCap Dividend Index. The
Fund attempts to invest all, or substantially all, of its assets in the stocks
that make up the Index. A portion of the Index is comprised of stocks issued by
REITs. The Fund generally uses a Representative Sampling strategy to achieve its
investment objective.
Index Description
The WisdomTree MidCap Dividend Index measures the performance of companies that
pay regular cash dividends from the mid-capitalization segment of the WisdomTree
Dividend Index and that meet specified requirements as of the Index measurement
date. The Index is created by first removing the 300 companies with the highest
market capitalizations as of the Index measurement date from the WisdomTree
Dividend Index. Those companies that comprise the top 75% of the remaining
market capitalization of the WisdomTree Dividend Index as of the Index
measurement date are included in the WisdomTree MidCap Dividend Index. Companies
are weighted in the Index based on their projected cash dividends as of the
Index measurement date. The Index includes primarily mid-capitalization
securities and is, in this sense, a dividend-weighted U.S. mid-capitalization
index. As of June 30, 2008, approximately 82% of the capitalization of the Index
consisted of companies with market capitalizations between $2.0 billion and
$10.0 billion.
Primary Investment Risks
You can lose money on your investment in the Fund. For information about the
risks of investing in the Fund, see the section herein entitled "Principal Risk
Factors Common to All Funds." In addition, the Fund is subject to the following
potential risks. As with all potential risks, this could decrease the value of
your Fund investment.
o Mid-Capitalization Investing. The Fund invests primarily in securities of
mid-capitalization companies. The securities of mid-capitalization
companies may be more vulnerable to adverse issuer, market, political, or
economic developments than the market as a whole or other types of
securities. As a result, the Fund may be more volatile than funds that
invest in larger, more established companies.
o Investments in REITs. The Fund generally invests a relatively large
percentage of its assets in real estate investment trusts or "REITs."
Investments in REITs subject the
18 WisdomTree Trust Prospectus
Fund to risks associated with the direct ownership of real estate. Market
conditions or events affecting the overall market for REITs, such as
declining property values or rising interest rates, could have a negative
impact on the Fund's performance.
o Utilities Investing. The Fund generally invests a relatively large
percentage of its assets in the utilities sector. The utilities sector can
be significantly affected by, among other things, demand for services,
government regulation, commodity prices and interest rate sensitivity.
Performance Information
The bar chart that follows shows the annual total returns of the Fund for each
full calendar year since the Fund commenced operations. The table that follows
the bar chart shows the Fund's average annual total returns, both before and
after taxes. The bar chart and table provide an indication of the risks of
investing in the Fund by showing the Fund's performance for calendar year 2007
and showing how the Fund's average annual returns compared with its underlying
index and another measure of market performance. All returns assume reinvestment
of dividends and distributions. The Fund's past performance (before and after
taxes) is not necessarily an indication of how the Fund will perform in the
future.
[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
2007
-------
Total Return (5.49)%
The Fund's year-to-date total return as of June 30, 2008 was (10.56)%.
Best and Worst Quarter Returns (for the period reflected in the bar chart above)
-------------------------------------------------------------------------------------------
Return Quarter/Year
-------------------------------------------------------------------------------------------
Highest Return 2.68% 1/2007
-------------------------------------------------------------------------------------------
Lowest Return (6.55)% 4/2007
-------------------------------------------------------------------------------------------
Average Annual Total Returns as of December 31, 2007
-------------------------------------------------------------------------------------------
WisdomTree MidCap Dividend Fund 1 Year Since Inception(1)
-------------------------------------------------------------------------------------------
Return before taxes (5.49)% 5.33%
-------------------------------------------------------------------------------------------
Return after taxes on distributions(2) (6.42)% 4.35%
-------------------------------------------------------------------------------------------
Return after taxes on distributions and sale of Fund shares (3.54)% 3.99%
-------------------------------------------------------------------------------------------
S&P Mid Cap 400 Index(3)
(reflects no deduction for fees, expenses or taxes) 7.93% 11.40%
-------------------------------------------------------------------------------------------
WisdomTree MidCap Dividend Index
(reflects no deduction for fees, expenses or taxes) (7.25)% 3.99%
-------------------------------------------------------------------------------------------
(1) The Fund commenced operations on June 16, 2006.
(2) After-tax returns are calculated using the highest historical individual
federal marginal income tax rates and do not reflect the impact of state
and local taxes. Actual after-tax returns depend on your tax situation and
may differ from those shown and are not relevant if you hold your shares
through tax-deferred arrangements, such as 401(k) plans or individual
retirement accounts. In some cases the return after taxes may exceed the
return before taxes due to an assumed tax benefit from any losses on a
sale of Fund shares at the end of the measurement period.
(3) The S&P Mid Cap 400 Index is a capitalization weighted index which
measures the performance of the mid-cap range of the U.S. stock market.
WisdomTree Trust Prospectus 19
Fees and Expenses
The following table describes the fees and expenses you may pay if you buy and
hold shares of the Fund. The fees are expressed as a percentage of the Fund's
average net assets. You may also incur customary brokerage charges when buying
or selling Fund shares.
-------------------------------------------------------------------------------------------
Shareholder Fees None
(fees paid directly from your investment, but see the Creation Transaction Fees
and Redemption Transaction Fees section below)
-------------------------------------------------------------------------------------------
Annual Fund Operating Expenses (expenses deducted from Fund assets)
-------------------------------------------------------------------------------------------
Management Fees 0.38%
-------------------------------------------------------------------------------------------
Distribution and/or Service (12b-1) Fees None
-------------------------------------------------------------------------------------------
Other Expenses(a) 0.00%
-------------------------------------------------------------------------------------------
Total Annual Fund Operating Expenses 0.38%
-------------------------------------------------------------------------------------------
(a) WisdomTree Asset Management has agreed to pay all operating expenses of
the Fund, except interest expenses and taxes, brokerage expenses, future
distribution fees or expenses, and extraordinary expenses through July 31,
2009. WisdomTree Asset Management receives a fee of up to .0044% in
exchange for providing certain non-advisory services to the Fund.
The following example is intended to help retail investors compare the cost of
investing in the Fund with the cost of investing in other funds. It illustrates
the hypothetical expenses that such investors would incur over various periods
if they invest $10,000 in the Fund for the time periods indicated and then
redeemed all of the shares at the end of those periods. This example assumes
that the Fund provides a return of 5% a year and that operating expenses remain
the same. This example does not include the brokerage commission that retail
investors may pay to buy and sell shares of the Fund. Although your actual costs
may be higher or lower, based on these assumptions, your costs would be:
-------------------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
-------------------------------------------------------------------------------------------
$39 $122 $213 $480
-------------------------------------------------------------------------------------------
You would pay the following expenses if you did not redeem your shares:
-------------------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
-------------------------------------------------------------------------------------------
$39 $122 $213 $480
-------------------------------------------------------------------------------------------
20 WisdomTree Trust Prospectus
--------------------------------------------------------------------------------
WisdomTree Domestic Dividend Funds
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
WisdomTree SmallCap
Dividend Fund
Fund Facts
--------------------------------------------------------------------------------
Cusip Number:
o 97717W604
Exchange Trading Symbol:
o DES
--------------------------------------------------------------------------------
WisdomTree SmallCap Dividend Fund
Investment Objective
The Fund seeks to track the price and yield performance, before fees and
expenses, of the WisdomTree SmallCap Dividend Index. Since the Fund's investment
objective has been adopted as a non-fundamental investment policy, the Fund's
investment objective may be changed without a vote of shareholders.
Primary Investment Strategies
The Fund employs a "passive management" - or indexing - investment approach
designed to track the performance of the WisdomTree SmallCap Dividend Index. The
Fund attempts to invest all, or substantially all, of its assets in the stocks
that make up the Index. The Fund generally uses a Representative Sampling
strategy to achieve its investment objective.
Index Description
The WisdomTree SmallCap Dividend Index measures the performance of companies
that pay regular cash dividends from the small-capitalization segment of the
WisdomTree Dividend Index and that meet specified requirements as of the Index
measurement date. The Index is created by first removing the 300 companies with
the highest market capitalizations as of the Index measurement date from the
WisdomTree Dividend Index. Those companies that comprise the bottom 25% of the
remaining market capitalization of the WisdomTree Dividend Index as of the Index
measurement date are included in the WisdomTree SmallCap Dividend Index.
Companies are weighted in the Index based on their projected cash dividends as
of the Index measurement date. The Index includes primarily small-capitalization
securities and is, in this sense, a dividend-weighted U.S. small-capitalization
index. As of June 30, 2008, approximately 99% of the capitalization of the Index
consisted of companies with market capitalizations less than $2.0 billion.
Primary Investment Risks
You can lose money on your investment in the Fund. For information about the
risks of investing in the Fund, see the section herein entitled "Principal Risk
Factors Common to All Funds." In addition, the Fund is subject to the following
potential risks. As with all potential risks, this could decrease the value of
your Fund investment.
WisdomTree Trust Prospectus 21
o Small-Capitalization Investing. The Fund invests primarily in securities
of small-capitalization companies. As a result, the Fund may be more
volatile than funds that invest in larger, more established companies. The
securities of small-capitalization companies generally trade in lower
volumes and are subject to greater and more unpredictable price changes
than larger capitalization stocks or the stock market as a whole.
Small-capitalization companies may be particularly sensitive to changes in
interest rates, borrowing costs and earnings.
o Investments in REITs. The Fund generally invests a relatively large
percentage of its assets in real estate investment trusts or "REITs."
Investments in REITs subject the Fund to risks associated with the direct
ownership of real estate. Market conditions or events affecting the
overall market for REITs, such as declining property values or rising
interest rates, could have a negative impact on the Fund's performance.
Performance Information
The bar chart that follows shows the annual total returns of the Fund for each
full calendar year since the Fund commenced operations. The table that follows
the bar chart shows the Fund's average annual total returns, both before and
after taxes. The bar chart and table provide an indication of the risks of
investing in the Fund by showing the Fund's performance for calendar year 2007
and showing how the Fund's average annual returns compared with its underlying
index and another measure of market performance. All returns assume reinvestment
of dividends and distributions. The Fund's past performance (before and after
taxes) is not necessarily an indication of how the Fund will perform in the
future.
[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
2007
--------
Total Return (12.50)%
The Fund's year-to-date total return as of June 30, 2008 was (13.37)%.
Best and Worst Quarter Returns (for the period reflected in the bar chart above)
-------------------------------------------------------------------------------------------
Return Quarter/Year
-------------------------------------------------------------------------------------------
Highest Return 0.89% 2/2007
-------------------------------------------------------------------------------------------
Lowest Return (9.15)% 4/2007
-------------------------------------------------------------------------------------------
22 WisdomTree Trust Prospectus
Average Annual Total Returns as of December 31, 2007
-------------------------------------------------------------------------------------------
WisdomTree SmallCap Dividend Fund 1 Year Since Inception(1)
-------------------------------------------------------------------------------------------
Return before taxes (12.50)% 1.22%
-------------------------------------------------------------------------------------------
Return after taxes on distributions (2) (13.55)% 0.01%
-------------------------------------------------------------------------------------------
Return after taxes on distributions and sale of Fund shares (8.07)% 0.40%
-------------------------------------------------------------------------------------------
Russell 2000 Index(3)
(reflects no deduction for fees, expenses or taxes) (1.56)% 8.04%
-------------------------------------------------------------------------------------------
WisdomTree SmallCap Dividend Index
(reflects no deduction for fees, expenses or taxes) (14.29)% (0.14)%
-------------------------------------------------------------------------------------------
(1) The Fund commenced operations on June 16, 2006.
(2) After-tax returns are calculated using the highest historical individual
federal marginal income tax rates and do not reflect the impact of state
and local taxes. Actual after-tax returns depend on your tax situation and
may differ from those shown and are not relevant if you hold your shares
through tax-deferred arrangements, such as 401(k) plans or individual
retirement accounts. In some cases the return after taxes may exceed the
return before taxes due to an assumed tax benefit from any losses on a
sale of Fund shares at the end of the measurement period.
(3) The Russell 2000 Index measures performance of the smallest 2,000
securities in the Russell 3000 Index.
Fees and Expenses
The following table describes the fees and expenses you may pay if you buy and
hold shares of the Fund. The fees are expressed as a percentage of the Fund's
average net assets. You may also incur customary brokerage charges when buying
or selling Fund shares.
-------------------------------------------------------------------------------------------
Shareholder Fees None
(fees paid directly from your investment, but see the Creation Transaction Fees
and Redemption Transaction Fees section below)
-------------------------------------------------------------------------------------------
Annual Fund Operating Expenses (expenses deducted from Fund assets)
-------------------------------------------------------------------------------------------
Management Fees 0.38%
-------------------------------------------------------------------------------------------
Distribution and/or Service (12b-1) Fees None
-------------------------------------------------------------------------------------------
Other Expenses(a) 0.00%
-------------------------------------------------------------------------------------------
Total Annual Fund Operating Expenses 0.38%
-------------------------------------------------------------------------------------------
(a) WisdomTree Asset Management has agreed to pay all operating expenses of
the Fund, except interest expenses and taxes, brokerage expenses, future
distribution fees or expenses, and extraordinary expenses through July 31,
2009. WisdomTree Asset Management receives a fee of up to .0044% in
exchange for providing certain non-advisory services to the Fund.
The following example is intended to help retail investors compare the cost of
investing in the Fund with the cost of investing in other funds. It illustrates
the hypothetical expenses that such investors would incur over various periods
if they invest $10,000 in the Fund for the time periods indicated and then
redeemed all of the shares at the end of those periods. This example assumes
that the Fund provides a return of 5% a year and that operating expenses remain
the same. This example does not include the brokerage commission that retail
investors may pay to buy and sell shares of the Fund. Although your actual costs
may be higher or lower, based on these assumptions, your costs would be:
-------------------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
-------------------------------------------------------------------------------------------
$39 $122 $213 $480
-------------------------------------------------------------------------------------------
You would pay the following expenses if you did not redeem your shares:
-------------------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
-------------------------------------------------------------------------------------------
$39 $122 $213 $480
-------------------------------------------------------------------------------------------
WisdomTree Trust Prospectus 23
--------------------------------------------------------------------------------
WisdomTree International Dividend Funds
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
WisdomTree DEFA Fund
Fund Facts
--------------------------------------------------------------------------------
Cusip Number:
97717W703
Exchange Trading Symbol:
DWM
--------------------------------------------------------------------------------
WisdomTree DEFA Fund
Investment Objective
The Fund seeks to track the price and yield performance, before fees and
expenses, of the WisdomTree Dividend Index of Europe, Far East Asia and
Australasia (the "WisdomTree DEFA Index"). Since the Fund's investment objective
has been adopted as a non-fundamental investment policy, the Fund's investment
objective may be changed without a vote of shareholders.
Primary Investment Strategies
The Fund employs a "passive management" - or indexing - investment approach
designed to track the performance of the WisdomTree DEFA Index. The Fund
attempts to invest all, or substantially all, of its assets in the stocks that
make up the Index. The Fund generally uses a Representative Sampling strategy to
achieve its investment objective.
Index Description
The WisdomTree DEFA Index measures the performance of companies in developed
markets outside of the U.S. and Canada that pay regular cash dividends on shares
of common stock and that meet specified requirements as of the Index measurement
date. To be included in the WisdomTree DEFA Index, companies must be
incorporated in one of 16 developed-market European countries represented by the
WisdomTree Europe Dividend Index, Japan, Hong Kong, Singapore, Australia, or New
Zealand, and must be listed on a major securities exchange in one of those
countries. Companies must have paid at least $5 million in cash dividends on
their common stock in the annual cycle prior to the most recent Index
measurement date and must also satisfy specified liquidity and other
requirements. Companies are weighted in the Index based on regular cash
dividends paid. The Index includes large-capitalization, mid-capitalization and
small-capitalization securities that meet the Index requirements. As of June 30,
2008, approximately 77% of the capitalization of the Index consisted of
companies with market capitalizations over $10.0 billion.
Primary Investment Risks
You can lose money on your investment in the Fund. For information about the
risks of investing in the Fund, see the sections herein entitled "Principal Risk
Factors Common to All Funds" and "Principal Risk Factors Common to the
International Dividend Funds." In addition, the Fund is subject to the following
potential risk. As with all potential risks, this could decrease the value of
your Fund investment.
24 WisdomTree Trust Prospectus
o Geographic Concentration Risk. To the extent the Fund invests a
significant portion of its assets in the securities of a single country or
region it is more likely to be impacted by events or conditions affecting
that country or region. For example, political and economic conditions and
changes in regulatory, tax, or economic policy in a country could
significantly affect the market in that country and in surrounding or
related countries and have a negative impact on a Fund's performance. The
Fund generally invests a relatively large percentage of its assets in
companies organized in the United Kingdom.
Performance Information
The bar chart that follows shows the annual total returns of the Fund for each
full calendar year since the Fund commenced operations. The table that follows
the bar chart shows the Fund's average annual total returns, both before and
after taxes. The bar chart and table provide an indication of the risks of
investing in the Fund by showing the Fund's performance for calendar year 2007
and showing how the Fund's average annual returns compared with its underlying
index and another measure of market performance. All returns assume reinvestment
of dividends and distributions. The Fund's past performance (before and after
taxes) is not necessarily an indication of how the Fund will perform in the
future.
[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
2007
------
Total Return 15.06%
The Fund's year-to-date total return as of June 30, 2008 was (13.34)%.
Best and Worst Quarter Returns (for the period reflected in the bar chart above)
-------------------------------------------------------------------------------------------
Return Quarter/Year
-------------------------------------------------------------------------------------------
Highest Return 7.89% 2/2007
-------------------------------------------------------------------------------------------
Lowest Return (0.24)% 4/2007
-------------------------------------------------------------------------------------------
Average Annual Total Returns as of December 31, 2007
-------------------------------------------------------------------------------------------
WisdomTree DEFA Fund 1 Year Since Inception(1)
-------------------------------------------------------------------------------------------
Return before taxes 15.06% 25.70%
-------------------------------------------------------------------------------------------
Return after taxes on distributions(2) 14.53% 25.21%
-------------------------------------------------------------------------------------------
Return after taxes on distributions and sale of Fund shares 9.78% 21.74%
-------------------------------------------------------------------------------------------
MSCI EAFE Index(3)
(reflects no deduction for fees, expenses or taxes) 11.11% 20.87%
-------------------------------------------------------------------------------------------
WisdomTree DEFA Index
(reflects no deduction for fees, expenses or taxes) 14.30% 25.46%
-------------------------------------------------------------------------------------------
(1) The Fund commenced operations on June 16, 2006.
(2) After-tax returns are calculated using the highest historical individual
federal marginal income tax rates and do not reflect the impact of state
and local taxes. Actual after-tax returns depend on your tax situation and
may differ from those shown and are not relevant if you hold your shares
through tax-deferred arrangements, such as 401(k) plans or individual
retirement accounts. In some cases the return after taxes may exceed the
return before taxes due to an assumed tax benefit from any losses on a
sale of Fund shares at the end of the measurement period.
(3) The MSCI EAFE Index is a market cap-weighted index composed of companies
representative of the developed market structure of 21 developed countries
in Europe, Australasia and Japan.
WisdomTree Trust Prospectus 25
Fees and Expenses
The following table describes the fees and expenses you may pay if you buy and
hold shares of the Fund. The fees are expressed as a percentage of the Fund's
average net assets. You may also incur customary brokerage charges when buying
or selling Fund shares.
-------------------------------------------------------------------------------------------
Shareholder Fees None
(fees paid directly from your investment, but see the Creation Transaction Fees
and Redemption Transaction Fees section below)
-------------------------------------------------------------------------------------------
Annual Fund Operating Expenses (expenses deducted from Fund assets)
-------------------------------------------------------------------------------------------
Management Fees 0.48%
-------------------------------------------------------------------------------------------
Distribution and/or Service (12b-1) Fees None
-------------------------------------------------------------------------------------------
Other Expenses(a) 0.00%
-------------------------------------------------------------------------------------------
Total Annual Fund Operating Expenses 0.48%
-------------------------------------------------------------------------------------------
(a) WisdomTree Asset Management has agreed to pay all operating expenses of
the Fund, except interest expenses and taxes, brokerage expenses, future
distribution fees or expenses, and extraordinary expenses through July 31,
2009. WisdomTree Asset Management receives a fee of up to .0044% in
exchange for providing certain non-advisory services to the Fund.
The following example is intended to help retail investors compare the cost of
investing in the Fund with the cost of investing in other funds. It illustrates
the hypothetical expenses that such investors would incur over various periods
if they invest $10,000 in the Fund for the time periods indicated and then
redeemed all of the shares at the end of those periods. This example assumes
that the Fund provides a return of 5% a year and that operating expenses remain
the same. This example does not include the brokerage commission that retail
investors may pay to buy and sell shares of the Fund. Although your actual costs
may be higher or lower, based on these assumptions, your costs would be:
-------------------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
-------------------------------------------------------------------------------------------
$49 $154 $269 $604
-------------------------------------------------------------------------------------------
You would pay the following expenses if you did not redeem your shares:
-------------------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
-------------------------------------------------------------------------------------------
$49 $154 $269 $604
-------------------------------------------------------------------------------------------
26 WisdomTree Trust Prospectus
--------------------------------------------------------------------------------
WisdomTree International Dividend Funds
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
WisdomTree DEFA
High-Yielding Equity Fund
Fund Facts
--------------------------------------------------------------------------------
Cusip Number:
97717W802
Exchange Trading Symbol:
DTH
--------------------------------------------------------------------------------
WisdomTree DEFA High-Yielding Equity Fund
Investment Objective
The Fund seeks to track the price and yield performance, before fees and
expenses, of the WisdomTree DEFA High-Yielding Equity Index. Since the Fund's
investment objective has been adopted as a non-fundamental investment policy,
the Fund's investment objective may be changed without a vote of shareholders.
Primary Investment Strategies
The Fund employs a "passive management" - or indexing - investment approach
designed to track the performance of the WisdomTree DEFA Index. The Fund
attempts to invest all, or substantially all, of its assets in the stocks that
make up the Index. The Fund generally uses a Representative Sampling strategy to
achieve its investment objective.
Index Description
The WisdomTree DEFA High-Yielding Equity Index measures the performance of the
highest dividend yielding stocks within the WisdomTree DEFA Index that meet
specified requirements as of the Index measurement date. The Index is created by
selecting from the WisdomTree DEFA Index those companies with market
capitalizations of at least $200 million and average daily dollar trading
volumes of at least $200,000 for the three months prior to the Index measurement
date. The top 30% of these companies ranked by dividend yield are included in
the Index. Companies are weighted in the Index based on regular cash dividends
paid. The Index includes large-capitalization, mid-capitalization and
small-capitalization securities. In this sense, it is a dividend-weighted,
multi-cap index for the high-yielding dividend segment of the industrialized
world outside of the U.S. and Canada. As of June 30, 2008, approximately 80% of
the capitalization of the Index consisted of companies with market
capitalizations over $10.0 billion.
Primary Investment Risks
You can lose money on your investment in the Fund. For information about the
risks of investing in the Fund, see the sections herein entitled "Principal Risk
Factors Common to All Funds" and "Principal Risk Factors Common to the
International Dividend Funds." In addition, the Fund is subject to the following
potential risk. As with all potential risks, this could decrease the value of
your Fund investment.
WisdomTree Trust Prospectus 27
o Geographic Concentration Risk. To the extent the Fund invests a
significant portion of its assets in the securities of a single country or
region it is more likely to be impacted by events or conditions affecting
that country or region. For example, political and economic conditions and
changes in regulatory, tax, or economic policy in a country could
significantly affect the market in that country and in surrounding or
related countries and have a negative impact on a Fund's performance. The
Fund generally invests a relatively large percentage of its assets in
companies organized in France and the United Kingdom.
Performance Information
The bar chart that follows shows the annual total returns of the Fund for each
full calendar year since the Fund commenced operations. The table that follows
the bar chart shows the Fund's average annual total returns, both before and
after taxes. The bar chart and table provide an indication of the risks of
investing in the Fund by showing the Fund's performance for calendar year 2007
and showing how the Fund's average annual returns compared with its underlying
index and another measure of market performance. All returns assume reinvestment
of dividends and distributions. The Fund's past performance (before and after
taxes) is not necessarily an indication of how the Fund will perform in the
future.
[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
2007
------
Total Return 11.33%
The Fund's year-to-date total return as of June 30, 2008 was (14.64)%.
Best and Worst Quarter Returns (for the period reflected in the bar chart above)
------------------------------------------------------------------------------------------
Return Quarter/Year
------------------------------------------------------------------------------------------
Highest Return 7.31% 2/2007
------------------------------------------------------------------------------------------
Lowest Return (0.92)% 4/2007
------------------------------------------------------------------------------------------
Average Annual Total Returns as of December 31, 2007
------------------------------------------------------------------------------------------
WisdomTree DEFA High-Yielding Equity Fund 1 Year Since Inception(1)
------------------------------------------------------------------------------------------
Return before taxes 11.33% 23.41%
------------------------------------------------------------------------------------------
Return after taxes on distributions(2) 10.20% 22.47%
------------------------------------------------------------------------------------------
Return after taxes on distributions and sale of Fund shares 7.35% 19.50%
------------------------------------------------------------------------------------------
MSCI EAFE Value Index(3)
(reflects no deduction for fees, expenses or taxes) 5.92% 18.73%
------------------------------------------------------------------------------------------
WisdomTree DEFA High-Yielding Equity Index
(reflects no deduction for fees, expenses or taxes) 12.95% 25.40%
------------------------------------------------------------------------------------------
(1) The Fund commenced operations on June 16, 2006.
(2) After-tax returns are calculated using the highest historical individual
federal marginal income tax rates and do not reflect the impact of state
and local taxes. Actual after-tax returns depend on your tax situation and
may differ from those shown and are not relevant if you hold your shares
through tax-deferred arrangements, such as 401(k) plans or individual
retirement accounts. In some cases the return after taxes may exceed the
return before taxes due to an assumed tax benefit from any losses on a
sale of Fund shares at the end of the measurement period.
(3) The MSCI EAFE Value Index measures the performance of value stocks in the
MSCI EAFE Index.
28 WisdomTree Trust Prospectus
Fees and Expenses
The following table describes the fees and expenses you may pay if you buy and
hold shares of the Fund. The fees are expressed as a percentage of the Fund's
average net assets. You may also incur customary brokerage charges when buying
or selling Fund shares.
----------------------------------------------------------------------------------------
Shareholder Fees None
(fees paid directly from your investment, but see the Creation Transaction Fees
and Redemption Transaction Fees section below)
----------------------------------------------------------------------------------------
Annual Fund Operating Expenses (expenses deducted from Fund assets)
----------------------------------------------------------------------------------------
Management Fees 0.58%
----------------------------------------------------------------------------------------
Distribution and/or Service (12b-1) Fees None
----------------------------------------------------------------------------------------
Other Expenses(a) 0.00%
----------------------------------------------------------------------------------------
Total Annual Fund Operating Expenses 0.58%
----------------------------------------------------------------------------------------
(a) WisdomTree Asset Management has agreed to pay all operating expenses of
the Fund, except interest expenses and taxes, brokerage expenses, future
distribution fees or expenses, and extraordinary expenses through July 31,
2009. WisdomTree Asset Management receives a fee of up to .0044% in
exchange for providing certain non-advisory services to the Fund.
The following example is intended to help retail investors compare the cost of
investing in the Fund with the cost of investing in other funds. It illustrates
the hypothetical expenses that such investors would incur over various periods
if they invest $10,000 in the Fund for the time periods indicated and then
redeemed all of the shares at the end of those periods. This example assumes
that the Fund provides a return of 5% a year and that operating expenses remain
the same. This example does not include the brokerage commission that retail
investors may pay to buy and sell shares of the Fund. Although your actual costs
may be higher or lower, based on these assumptions, your costs would be:
----------------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
----------------------------------------------------------------------------------------
$59 $186 $324 $726
----------------------------------------------------------------------------------------
You would pay the following expenses if you did not redeem your shares:
----------------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
----------------------------------------------------------------------------------------
$59 $186 $324 $726
----------------------------------------------------------------------------------------
WisdomTree Trust Prospectus 29
--------------------------------------------------------------------------------
WisdomTree International Dividend Funds
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
WisdomTree Europe
Total Dividend Fund
Fund Facts
--------------------------------------------------------------------------------
Cusip Number:
97717W885
Exchange Trading Symbol:
DEB
--------------------------------------------------------------------------------
WisdomTree Europe Total Dividend Fund
Investment Objective
The Fund seeks to track the price and yield performance, before fees and
expenses, of the WisdomTree Europe Dividend Index. Since the Fund's investment
objective has been adopted as a non-fundamental investment policy, the Fund's
investment objective may be changed without a vote of shareholders.
Primary Investment Strategies
The Fund employs a "passive management" - or indexing - investment approach
designed to track the performance of the WisdomTree Europe Dividend Index. The
Fund attempts to invest all, or substantially all, of its assets in the stocks
that make up the underlying Index. The Fund generally uses a Representative
Sampling strategy to achieve its investment objective.
Index Description
The WisdomTree Europe Dividend Index measures the performance of companies
incorporated in 16 developed-market European countries that pay regular cash
dividends on shares of common stock and meet specified requirements as of the
Index measurement date. The Index is comprised of companies that are
incorporated in and have their shares of common stock listed on a major stock
exchange in one of the following countries: Austria, Belgium, Denmark, Finland,
France, Germany, Greece, Ireland, Italy, Netherlands, Norway, Portugal, Spain,
Sweden, Switzerland, or the United Kingdom ("Europe"). Companies must have paid
at least $5 million in cash dividends on shares of their common stock in the
annual cycle prior to the most recent Index measurement date and must also
satisfy specified liquidity and other requirements. Companies are weighted in
the Index based on regular cash dividends paid. The Index includes
large-capitalization, mid-capitalization and small-capitalization securities. In
this sense, it is a dividend-weighted total market index for the dividend-paying
segment of developed-market Europe. As of June 30, 2008, approximately 82% of
the capitalization of the Index consisted of companies with market
capitalizations over $10.0 billion.
Primary Investment Risks
You can lose money on your investment in the Fund. For information about the
risks of investing in the Fund, see the sections herein entitled "Principal Risk
Factors Common to All Funds" and "Principal Risk Factors Common to the
International Dividend Funds." In addition, the Fund is subject to the following
potential risk. As with all potential risks, this could decrease the value of
your Fund investment.
30 WisdomTree Trust Prospectus
o Geographic Concentration Risk. To the extent the Fund invests a
significant portion of its assets in the securities of a single country or
region it is more likely to be impacted by events or conditions affecting
that country or region. For example, political and economic conditions and
changes in regulatory, tax, or economic policy in a country could
significantly affect the market in that country and in surrounding or
related countries. Most developed countries in Western Europe are members
of the European Union (EU), and many are also members of the European
Monetary Union (EMU), which requires compliance with restrictions on
inflation rates, deficits, and debt levels. Unemployment in certain
European nations is historically high. In addition, the tight fiscal and
monetary controls necessary to join the EMU can significantly affect every
country in Europe. The Fund generally invests a relatively large
percentage of its assets in companies organized in France and the United
Kingdom.
Performance Information
The bar chart that follows shows the annual total returns of the Fund for each
full calendar year since the Fund commenced operations. The table that follows
the bar chart shows the Fund's average annual total returns, both before and
after taxes. The bar chart and table provide an indication of the risks of
investing in the Fund by showing the Fund's performance for calendar year 2007
and showing how the Fund's average annual returns compared with its underlying
index and another measure of market performance. All returns assume reinvestment
of dividends and distributions. The Fund's past performance (before and after
taxes) is not necessarily an indication of how the Fund will perform in the
future.
[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
2007
------
Total Return 12.88%
The Fund's year-to-date total return as of June 30, 2008 was (14.09)%.
Best and Worst Quarter Returns (for the period reflected in the bar chart above)
------------------------------------------------------------------------------------------
Return Quarter/Year
------------------------------------------------------------------------------------------
Highest Return 8.41% 2/2007
------------------------------------------------------------------------------------------
Lowest Return (0.04)% 4/2007
------------------------------------------------------------------------------------------
Average Annual Total Returns as of December 31, 2007
------------------------------------------------------------------------------------------
WisdomTree Europe Total Dividend Fund 1 Year Since Inception(1)
------------------------------------------------------------------------------------------
Return before taxes 12.88% 24.25%
------------------------------------------------------------------------------------------
Return after taxes on distributions(2) 12.03% 23.54%
------------------------------------------------------------------------------------------
Return after taxes on distributions and sale of Fund shares 8.36% 20.36%
------------------------------------------------------------------------------------------
MSCI Europe Index(3)
(reflects no deduction for fees, expenses or taxes) 13.78% 25.23%
------------------------------------------------------------------------------------------
WisdomTree Europe Total Dividend Index
(reflects no deduction for fees, expenses or taxes) 13.66% 25.77%
------------------------------------------------------------------------------------------
(1) The Fund commenced operations on June 16, 2006.
(2) After-tax returns are calculated using the highest historical individual
federal marginal income tax rates and do not reflect the impact of state
and local taxes. Actual after-tax returns depend on your tax situation and
may differ from those shown and are not relevant if you hold your shares
through tax-deferred arrangements, such as 401(k) plans or individual
retirement accounts. In some cases the return after taxes may exceed the
return before taxes due to an assumed tax benefit from any losses on a
sale of Fund shares at the end of the measurement period.
(3) The MSCI Europe Index is a subset of the MSCI EAFE Index and measures the
developed market equity performance of Western Europe.
WisdomTree Trust Prospectus 31
Fees and Expenses
The following table describes the fees and expenses you may pay if you buy and
hold shares of the Fund. The fees are expressed as a percentage of the Fund's
average net assets. You may also incur customary brokerage charges when buying
or selling Fund shares.
----------------------------------------------------------------------------------------
Shareholder Fees None
(fees paid directly from your investment, but see the Creation Transaction Fees
and Redemption Transaction Fees section below)
----------------------------------------------------------------------------------------
Annual Fund Operating Expenses (expenses deducted from Fund assets)
----------------------------------------------------------------------------------------
Management Fees 0.48%
----------------------------------------------------------------------------------------
Distribution and/or Service (12b-1) Fees None
----------------------------------------------------------------------------------------
Other Expenses(a) 0.00%
----------------------------------------------------------------------------------------
Total Annual Fund Operating Expenses 0.48%
----------------------------------------------------------------------------------------
(a) WisdomTree Asset Management has agreed to pay all operating expenses of
the Fund, except interest expenses and taxes, brokerage expenses, future
distribution fees or expenses, and extraordinary expenses through July 31,
2009. WisdomTree Asset Management receives a fee of up to .0044% in
exchange for providing certain non-advisory services to the Fund.
The following example is intended to help retail investors compare the cost of
investing in the Fund with the cost of investing in other funds. It illustrates
the hypothetical expenses that such investors would incur over various periods
if they invest $10,000 in the Fund for the time periods indicated and then
redeemed all of the shares at the end of those periods. This example assumes
that the Fund provides a return of 5% a year and that operating expenses remain
the same. This example does not include the brokerage commission that retail
investors may pay to buy and sell shares of the Fund. Although your actual costs
may be higher or lower, based on these assumptions, your costs would be:
----------------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
----------------------------------------------------------------------------------------
$49 $154 $269 $604
----------------------------------------------------------------------------------------
You would pay the following expenses if you did not redeem your shares:
----------------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
----------------------------------------------------------------------------------------
$49 $154 $269 $604
----------------------------------------------------------------------------------------
32 WisdomTree Trust Prospectus
--------------------------------------------------------------------------------
WisdomTree International Dividend Funds
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
WisdomTree Europe
High-Yielding Equity Fund
Fund Facts
--------------------------------------------------------------------------------
Cusip Number:
97717W877
Exchange Trading Symbol:
DEW
--------------------------------------------------------------------------------
WisdomTree Europe High-Yielding Equity Fund
Investment Objective
The Fund seeks to track the price and yield performance, before fees and
expenses, of the WisdomTree Europe High-Yielding Equity Index. Since the Fund's
investment objective has been adopted as a non-fundamental investment policy,
the Fund's investment objective may be changed without a vote of shareholders.
Primary Investment Strategies
The Fund employs a "passive management" - or indexing - investment approach
designed to track the performance of the WisdomTree Europe High-Yielding Equity
Index. The Fund attempts to invest all, or substantially all, of its assets in
the stocks that make up the Index. The Fund generally uses a Representative
Sampling strategy to achieve its investment objective.
Index Description
The WisdomTree Europe High-Yielding Equity Index measures the performance of the
highest dividend yielding stocks within the WisdomTree Europe Dividend Index
that meet specified requirements as of the Index measurement date. The Index is
created by selecting from the WisdomTree Europe Dividend Index those companies
with market capitalizations of at least $200 million and average daily dollar
trading volumes of at least $200,000 for the three months prior to the Index
measurement date. The top 30% of these companies ranked by dividend yield are
included in the Index. Companies are weighted in the Index based on regular cash
dividends paid. The Index includes large-capitalization, mid-capitalization and
small-capitalization stocks. In this sense, it is a dividend-weighted,
multi-capitalization index for the high-yielding segment of developed-market
Europe. As of June 30, 2008, approximately 83% of the capitalization of the
Index consisted of companies with market capitalizations over $10.0 billion.
Primary Investment Risks
You can lose money on your investment in the Fund. For information about the
risks of investing in the Fund, see the sections herein entitled "Principal Risk
Factors Common to All Funds" and "Principal Risk Factors Common to the
International Dividend Funds." In addition, the Fund is subject to the following
potential risk. As with all potential risks, this could decrease the value of
your Fund investment.
WisdomTree Trust Prospectus 33
o Geographic Concentration Risk. To the extent the Fund invests a
significant portion of its assets in the securities of a single country or
region, it is more likely to be impacted by events or conditions affecting
that country or region. For example, political and economic conditions and
changes in regulatory, tax, or economic policy in a country could
significantly affect the market in that country and in surrounding or
related countries. Most developed countries in Western Europe are members
of the European Union (EU), and many are also members of the European
Monetary Union (EMU), which requires compliance with restrictions on
inflation rates, deficits, and debt levels. Unemployment in certain
European nations is historically high. In addition, the tight fiscal and
monetary controls necessary to join the EMU can significantly affect every
country in Europe. The Fund generally invests a relatively large
percentage of its assets in companies organized in France, Italy and the
United Kingdom.
Performance Information
The bar chart that follows shows the annual total returns of the Fund for each
full calendar year since the Fund commenced operations. The table that follows
the bar chart shows the Fund's average annual total returns, both before and
after taxes. The bar chart and table provide an indication of the risks of
investing in the Fund by showing the Fund's performance for calendar year 2007
and showing how the Fund's average annual returns compared with its underlying
index and another measure of market performance. All returns assume reinvestment
of dividends and distributions. The Fund's past performance (before and after
taxes) is not necessarily an indication of how the Fund will perform in the
future.
[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
2007
------
Total Return 8.91%
The Fund's year-to-date total return as of June 30, 2008 was (15.52)%.
Best and Worst Quarter Returns (for the period reflected in the bar chart above)
------------------------------------------------------------------------------------------
Return Quarter/Year
------------------------------------------------------------------------------------------
Highest Return 7.68% 2/2007
------------------------------------------------------------------------------------------
Lowest Return (1.37)% 4/2007
------------------------------------------------------------------------------------------
34 WisdomTree Trust Prospectus
Average Annual Total Returns as of December 31, 2007
------------------------------------------------------------------------------------------
WisdomTree Europe High-Yielding Equity Fund 1 Year Since Inception(1)
------------------------------------------------------------------------------------------
Return before taxes 8.91% 21.68%
------------------------------------------------------------------------------------------
Return after taxes on distributions(2) 7.74% 20.68%
------------------------------------------------------------------------------------------
Return after taxes on distributions and sale of Fund shares 5.78% 17.97%
------------------------------------------------------------------------------------------
MSCI Europe Value Index(3)
(reflects no deduction for fees, expenses or taxes) 8.19% 22.37%
------------------------------------------------------------------------------------------
WisdomTree Europe High-Yielding Equity Index
(reflects no deduction for fees, expenses or taxes) 9.29% 22.62%
------------------------------------------------------------------------------------------
(1) The Fund commenced operations on June 16, 2006.
(2) After-tax returns are calculated using the highest historical individual
federal marginal income tax rates and do not reflect the impact of state
and local taxes. Actual after-tax returns depend on your tax situation and
may differ from those shown and are not relevant if you hold your shares
through tax-deferred arrangements, such as 401(k) plans or individual
retirement accounts. In some cases the return after taxes may exceed the
return before taxes due to an assumed tax benefit from any losses on a
sale of Fund shares at the end of the measurement period.
(3) The MSCI Europe Value Index measures the performance of value stocks in
the MSCI Europe Index.
Fees and Expenses
The following table describes the fees and expenses you may pay if you buy and
hold shares of the Fund. The fees are expressed as a percentage of the Fund's
average net assets. You may also incur customary brokerage charges when buying
or selling Fund shares.
----------------------------------------------------------------------------------------
Shareholder Fees None
(fees paid directly from your investment, but see the Creation Transaction Fees
and Redemption Transaction Fees section below)
----------------------------------------------------------------------------------------
Annual Fund Operating Expenses (expenses deducted from Fund assets)
----------------------------------------------------------------------------------------
Management Fees 0.58%
----------------------------------------------------------------------------------------
Distribution and/or Service (12b-1) Fees None
----------------------------------------------------------------------------------------
Other Expenses(a) 0.00%
----------------------------------------------------------------------------------------
Total Annual Fund Operating Expenses 0.58%
----------------------------------------------------------------------------------------
(a) WisdomTree Asset Management has agreed to pay all operating expenses of
the Fund, except interest expenses and taxes, brokerage expenses, future
distribution fees or expenses, and extraordinary expenses through July 31,
2009. WisdomTree Asset Management receives a fee of up to .0044% in
exchange for providing certain non-advisory services to the Fund.
The following example is intended to help retail investors compare the cost of
investing in the Fund with the cost of investing in other funds. It illustrates
the hypothetical expenses that such investors would incur over various periods
if they invest $10,000 in the Fund for the time periods indicated and then
redeemed all of the shares at the end of those periods. This example assumes
that the Fund provides a return of 5% a year and that operating expenses remain
the same. This example does not include the brokerage commission that retail
investors may pay to buy and sell shares of the Fund. Although your actual costs
may be higher or lower, based on these assumptions, your costs would be:
----------------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
----------------------------------------------------------------------------------------
$59 $186 $324 $726
----------------------------------------------------------------------------------------
You would pay the following expenses if you did not redeem your shares:
----------------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
----------------------------------------------------------------------------------------
$59 $186 $324 $726
----------------------------------------------------------------------------------------
WisdomTree Trust Prospectus 35
--------------------------------------------------------------------------------
WisdomTree International Dividend Funds
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
WisdomTree Europe
SmallCap Dividend Fund
Fund Facts
--------------------------------------------------------------------------------
Cusip Number:
97717W869
Exchange Trading Symbol:
DFE
--------------------------------------------------------------------------------
WisdomTree Europe SmallCap Dividend Fund
Investment Objective
The Fund seeks to track the price and yield performance, before fees and
expenses, of the WisdomTree Europe SmallCap Dividend Index. Since the Fund's
investment objective has been adopted as a non-fundamental investment policy,
the Fund's investment objective may be changed without a vote of shareholders.
Primary Investment Strategies
The Fund employs a "passive management" - or indexing - investment approach
designed to track the performance of the WisdomTree Europe SmallCap Dividend
Index. The Fund attempts to invest all, or substantially all, of its assets in
the stocks that make up the Index. The Fund generally uses a Representative
Sampling strategy to achieve its investment objective.
Index Description
The WisdomTree Europe SmallCap Dividend Index measures the performance of
small-capitalization companies incorporated in Western Europe that pay regular
cash dividends on shares of common stock and meet specified requirements as of
the Index measurement date. The Index is created by first removing from the
WisdomTree Europe Dividend Index the 300 companies with the highest market
capitalizations as of the Index measurement date. Those companies that comprise
the bottom 25% of the remaining market capitalization of this group are included
in the WisdomTree Europe SmallCap Dividend Index. Companies are weighted in the
Index based on regular cash dividends paid. The Index includes primarily
small-capitalization securities. In this sense, it is a dividend-weighted
small-cap index for the dividend-paying segment of Western Europe. As of June
30, 2008, approximately 96% of the capitalization of the Index consisted of
companies with market capitalizations less than $2.0 billion.
Primary Investment Risks
You can lose money on your investment in the Fund. For information about the
risks of investing in the Fund, see the sections herein entitled "Principal Risk
Factors Common to All Funds" and "Principal Risk Factors Common to the
International Dividend Funds." In addition, the Fund is subject to the following
potential risks. As with all potential risks, this could decrease the value of
your Fund investment.
o Geographic Concentration Risk. To the extent the Fund invests a
significant portion of its assets in the securities of a single country or
region it is more likely to be impacted by events or conditions affecting
that country or region. For example, political and economic conditions and
changes in regulatory, tax, or economic policy in a country could
significantly affect the market in that country and in surrounding or
related countries. Most developed countries in Western Europe are members
of the European Union (EU), and many are also members of the European
Monetary
36 WisdomTree Trust Prospectus
Union (EMU), which requires compliance with restrictions on inflation
rates, deficits, and debt levels. Unemployment in certain European nations
is historically high. In addition, the tight fiscal and monetary controls
necessary to join the EMU can significantly affect every country in
Europe. The Fund generally invests a relatively large percentage of its
assets in companies organized in the United Kingdom.
o Small-Capitalization Investing. The Fund invests primarily in securities
of small-capitalization companies. As a result, the Fund may be more
volatile than funds that invest in larger, more established companies. The
securities of small-capitalization companies generally trade in lower
volumes and are subject to greater and more unpredictable price changes
than larger capitalization stocks or the stock market as a whole.
Small-capitalization companies may be particularly sensitive to changes in
interest rates, borrowing costs and earnings.
o Industrial Sector Investing. The Fund generally invests a relatively large
percentage of its assets in the industrial sector. The industrial sector
can be significantly affected by, among other things, capital spending
levels, economic cycles, technical obsolescence, labor relations,
government regulations, commodity prices and currency exchange rates.
o Consumer Discretionary Investing. The Fund generally invests a relatively
large percentage of its assets in the consumer discretionary sector. This
sector consists of, for example, automobile, media and retail companies.
The consumer discretionary sector of the economy can be significantly
affected by the performance of the overall economy, interest rates,
competition, consumer confidence and spending, and changes in demographics
and consumer tastes.
Performance Information
The bar chart that follows shows the annual total returns of the Fund for each
full calendar year since the Fund commenced operations. The table that follows
the bar chart shows the Fund's average annual total returns, both before and
after taxes. The bar chart and table provide an indication of the risks of
investing in the Fund by showing the Fund's performance for calendar year 2007
and showing how the Fund's average annual returns compared with its underlying
index and another measure of market performance. All returns assume reinvestment
of dividends and distributions. The Fund's past performance (before and after
taxes) is not necessarily an indication of how the Fund will perform in the
future.
[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
2007
-------
Total Return (0.13)%
The Fund's year-to-date total return as of June 30, 2008 was (15.50)%.
Best and Worst Quarter Returns (for the period reflected in the bar chart above)
--------------------------------------------------------------------------------------------
Return Quarter/Year
--------------------------------------------------------------------------------------------
Highest Return 7.76% 1/2007
--------------------------------------------------------------------------------------------
Lowest Return (6.87)% 4/2007
--------------------------------------------------------------------------------------------
WisdomTree Trust Prospectus 37
Average Annual Total Returns as of December 31, 2007
--------------------------------------------------------------------------------------------
WisdomTree Europe SmallCap Dividend Fund 1 Year Since Inception (1)
--------------------------------------------------------------------------------------------
Return before taxes (0.13)% 18.47%
--------------------------------------------------------------------------------------------
Return after taxes on distributions(2) (2.45)% 16.49%
--------------------------------------------------------------------------------------------
Return after taxes on distributions and sale of Fund shares (0.12)% 14.63%
--------------------------------------------------------------------------------------------
MSCI Europe Small Cap Index(3)
(reflects no deduction for fees, expenses or taxes) 2.53% 19.22%
--------------------------------------------------------------------------------------------
WisdomTree Europe SmallCap Dividend Index
(reflects no deduction for fees, expenses or taxes) (0.57)% 18.75%
--------------------------------------------------------------------------------------------
(1) The Fund commenced operations on June 16, 2006.
(2) After-tax returns are calculated using the highest historical individual
federal marginal income tax rates and do not reflect the impact of state
and local taxes. Actual after-tax returns depend on your tax situation and
may differ from those shown and are not relevant if you hold your shares
through tax-deferred arrangements, such as 401(k) plans or individual
retirement accounts. In some cases the return after taxes may exceed the
return before taxes due to an assumed tax benefit from any losses on a
sale of Fund shares at the end of the measurement period.
(3) The MSCI Europe Small Cap Index measures the performance of small cap
stocks in the MSCI Europe Index.
Fees and Expenses
The following table describes the fees and expenses you may pay if you buy and
hold shares of the Fund. The fees are expressed as a percentage of the Fund's
average net assets. You may also incur customary brokerage charges when buying
or selling Fund shares.
--------------------------------------------------------------------------------------------
Shareholder Fees None
(fees paid directly from your investment, but see the Creation Transaction Fees
and Redemption Transaction Fees section below)
--------------------------------------------------------------------------------------------
Annual Fund Operating Expenses (expenses deducted from Fund assets)
--------------------------------------------------------------------------------------------
Management Fees 0.58%
--------------------------------------------------------------------------------------------
Distribution and/or Service (12b-1) Fees None
--------------------------------------------------------------------------------------------
Other Expenses(a) 0.00%
--------------------------------------------------------------------------------------------
Total Annual Fund Operating Expenses 0.58%
--------------------------------------------------------------------------------------------
(a) WisdomTree Asset Management has agreed to pay all operating expenses of
the Fund, except interest expenses and taxes, brokerage expenses, future
distribution fees or expenses, and extraordinary expenses through July 31,
2009. WisdomTree Asset Management receives a fee of up to .0044% in
exchange for providing certain non-advisory services to the Fund.
The following example is intended to help retail investors compare the cost of
investing in the Fund with the cost of investing in other funds. It illustrates
the hypothetical expenses that such investors would incur over various periods
if they invest $10,000 in the Fund for the time periods indicated and then
redeemed all of the shares at the end of those periods. This example assumes
that the Fund provides a return of 5% a year and that operating expenses remain
the same. This example does not include the brokerage commission that retail
investors may pay to buy and sell shares of the Fund. Although your actual costs
may be higher or lower, based on these assumptions, your costs would be:
--------------------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
--------------------------------------------------------------------------------------------
$59 $186 $324 $726
--------------------------------------------------------------------------------------------
You would pay the following expenses if you did not redeem your shares:
--------------------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
--------------------------------------------------------------------------------------------
$59 $186 $324 $726
--------------------------------------------------------------------------------------------
38 WisdomTree Trust Prospectus
--------------------------------------------------------------------------------
WisdomTree International Dividend Funds
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
WisdomTree Japan
Total Dividend Fund
Fund Facts
--------------------------------------------------------------------------------
Cusip Number:
97717W851
Exchange Trading Symbol:
DXJ
--------------------------------------------------------------------------------
WisdomTree Japan Total Dividend Fund
Investment Objective
The Fund seeks to track the price and yield performance, before fees and
expenses, of the WisdomTree Japan Dividend Index. Since the Fund's investment
objective has been adopted as a non-fundamental investment policy, the Fund's
investment objective may be changed without a vote of shareholders.
Primary Investment Strategies
The Fund employs a "passive management" - or indexing - investment approach
designed to track the performance of the WisdomTree Japan Dividend Index. The
Fund attempts to invest all, or substantially all, of its assets in the stocks
that make up the Index. The Fund generally uses a Representative Sampling
strategy to achieve its investment objective.
Index Description
The WisdomTree Japan Dividend Index measures the performance of companies
incorporated in Japan that pay regular cash dividends on shares of common stock
and meet specified requirements as of the Index measurement date. The Index is
comprised of companies incorporated in Japan that list their shares on the Tokyo
Stock Exchange. Companies must have paid at least $5 million in cash dividends
on their common stock in the annual cycle prior to the most recent Index
measurement date and must also satisfy specified liquidity and other
requirements. Companies are weighted in the Index based on regular cash
dividends paid. The Index includes large-capitalization, mid-capitalization and
small-capitalization securities. In this sense, it is a dividend-weighted broad
market index for the dividend-paying segment of Japan. As of June 30, 2008,
approximately 61% of the capitalization of the Index consisted of companies with
market capitalizations over $10.0 billion.
Primary Investment Risks
You can lose money on your investment in the Fund. For information about the
risks of investing in the Fund, see the sections herein entitled "Principal Risk
Factors Common to All Funds" and "Principal Risk Factors Common to the
International Dividend Funds." In addition, the Fund is subject to the following
potential risks. As with all potential risks, this could decrease the value of
your Fund investment.
o Geographic Concentration Risk. To the extent the Fund invests a
significant portion of its assets in the securities of a single country it
is more likely to be impacted by events or conditions affecting that
country. For example, political and economic conditions and changes in
regulatory, tax, or economic policy in a country could significantly
affect the market in that country and in surrounding or related countries.
The Japanese economy has only recently emerged from a prolonged economic
downturn. Since the year 2000, Japan's economic growth rate has remained
relatively low. The economy is characterized by government intervention
WisdomTree Trust Prospectus 39
and protectionism, an unstable financial services sector, and relatively
high unemployment. Economic growth is heavily dependent on international
trade, government support of the financial services sector and other
troubled sectors, and consistent government policy. The United States is
Japan's largest single trading partner, but close to half of Japan's trade
is conducted with developing nations, almost all of which are in Southeast
Asia. Slowdowns in the U.S. and China could have a negative impact on
Japan. Exposure to China, in terms of both imports and exports, has been
increasing in recent years.
o Mid-Capitalization Investing. The Fund generally invests a relatively
large percentage of its assets in securities of mid-capitalization
companies. The securities of mid-capitalization companies may be more
vulnerable to adverse issuer, market, political, or economic developments
than the market as a whole or other types of securities. As a result, the
Fund may be more volatile than funds that invest in larger, more
established companies.
o Consumer Discretionary Investing. The Fund generally invests a relatively
large percentage of its assets in the consumer discretionary sector. This
sector consists of, for example, automobile, media and retail companies.
The consumer discretionary sector of the economy can be significantly
affected by the performance of the overall economy, interest rates,
competition, consumer confidence and spending, and changes in demographics
and consumer tastes.
o Industrial Sector Investing. The Fund generally invests a relatively large
percentage of its assets in the industrial sector. This sector can be
significantly affected by, among other things, capital spending levels,
economic cycles, technical obsolescence, labor relations, government
regulations, commodity prices and currency exchange rates.
Performance Information
The bar chart that follows shows the annual total returns of the Fund for each
full calendar year since the Fund commenced operations. The table that follows
the bar chart shows the Fund's average annual total returns, both before and
after taxes. The bar chart and table provide an indication of the risks of
investing in the Fund by showing the Fund's performance for calendar year 2007
and showing how the Fund's average annual returns compared with its underlying
index and another measure of market performance. All returns assume reinvestment
of dividends and distributions. The Fund's past performance (before and after
taxes) is not necessarily an indication of how the Fund will perform in the
future.
[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
2007
-------
Total Return (4.90)%
The Fund's year-to-date total return as of June 30, 2008 was (5.57)%.
Best and Worst Quarter Returns (for the period reflected in the bar chart above)
--------------------------------------------------------------------------------------------
Return Quarter/Year
--------------------------------------------------------------------------------------------
Highest Return 3.84% 1/2007
--------------------------------------------------------------------------------------------
Lowest Return (5.49)% 4/2007
--------------------------------------------------------------------------------------------
40 WisdomTree Trust Prospectus
Average Annual Total Returns as of December 31, 2007
-------------------------------------------------------------------------------------------
WisdomTree Japan Total Dividend Fund 1 Year Since Inception(1)
-------------------------------------------------------------------------------------------
Return before taxes (4.90)% 2.66%
-------------------------------------------------------------------------------------------
Return after taxes on distributions(2) (5.21)% 2.35%
-------------------------------------------------------------------------------------------
Return after taxes on distributions and sale of Fund shares (3.19)% 2.08%
-------------------------------------------------------------------------------------------
MSCI Japan Index(3)
(reflects no deduction for fees, expenses or taxes) (4.21)% 2.77%
-------------------------------------------------------------------------------------------
WisdomTree Japan Total Dividend Index
(reflects no deduction for fees, expenses or taxes) (4.31)% 2.87%
-------------------------------------------------------------------------------------------
(1) The Fund commenced operations on June 16, 2006.
(2) After-tax returns are calculated using the highest historical individual
federal marginal income tax rates and do not reflect the impact of state
and local taxes. Actual after-tax returns depend on your tax situation and
may differ from those shown and are not relevant if you hold your shares
through tax-deferred arrangements, such as 401(k) plans or individual
retirement accounts. In some cases the return after taxes may exceed the
return before taxes due to an assumed tax benefit from any losses on a
sale of Fund shares at the end of the measurement period.
(3) The MSCI Japan Index is a subset of the MSCI EAFE Index and measures the
performance of the Japanese equity market.
Fees and Expenses
The following table describes the fees and expenses you may pay if you buy and
hold shares of the Fund. The fees are expressed as a percentage of the Fund's
average net assets. You may also incur customary brokerage charges when buying
or selling Fund shares.
-------------------------------------------------------------------------------------------
Shareholder Fees None
(fees paid directly from your investment, but see the Creation Transaction Fees
and Redemption Transaction Fees section below)
-------------------------------------------------------------------------------------------
Annual Fund Operating Expenses (expenses deducted from Fund assets)
-------------------------------------------------------------------------------------------
Management Fees 0.48%
-------------------------------------------------------------------------------------------
Distribution and/or Service (12b-1) Fees None
-------------------------------------------------------------------------------------------
Other Expenses(a) 0.00%
-------------------------------------------------------------------------------------------
Total Annual Fund Operating Expenses 0.48%
-------------------------------------------------------------------------------------------
(a) WisdomTree Asset Management has agreed to pay all operating expenses of
the Fund, except interest expenses and taxes, brokerage expenses, future
distribution fees or expenses, and extraordinary expenses through July 31,
2009. WisdomTree Asset Management receives a fee of up to .0044% in
exchange for providing certain non-advisory services to the Fund.
The following example is intended to help retail investors compare the cost of
investing in the Fund with the cost of investing in other funds. It illustrates
the hypothetical expenses that such investors would incur over various periods
if they invest $10,000 in the Fund for the time periods indicated and then
redeemed all of the shares at the end of those periods. This example assumes
that the Fund provides a return of 5% a year and that operating expenses remain
the same. This example does not include the brokerage commission that retail
investors may pay to buy and sell shares of the Fund. Although your actual costs
may be higher or lower, based on these assumptions, your costs would be:
-------------------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
-------------------------------------------------------------------------------------------
$49 $154 $269 $604
-------------------------------------------------------------------------------------------
You would pay the following expenses if you did not redeem your shares:
-------------------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
-------------------------------------------------------------------------------------------
$49 $154 $269 $604
-------------------------------------------------------------------------------------------
WisdomTree Trust Prospectus 41
--------------------------------------------------------------------------------
WisdomTree International Dividend Funds
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
WisdomTree Japan
High-Yielding Equity Fund
Fund Facts
--------------------------------------------------------------------------------
Cusip Number:
97717W844
Exchange Trading Symbol:
DNL
--------------------------------------------------------------------------------
WisdomTree Japan High-Yielding Equity Fund
Investment Objective
The Fund seeks to track the price and yield performance, before fees and
expenses, of the WisdomTree Japan High-Yielding Equity Index. Since the Fund's
investment objective has been adopted as a non-fundamental investment policy,
the Fund's investment objective may be changed without a vote of shareholders.
Primary Investment Strategies
The Fund employs a "passive management" - or indexing - investment approach
designed to track the performance of the WisdomTree Japan High-Yielding Equity
Index. The Fund attempts to invest all, or substantially all, of its assets in
the stocks that make up the Index. The Fund generally uses a Representative
Sampling strategy to achieve its investment objective.
Index Description
The WisdomTree Japan High-Yielding Equity Index measures the performance of the
highest dividend yielding stocks within the WisdomTree Japan Dividend Index that
meet specified requirements as of the Index measurement date. The Index is
created by selecting from the WisdomTree Japan Dividend Index those companies
with market capitalizations of at least $200 million and average daily dollar
trading volumes of at least $200,000 for three months prior to the Index
measurement date. The top 30% of these companies ranked by dividend yield are
included in the Index. Companies are weighted in the Index based on regular cash
dividends paid. The Index includes large-capitalization, mid-capitalization and
small-capitalization stocks. In this sense, it is a dividend-weighted,
multi-capitalization index for the high-yielding dividend segment of Japan. As
of June 30, 2008, approximately 60% of the capitalization of the Index consisted
of companies with market capitalizations over $10.0 billion.
Primary Investment Risks
You can lose money on your investment in the Fund. For information about the
risks of investing in the Fund, see the sections herein entitled "Principal Risk
Factors Common to All Funds" and "Principal Risk Factors Common to the
International Dividend Funds." In addition, the Fund is subject to the following
potential risks. As with all potential risks, this could decrease the value of
your Fund investment.
o Geographic Concentration Risk. To the extent a Fund invests a significant
portion of its assets in the securities of a single country it is more
likely to be impacted by events or conditions in that country. For
example, political and economic conditions and changes in regulatory, tax,
or economic policy in a country could significantly affect the market in
that country and in surrounding or related countries. The Japanese economy
has only recently emerged from a prolonged economic downturn. Since the
year 2000, Japan's economic growth rate has remained relatively low. The
economy
42 WisdomTree Trust Prospectus
is characterized by government intervention and protectionism, an unstable
financial services sector, and relatively high unemployment. Economic
growth is heavily dependent on international trade, government support of
the financial services sector and other troubled sectors, and consistent
government policy. The United States is Japan's largest single trading
partner, but close to half of Japan's trade is conducted with developing
nations, almost all of which are in Southeast Asia. Slowdowns in the U.S.
and China could have a negative impact on Japan. Exposure to China, in
terms of both imports and exports, has been increasing in recent years.
o Consumer Discretionary Investing. The Fund generally invests a relatively
large percentage of its assets in the consumer discretionary sector. This
sector consists of, for example, automobile, retail and media companies.
The consumer discretionary sector of the economy can be significantly
affected by, among other things, economic growth, worldwide demand and
consumers' disposable income levels and propensity to spend.
o Industrial Sector Investing. The Fund generally invests a relatively large
percentage of its assets in the industrial sector. This sector can be
significantly affected by, among other things, capital spending levels,
economic cycles, technical obsolescence, labor relations, government
regulations, commodity prices and currency exchange rates.
Performance Information
The bar chart that follows shows the annual total returns of the Fund for each
full calendar year since the Fund commenced operations. The table that follows
the bar chart shows the Fund's average annual total returns, both before and
after taxes. The bar chart and table provide an indication of the risks of
investing in the Fund by showing the Fund's performance for calendar year 2007
and showing how the Fund's average annual returns compared with its underlying
index and another measure of market performance. All returns assume reinvestment
of dividends and distributions. The Fund's past performance (before and after
taxes) is not necessarily an indication of how the Fund will perform in the
future.
[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
2007
-------
Total Return (5.50)%
The Fund's year-to-date total return as of June 30, 2008 was (6.89)%.
Best and Worst Quarter Returns (for the period reflected in the bar chart above)
--------------------------------------------------------------------------------
Return Quarter/Year
--------------------------------------------------------------------------------
Highest Return 3.68% 1/2007
--------------------------------------------------------------------------------
Lowest Return (3.43)% 2/2007
--------------------------------------------------------------------------------
WisdomTree Trust Prospectus 43
Average Annual Total Returns as of December 31, 2007
-------------------------------------------------------------------------------------------
WisdomTree Japan High-Yielding Equity Fund 1 Year Since Inception(1)
-------------------------------------------------------------------------------------------
Return before taxes (5.50)% 5.53%
-------------------------------------------------------------------------------------------
Return after taxes on distributions(2) (6.12)% 4.94%
-------------------------------------------------------------------------------------------
Return after taxes on distributions and sale of Fund shares (3.59)% 4.37%
-------------------------------------------------------------------------------------------
MSCI Japan Value Index(3)
(reflects no deduction for fees, expenses or taxes) (5.37)% 4.61%
-------------------------------------------------------------------------------------------
WisdomTree Japan High-Yielding Equity Index
(reflects no deduction for fees, expenses or taxes) (5.31)% 5.86%
-------------------------------------------------------------------------------------------
(1) The Fund commenced operations on June 16, 2006.
(2) After-tax returns are calculated using the highest historical individual
federal marginal income tax rates and do not reflect the impact of state
and local taxes. Actual after-tax returns depend on your tax situation and
may differ from those shown and are not relevant if you hold your shares
through tax-deferred arrangements, such as 401(k) plans or individual
retirement accounts. In some cases the return after taxes may exceed the
return before taxes due to an assumed tax benefit from any losses on a
sale of Fund shares at the end of the measurement period.
(3) The MSCI Japan Value Index measures the performance of Value stocks in the
MSCI Japan Index.
Fees and Expenses
The following table describes the fees and expenses you may pay if you buy and
hold shares of the Fund. The fees are expressed as a percentage of the Fund's
average net assets. You may also incur customary brokerage charges when buying
or selling Fund shares.
-------------------------------------------------------------------------------------------
Shareholder Fees None
(fees paid directly from your investment, but see the Creation Transaction Fees
and Redemption Transaction Fees section below)
-------------------------------------------------------------------------------------------
Annual Fund Operating Expenses (expenses deducted from Fund assets)
-------------------------------------------------------------------------------------------
Management Fees 0.58%
-------------------------------------------------------------------------------------------
Distribution and/or Service (12b-1) Fees None
-------------------------------------------------------------------------------------------
Other Expenses(a) 0.00%
-------------------------------------------------------------------------------------------
Total Annual Fund Operating Expenses 0.58%
-------------------------------------------------------------------------------------------
(a) WisdomTree Asset Management has agreed to pay all operating expenses of
the Fund, except interest expenses and taxes, brokerage expenses, future
distribution fees or expenses, and extraordinary expenses through July 31,
2009. WisdomTree Asset Management receives a fee of up to .0044% in
exchange for providing certain non-advisory services to the Fund.
The following example is intended to help retail investors compare the cost of
investing in the Fund with the cost of investing in other funds. It illustrates
the hypothetical expenses that such investors would incur over various periods
if they invest $10,000 in the Fund for the time periods indicated and then
redeemed all of the shares at the end of those periods. This example assumes
that the Fund provides a return of 5% a year and that operating expenses remain
the same. This example does not include the brokerage commission that retail
investors may pay to buy and sell shares of the Fund. Although your actual costs
may be higher or lower, based on these assumptions, your costs would be:
-------------------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
-------------------------------------------------------------------------------------------
$59 $186 $324 $726
-------------------------------------------------------------------------------------------
You would pay the following expenses if you did not redeem your shares:
-------------------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
-------------------------------------------------------------------------------------------
$59 $186 $324 $726
-------------------------------------------------------------------------------------------
44 WisdomTree Trust Prospectus
--------------------------------------------------------------------------------
WisdomTree International Dividend Funds
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
WisdomTree Japan
SmallCap Dividend Fund
Fund Facts
--------------------------------------------------------------------------------
Cusip Number:
97717W836
Exchange Trading Symbol:
DFJ
--------------------------------------------------------------------------------
WisdomTree Japan SmallCap Dividend Fund
Investment Objective
The Fund seeks to track the price and yield performance, before fees and
expenses, of the WisdomTree Japan SmallCap Dividend Index. Since the Fund's
investment objective has been adopted as a non-fundamental investment policy,
the Fund's investment objective may be changed without a vote of shareholders.
Primary Investment Strategies
The Fund employs a "passive management" - or indexing - investment approach
designed to track the performance of the WisdomTree Japan SmallCap Dividend
Index. The Fund attempts to invest all, or substantially all, of its assets in
the stocks that make up the Index. The Fund generally uses a Representative
Sampling strategy to achieve its investment objective.
Index Description
The WisdomTree Japan SmallCap Dividend Index measures the performance of
small-capitalization companies incorporated in Japan that pay regular cash
dividends on shares of common stock and meet specified requirements as of the
Index measurement date. The Index is created by first removing the 300 companies
with the highest market capitalizations as of the Index measurement date from
the WisdomTree Japan Dividend Index. The remaining companies are then weighted
in the Index based on regular cash dividends paid. The Index includes primarily
small-capitalization securities. In this sense, it is a dividend-weighted
small-cap index for the dividend-paying segment of Japan. As of June 30, 2008,
approximately 99% of the capitalization of the Index consisted of companies with
market capitalizations less than $2.0 billion.
Primary Investment Risks
You can lose money on your investment in the Fund. For information about the
risks of investing in the Fund, see the sections herein entitled "Principal Risk
Factors Common to All Funds" and "Principal Risk Factors Common to the
International Dividend Funds." In addition, the Fund is subject to the following
potential risks. As with all potential risks, this could decrease the value of
your Fund investment.
o Geographic Concentration Risk. To the extent the Fund invests a
significant portion of its assets in the securities of a single country it
is more likely to be impacted by events or conditions affecting that
country. For example, political and economic conditions and changes in
regulatory, tax, or economic policy in a country could significantly
affect the market in that country and in surrounding or related countries.
The Japanese economy has only recently emerged from a prolonged economic
downturn. Since the year 2000, Japan's economic growth rate has remained
relatively low. The economy is characterized by government intervention
and protectionism, an unstable financial services sector, and relatively
high unemployment. Economic growth is heavily dependent on international
trade, government support of the financial
WisdomTree Trust Prospectus 45
services sector and other troubled sectors, and consistent government
policy. The United States is Japan's largest single trading partner, but
close to half of Japan's trade is conducted with developing nations,
almost all of which are in Southeast Asia. Slowdowns in the U.S. and China
could have a negative impact on Japan. Exposure to China, in terms of both
imports and exports, has been increasing in recent years.
o Small-Capitalization Investing. The Fund invests primarily in securities
of small-capitalization companies. As a result, the Fund may be more
volatile than funds that invest in larger, more established companies. The
securities of small-capitalization companies generally trade in lower
volumes and are subject to greater and more unpredictable price changes
than larger capitalization stocks or the stock market as a whole.
Small-capitalization companies may be particularly sensitive to changes in
interest rates, borrowing costs and earnings.
o Consumer Discretionary Investing. The Fund generally invests a relatively
large percentage of its assets in the consumer discretionary sector. This
sector consists of, for example, automobile, media and retail companies.
The consumer discretionary sector of the economy can be significantly
affected by the performance of the overall economy, interest rates,
competition, consumer confidence and spending, and changes in demographics
and consumer tastes.
Performance Information
The bar chart that follows shows the annual total returns of the Fund for each
full calendar year since the Fund commenced operations. The table that follows
the bar chart shows the Fund's average annual total returns, both before and
after taxes. The bar chart and table provide an indication of the risks of
investing in the Fund by showing the Fund's performance for calendar year 2007
and showing how the Fund's average annual returns compared with its underlying
index and another measure of market performance. All returns assume reinvestment
of dividends and distributions. The Fund's past performance (before and after
taxes) is not necessarily an indication of how the Fund will perform in the
future.
[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
2007
-------
Total Return (7.67)%
The Fund's year-to-date total return as of June 30, 2008 was (4.42)%.
Best and Worst Quarter Returns (for the period reflected in the bar chart above)
--------------------------------------------------------------------------------
Return Quarter/Year
--------------------------------------------------------------------------------
Highest Return 3.79% 1/2007
--------------------------------------------------------------------------------
Lowest Return (6.41)% 4/2007
--------------------------------------------------------------------------------
46 WisdomTree Trust Prospectus
Average Annual Total Returns as of December 31, 2007
--------------------------------------------------------------------------------------------
WisdomTree Japan SmallCap Dividend Fund 1 Year Since Inception(1)
--------------------------------------------------------------------------------------------
Return before taxes (7.67)% (5.31)%
--------------------------------------------------------------------------------------------
Return after taxes on distributions(2) (8.09)% (5.61)%
--------------------------------------------------------------------------------------------
Return after taxes on distributions and sale of Fund shares (4.99)% (4.67)%
--------------------------------------------------------------------------------------------
MSCI Japan Small Cap Index(3)
(reflects no deduction for fees, expenses or taxes) (11.64)% (11.00)%
--------------------------------------------------------------------------------------------
WisdomTree Japan SmallCap Dividend Index
(reflects no deduction for fees, expenses or taxes) (6.74)% (4.82)%
--------------------------------------------------------------------------------------------
(1) The Fund commenced operations on June 16, 2006.
(2) After-tax returns are calculated using the highest historical individual
federal marginal income tax rates and do not reflect the impact of state
and local taxes. Actual after-tax returns depend on your tax situation and
may differ from those shown and are not relevant if you hold your shares
through tax-deferred arrangements, such as 401(k) plans or individual
retirement accounts. In some cases the return after taxes may exceed the
return before taxes due to an assumed tax benefit from any losses on a
sale of Fund shares at the end of the measurement period.
(3) The MSCI Japan Small Cap Index measures the performance of small cap
stocks in the MSCI Japan Index.
Fees and Expenses
The following table describes the fees and expenses you may pay if you buy and
hold shares of the Fund. The fees are expressed as a percentage of the Fund's
average net assets. You may also incur customary brokerage charges when buying
or selling Fund shares.
--------------------------------------------------------------------------------------------
Shareholder Fees None
(fees paid directly from your investment, but see the Creation Transaction Fees
and Redemption Transaction Fees section below)
--------------------------------------------------------------------------------------------
Annual Fund Operating Expenses (expenses deducted from Fund assets)
--------------------------------------------------------------------------------------------
Management Fees 0.58%
--------------------------------------------------------------------------------------------
Distribution and/or Service (12b-1) Fees None
--------------------------------------------------------------------------------------------
Other Expenses(a) 0.00%
--------------------------------------------------------------------------------------------
Total Annual Fund Operating Expenses 0.58%
--------------------------------------------------------------------------------------------
(a) WisdomTree Asset Management has agreed to pay all operating expenses of
the Fund, except interest expenses and taxes, brokerage expenses, future
distribution fees or expenses, and extraordinary expenses through July 31,
2009. WisdomTree Asset Management receives a fee of up to .0044% in
exchange for providing certain non-advisory services to the Fund.
The following example is intended to help retail investors compare the cost of
investing in the Fund with the cost of investing in other funds. It illustrates
the hypothetical expenses that such investors would incur over various periods
if they invest $10,000 in the Fund for the time periods indicated and then
redeemed all of the shares at the end of those periods. This example assumes
that the Fund provides a return of 5% a year and that operating expenses remain
the same. This example does not include the brokerage commission that retail
investors may pay to buy and sell shares of the Fund. Although your actual costs
may be higher or lower, based on these assumptions, your costs would be:
--------------------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
--------------------------------------------------------------------------------------------
$59 $186 $324 $726
--------------------------------------------------------------------------------------------
You would pay the following expenses if you did not redeem your shares:
--------------------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
--------------------------------------------------------------------------------------------
$59 $186 $324 $726
--------------------------------------------------------------------------------------------
WisdomTree Trust Prospectus 47
--------------------------------------------------------------------------------
WisdomTree International Dividend Funds
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
WisdomTree Pacific
ex-Japan Total
Dividend Fund
Fund Facts
--------------------------------------------------------------------------------
Cusip Number:
97717W828
Exchange Trading Symbol:
DND
--------------------------------------------------------------------------------
WisdomTree Pacific ex-Japan Total Dividend Fund
Investment Objective
The Fund seeks to track the price and yield performance, before fees and
expenses, of the WisdomTree Pacific ex-Japan Dividend Index. Since the Fund's
investment objective has been adopted as a non-fundamental investment policy,
the Fund's investment objective may be changed without a vote of shareholders.
Primary Investment Strategies
The Fund employs a "passive management" - or indexing - investment approach
designed to track the performance of the WisdomTree Pacific ex-Japan Dividend
Index. The Fund attempts to invest all, or substantially all, of its assets in
the stocks that make up the Index. The Fund generally uses a Representative
Sampling strategy to achieve its investment objective.
Index Description
The WisdomTree Pacific ex-Japan Dividend Index measures the performance of
companies in Hong Kong, Singapore, Australia and New Zealand that pay regular
cash dividends on shares of common stock and meet specified requirements as of
the Index measurement date. The Index is comprised of companies that are
incorporated in and have their shares listed on a major stock exchange in Hong
Kong, Singapore, Australia or New Zealand. Companies must have paid at least $5
million in cash dividends on their common stock in the annual cycle prior to the
most recent Index measurement date and must also satisfy specified liquidity and
other requirements. Companies are weighted in the Index based on regular cash
dividends paid. The Index includes large-capitalization, mid-capitalization and
small-capitalization securities. In this sense, it is a dividend-weighted total
market index for the dividend-paying segment of Hong Kong, Singapore, Australia
and New Zealand. As of June 30, 2008, approximately 66% of the capitalization of
the Index consisted of companies with market capitalizations over $10 billion.
Primary Investment Risks
You can lose money on your investment in the Fund. For information about the
risks of investing in the Fund, see the sections herein entitled "Principal Risk
Factors Common to All Funds" and "Principal Risk Factors Common to the
International Dividend Funds." In addition, the Fund is subject to the following
potential risks. As with all potential risks, this could decrease the value of
your Fund investment.
o Geographic Concentration Risk. To the extent the Fund invests a
significant portion of its assets in the securities of companies of a
single country or region it is more likely to be impacted by events or
conditions affecting that country or region. For example, political and
economic conditions and changes in regulatory, tax, or economic policy in
a country could significantly affect the market in that country and in
surrounding or related countries. Pacific Basin economies are
characterized by heavy reliance on
48 WisdomTree Trust Prospectus
international trade. Currency devaluations or restrictions, political and
social instability, and changing economic conditions have resulted in
significant market volatility. The Australia and New Zealand economies are
dependent on the economies of Asian countries and on the price and demand
for agricultural products and natural resources. The Fund generally
invests a relatively large percentage of its assets in companies organized
in Australia or Hong Kong.
o Mid-Capitalization Investing. The Fund generally invests a relatively
large percentage of its assets in securities of mid-capitalization
companies. The securities of mid-capitalization companies may be more
vulnerable to adverse issuer, market, political, or economic developments
than the market as a whole or other types of securities. As a result, the
Fund may be more volatile than funds that invest in larger, more
established companies.
Performance Information
The bar chart that follows shows the annual total returns of the Fund for each
full calendar year since the Fund commenced operations. The table that follows
the bar chart shows the Fund's average annual total returns, both before and
after taxes. The bar chart and table provide an indication of the risks of
investing in the Fund by showing the Fund's performance for calendar year 2007
and showing how the Fund's average annual returns compared with its underlying
index and another measure of market performance. All returns assume reinvestment
of dividends and distributions. The Fund's past performance (before and after
taxes) is not necessarily an indication of how the Fund will perform in the
future.
[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
2007
------
Total Return 34.73%
The Fund's year-to-date total return as of June 30, 2008 was (11.43)%.
Best and Worst Quarter Returns (for the period reflected in the bar chart above)
--------------------------------------------------------------------------------
Return Quarter/Year
--------------------------------------------------------------------------------
Highest Return 12.92% 3/2007
--------------------------------------------------------------------------------
Lowest Return 0.65% 4/2007
--------------------------------------------------------------------------------
WisdomTree Trust Prospectus 49
Average Annual Total Returns as of December 31, 2007
----------------------------------------------------------------------------------------------
WisdomTree Pacific ex-Japan Total Dividend Fund 1 Year Since Inception(1)
----------------------------------------------------------------------------------------------
Return before taxes 34.73% 41.76%
----------------------------------------------------------------------------------------------
Return after taxes on distributions(2) 33.64% 40.81%
----------------------------------------------------------------------------------------------
Return after taxes on distributions and sale of Fund shares 22.55% 35.37%
----------------------------------------------------------------------------------------------
MSCI Pacific ex-Japan Index(3)
(reflects no deduction for fees, expenses or taxes) 30.54% 37.45%
----------------------------------------------------------------------------------------------
WisdomTree Pacific ex-Japan Dividend Index
(reflects no deduction for fees, expenses or taxes) 34.97% 42.84%
----------------------------------------------------------------------------------------------
(1) The Fund commenced operations on June 16, 2006.
(2) After-tax returns are calculated using the highest historical individual
federal marginal income tax rates and do not reflect the impact of state
and local taxes. Actual after-tax returns depend on your tax situation and
may differ from those shown and are not relevant if you hold your shares
through tax-deferred arrangements, such as 401(k) plans or individual
retirement accounts. In some cases the return after taxes may exceed the
return before taxes due to an assumed tax benefit from any losses on a
sale of Fund shares at the end of the measurement period.
(3) The MSCI Pacific ex-Japan Index is a subset of the MSCI EAFE Index and
measures the performance of stocks in Australia, Hong Kong, Singapore, and
New Zealand.
Fees and Expenses
The following table describes the fees and expenses you may pay if you buy and
hold shares of the Fund. The fees are expressed as a percentage of the Fund's
average net assets. You may also incur customary brokerage charges when buying
or selling Fund shares.
----------------------------------------------------------------------------------------------
Shareholder Fees None
(fees paid directly from your investment, but see the Creation Transaction Fees
and Redemption Transaction Fees section below)
----------------------------------------------------------------------------------------------
Annual Fund Operating Expenses (expenses deducted from Fund assets)
----------------------------------------------------------------------------------------------
Management Fees 0.48%
----------------------------------------------------------------------------------------------
Distribution and/or Service (12b-1) Fees None
----------------------------------------------------------------------------------------------
Other Expenses(a) 0.00%
----------------------------------------------------------------------------------------------
Total Annual Fund Operating Expenses 0.48%
----------------------------------------------------------------------------------------------
(a) WisdomTree Asset Management has agreed to pay all operating expenses of
the Fund, except interest expenses and taxes, brokerage expenses, future
distribution fees or expenses, and extraordinary expenses through July 31,
2009. WisdomTree Asset Management receives a fee of up to .0044% in
exchange for providing certain non-advisory services to the Fund.
The following example is intended to help retail investors compare the cost of
investing in the Fund with the cost of investing in other funds. It illustrates
the hypothetical expenses that such investors would incur over various periods
if they invest $10,000 in the Fund for the time periods indicated and then
redeemed all of the shares at the end of those periods. This example assumes
that the Fund provides a return of 5% a year and that operating expenses remain
the same. This example does not include the brokerage commission that retail
investors may pay to buy and sell shares of the Fund. Although your actual costs
may be higher or lower, based on these assumptions, your costs would be:
----------------------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
----------------------------------------------------------------------------------------------
$49 $154 $269 $604
----------------------------------------------------------------------------------------------
You would pay the following expenses if you did not redeem your shares:
----------------------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
----------------------------------------------------------------------------------------------
$49 $154 $269 $604
----------------------------------------------------------------------------------------------
50 WisdomTree Trust Prospectus
--------------------------------------------------------------------------------
WisdomTree International Dividend Funds
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
WisdomTree Pacific
ex-Japan High-Yielding
Equity Fund
Fund Facts
--------------------------------------------------------------------------------
Cusip Number:
97717W810
Exchange Trading Symbol:
DNH
--------------------------------------------------------------------------------
WisdomTree Pacific ex-Japan High-Yielding Equity Fund
Investment Objective
The Fund seeks to track the price and yield performance, before fees and
expenses, of the WisdomTree Pacific ex-Japan High-Yielding Equity Index. Since
the Fund's investment objective has been adopted as a non-fundamental investment
policy, the Fund's investment objective may be changed without a vote of
shareholders.
Primary Investment Strategies
The Fund employs a "passive management" - or indexing - investment approach
designed to track the performance of the WisdomTree Pacific ex-Japan
High-Yielding Equity Index. The Fund attempts to invest all, or substantially
all, of its assets in the stocks that make up the Index. The Fund generally uses
a Representative Sampling strategy to achieve its investment objective.
Index Description
The WisdomTree Pacific ex-Japan High-Yielding Equity Index measures the
performance of the highest dividend paying stocks within the WisdomTree Pacific
ex-Japan Dividend Index that meet specified requirements as of the Index
measurement date. The Index is created by selecting from the WisdomTree Pacific
ex-Japan Dividend Index those companies with market capitalizations of at least
$200 million and average daily dollar trading volumes of at least $200,000 for
the three months prior to the measurement date. The top 30% of these companies
ranked by dividend yield are included in the Index. Companies are weighted in
the Index based on regular cash dividends paid. The Index includes
large-capitalization, mid-capitalization and small-capitalization securities. In
this sense, it is a dividend-weighted, multi-capitalization index for the
high-yielding dividend segment of Hong Kong, Singapore, Australia and New
Zealand. As of June 30, 2008, approximately 63% of the capitalization of the
Index consisted of companies with market capitalizations over $10 billion.
Primary Investment Risks
You can lose money on your investment in the Fund. For information about the
risks of investing in the Fund, see the sections herein entitled "Principal Risk
Factors Common to All Funds" and "Principal Risk Factors Common to the
International Dividend Funds." In addition, the Fund is subject to the following
potential risks. As with all potential risks, this could decrease the value of
your Fund investment.
o Geographic Concentration Risk. To the extent the Fund invests a
significant portion of its assets in the securities of companies of a
single country or region it is more likely to be impacted by events or
conditions affecting that country or region. For example, political and
economic conditions and changes in regulatory, tax, or economic policy in
a country could significantly affect the market in that country and in
surrounding or related countries. Pacific Basin economies are
characterized by heavy reliance on
WisdomTree Trust Prospectus 51
international trade. Currency devaluations or restrictions, political and
social instability, and changing economic conditions have resulted in
significant market volatility. The Australia and New Zealand economies are
dependent on the economies of Asian countries and on the price and demand
for agricultural products and natural resources. The Fund generally
invests a significant percentage of its assets (sometimes more than 80%)
in companies organized in Australia.
o Mid-Capitalization Investing. The Fund generally invests a large
percentage of its assets in securities of mid-capitalization companies.
The securities of mid-capitalization companies may be more vulnerable to
adverse issuer, market, political, or economic developments than the
market as a whole or other types of securities. As a result, the Fund may
be more volatile than funds that invest in larger, more established
companies.
Performance Information
The bar chart that follows shows the annual total returns of the Fund for each
full calendar year since the Fund commenced operations. The table that follows
the bar chart shows the Fund's average annual total returns, both before and
after taxes. The bar chart and table provide an indication of the risks of
investing in the Fund by showing the Fund's performance for calendar year 2007
and showing how the Fund's average annual returns compared with its underlying
index and another measure of market performance. All returns assume reinvestment
of dividends and distributions. The Fund's past performance (before and after
taxes) is not necessarily an indication of how the Fund will perform in the
future.
[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
2007
--------
Total Return 21.67%
The Fund's year-to-date total return as of June 30, 2008 was (13.95)%.
Best and Worst Quarter Returns (for the period reflected in the bar chart above)
--------------------------------------------------------------------------------
Return Quarter/Year
--------------------------------------------------------------------------------
Highest Return 9.68% 2/2007
--------------------------------------------------------------------------------
Lowest Return (2.57)% 4/2007
--------------------------------------------------------------------------------
52 WisdomTree Trust Prospectus
Average Annual Total Returns as of December 31, 2007
----------------------------------------------------------------------------------------------
WisdomTree Pacific ex-Japan High-Yielding Equity Fund 1 Year Since Inception(1)
----------------------------------------------------------------------------------------------
Return before taxes 21.67% 32.44%
----------------------------------------------------------------------------------------------
Return after taxes on distributions(2) 19.55% 30.69%
----------------------------------------------------------------------------------------------
Return after taxes on distributions and sale of Fund shares 14.04% 26.81%
----------------------------------------------------------------------------------------------
MSCI Pacific ex-Japan Value Index(3)
(reflects no deduction for fees, expenses or taxes) 17.89% 29.81%
----------------------------------------------------------------------------------------------
WisdomTree Pacific ex-Japan High-Yielding Equity Index
(reflects no deduction for fees, expenses or taxes) 21.85% 33.08%
----------------------------------------------------------------------------------------------
(1) The Fund commenced operations on June 16, 2006.
(2) After-tax returns are calculated using the highest historical individual
federal marginal income tax rates and do not reflect the impact of state
and local taxes. Actual after-tax returns depend on your tax situation and
may differ from those shown and are not relevant if you hold your shares
through tax-deferred arrangements, such as 401(k) plans or individual
retirement accounts. In some cases the return after taxes may exceed the
return before taxes due to an assumed tax benefit from any losses on a
sale of Fund shares at the end of the measurement period.
(3) The MSCI Pacific ex-Japan Value Index measures the performance of Value
stocks in the MSCI Pacific ex-Japan Index.
Fees and Expenses
The following table describes the fees and expenses you may pay if you buy and
hold shares of the Fund. The fees are expressed as a percentage of the Fund's
average net assets. You may also incur customary brokerage charges when buying
or selling Fund shares.
----------------------------------------------------------------------------------------------
Shareholder Fees None
(fees paid directly from your investment, but see the Creation Transaction Fees
and Redemption Transaction Fees section below)
----------------------------------------------------------------------------------------------
Annual Fund Operating Expenses (expenses deducted from Fund assets)
----------------------------------------------------------------------------------------------
Management Fees 0.58%
----------------------------------------------------------------------------------------------
Distribution and/or Service (12b-1) Fees None
----------------------------------------------------------------------------------------------
Other Expenses(a) 0.00%
----------------------------------------------------------------------------------------------
Total Annual Fund Operating Expenses 0.58%
----------------------------------------------------------------------------------------------
(a) WisdomTree Asset Management has agreed to pay all operating expenses of
the Fund, except interest expenses and taxes, brokerage expenses, future
distribution fees or expenses, and extraordinary expenses through July 31,
2009. WisdomTree Asset Management receives a fee of up to .0044% in
exchange for providing certain non-advisory services to the Fund.
The following example is intended to help retail investors compare the cost of
investing in the Fund with the cost of investing in other funds. It illustrates
the hypothetical expenses that such investors would incur over various periods
if they invest $10,000 in the Fund for the time periods indicated and then
redeemed all of the shares at the end of those periods. This example assumes
that the Fund provides a return of 5% a year and that operating expenses remain
the same. This example does not include the brokerage commission that retail
investors may pay to buy and sell shares of the Fund. Although your actual costs
may be higher or lower, based on these assumptions, your costs would be:
----------------------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
----------------------------------------------------------------------------------------------
$59 $186 $324 $726
----------------------------------------------------------------------------------------------
You would pay the following expenses if you did not redeem your shares:
----------------------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
----------------------------------------------------------------------------------------------
$59 $186 $324 $726
----------------------------------------------------------------------------------------------
WisdomTree Trust Prospectus 53
--------------------------------------------------------------------------------
WisdomTree International Dividend Funds
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
WisdomTree International
LargeCap Dividend Fund
Fund Facts
--------------------------------------------------------------------------------
Cusip Number:
97717W794
Exchange Trading Symbol:
DOL
--------------------------------------------------------------------------------
WisdomTree International LargeCap Dividend Fund
Investment Objective
The Fund seeks to track the price and yield performance, before fees and
expenses, of the WisdomTree International LargeCap Dividend Index. Since the
Fund's investment objective has been adopted as a non-fundamental investment
policy, the Fund's investment objective may be changed without a vote of
shareholders.
Primary Investment Strategies
The Fund employs a "passive management" - or indexing - investment approach
designed to track the performance of the WisdomTree International LargeCap
Dividend Index. The Fund attempts to invest all, or substantially all, of its
assets in the stocks that make up the Index. The Fund generally uses a
Representative Sampling strategy to achieve its investment objective.
Index Description
The WisdomTree International LargeCap Dividend Index measures the performance of
companies that pay regular cash dividends from the large-capitalization segment
of markets in Europe, Far East Asia and Australasia and that meet specified
requirements as of the Index measurement date. The Index is created by selecting
from the WisdomTree DEFA Index the 300 companies in the Index with the highest
market capitalizations. Companies are weighted in the Index based on regular
cash dividends paid. The Index consists of large-capitalization securities. In
this sense, it is a dividend-weighted, large-capitalization index for Europe,
Far East Asia and Australasia. As of June 30, 2008, approximately 100% of the
capitalization of the Index consisted of companies with market capitalizations
over $10.0 billion.
Primary Investment Risks
You can lose money on your investment in the Fund. For information about the
risks of investing in the Fund, see the sections herein entitled "Principal Risk
Factors Common to All Funds" and "Principal Risk Factors Common to the
International Dividend Funds." In addition, the Fund is subject to the following
potential risk. As with all potential risks, this could decrease the value of
your Fund investment.
o Geographic Concentration Risk. To the extent the Fund invests a
significant portion of its assets in the securities of companies of a
single country or region it is more likely to be impacted by events or
conditions affecting that country or region. For example, political and
economic conditions and changes in regulatory, tax, or economic policy in
a country could significantly affect the market in that country and in
surrounding or related countries and have a negative impact on a Fund's
performance. The Fund generally invests a relatively large percentage of
its assets in companies organized in France and the United Kingdom.
54 WisdomTree Trust Prospectus
Performance Information
The bar chart that follows shows the annual total returns of the Fund for each
full calendar year since the Fund commenced operations. The table that follows
the bar chart shows the Fund's average annual total returns, both before and
after taxes. The bar chart and table provide an indication of the risks of
investing in the Fund by showing the Fund's performance for calendar year 2007
and showing how the Fund's average annual returns compared with its underlying
index and another measure of market performance. All returns assume reinvestment
of dividends and distributions. The Fund's past performance (before and after
taxes) is not necessarily an indication of how the Fund will perform in the
future.
[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
2007
--------
Total Return 15.45%
The Fund's year-to-date total return as of June 30, 2008 was (13.02)%.
Best and Worst Quarter Returns (for the period reflected in the bar chart above)
----------------------------------------------------------------------------------------------
Return Quarter/Year
----------------------------------------------------------------------------------------------
Highest Return 8.01% 2/2007
----------------------------------------------------------------------------------------------
Lowest Return 0.35% 4/2007
----------------------------------------------------------------------------------------------
Average Annual Total Returns as of December 31, 2007
----------------------------------------------------------------------------------------------
WisdomTree International LargeCap Dividend Fund 1 Year Since Inception(1)
----------------------------------------------------------------------------------------------
Return before taxes 15.45% 25.16%
----------------------------------------------------------------------------------------------
Return after taxes on distributions(2) 14.63% 24.45%
----------------------------------------------------------------------------------------------
Return after taxes on distributions and sale of Fund shares 10.03% 21.14%
----------------------------------------------------------------------------------------------
MSCI EAFE Index(3)
(reflects no deduction for fees, expenses or taxes) 11.11% 20.87%
----------------------------------------------------------------------------------------------
WisdomTree International LargeCap Dividend Index
(reflects no deduction for fees, expenses or taxes) 16.52% 26.34%
----------------------------------------------------------------------------------------------
(1) The Fund commenced operations on June 16, 2006.
(2) After-tax returns are calculated using the highest historical individual
federal marginal income tax rates and do not reflect the impact of state
and local taxes. Actual after-tax returns depend on your tax situation and
may differ from those shown and are not relevant if you hold your shares
through tax-deferred arrangements, such as 401(k) plans or individual
retirement accounts. In some cases the return after taxes may exceed the
return before taxes due to an assumed tax benefit from any losses on a
sale of Fund shares at the end of the measurement period.
(3) The MSCI EAFE Index is a market cap-weighted index composed of companies
representative of the developed market structure of 21 developed countries
in Europe, Australia and Japan.
WisdomTree Trust Prospectus 55
Fees and Expenses
The following table describes the fees and expenses you may pay if you buy and
hold shares of the Fund. The fees are expressed as a percentage of the Fund's
average net assets. You may also incur customary brokerage charges when buying
or selling Fund shares.
-----------------------------------------------------------------------------------------
Shareholder Fees None
(fees paid directly from your investment, but see the Creation Transaction Fees
and Redemption Transaction Fees section below)
-----------------------------------------------------------------------------------------
Annual Fund Operating Expenses (expenses deducted from Fund assets)
-----------------------------------------------------------------------------------------
Management Fees 0.48%
-----------------------------------------------------------------------------------------
Distribution and/or Service (12b-1) Fees None
-----------------------------------------------------------------------------------------
Other Expenses(a) 0.00%
-----------------------------------------------------------------------------------------
Total Annual Fund Operating Expenses 0.48%
-----------------------------------------------------------------------------------------
(a) WisdomTree Asset Management has agreed to pay all operating expenses of
the Fund, except interest expenses and taxes, brokerage expenses, future
distribution fees or expenses, and extraordinary expenses through July 31,
2009. WisdomTree Asset Management receives a fee of up to .0044% in
exchange for providing certain non-advisory services to the Fund.
The following example is intended to help retail investors compare the cost of
investing in the Fund with the cost of investing in other funds. It illustrates
the hypothetical expenses that such investors would incur over various periods
if they invest $10,000 in the Fund for the time periods indicated and then
redeemed all of the shares at the end of those periods. This example assumes
that the Fund provides a return of 5% a year and that operating expenses remain
the same. This example does not include the brokerage commission that retail
investors may pay to buy and sell shares of the Fund. Although your actual costs
may be higher or lower, based on these assumptions, your costs would be:
-----------------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
-----------------------------------------------------------------------------------------
$49 $154 $269 $604
-----------------------------------------------------------------------------------------
You would pay the following expenses if you did not redeem your shares:
-----------------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
-----------------------------------------------------------------------------------------
$49 $154 $269 $604
-----------------------------------------------------------------------------------------
56 WisdomTree Trust Prospectus
--------------------------------------------------------------------------------
WisdomTree International Dividend Funds
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
WisdomTree International
Dividend Top 100 Fund
Fund Facts
--------------------------------------------------------------------------------
Cusip Number:
97717W786
Exchange Trading Symbol:
DOO
--------------------------------------------------------------------------------
WisdomTree International Dividend Top 100 Fund
Investment Objective
The Fund seeks to track the price and yield performance, before fees and
expenses, of the WisdomTree International Dividend Top 100 Index. Since the
Fund's investment objective has been adopted as a non-fundamental investment
policy, the Fund's investment objective may be changed without a vote of
shareholders.
Primary Investment Strategies
The Fund employs a "passive management" - or indexing - investment approach
designed to track the performance of the WisdomTree International Dividend Top
100 Index. The Fund attempts to invest all, or substantially all, of its assets
in the stocks that make up the Index. The Fund generally uses a Representative
Sampling strategy to achieve its investment objective and generally will hold
each stock in approximately the same proportion as its weighting in the Index.
Index Description
The WisdomTree International Dividend Top 100 Index measures the performance of
100 high dividend-yielding companies from Europe, Far East Asia and Australasia.
The Index is created by selecting the 100 highest dividend-yielding companies
from the WisdomTree International LargeCap Dividend Index that meet specified
requirements as of the Index measurement date. Unlike other WisdomTree
International Indexes, which weight index components based on regular cash
dividends paid, a component's weight in the Index is based on its annual
dividend yield as of the Index measurement date. A component company's weight in
the Index is determined by dividing its annual dividend yield by the sum of all
the annual dividend yields for all the component companies in the Index. The
Index consists of selected large-capitalization securities. In this sense, it is
a dividend-yield weighted large-capitalization developed market index for
Europe, Far East Asia and Australasia. As of June 30, 2008, approximately 100%
of the capitalization of the Index consisted of companies with market
capitalizations over $10.0 billion.
Primary Investment Risks
You can lose money on your investment in the Fund. For information about the
risks of investing in the Fund, see the sections herein entitled "Principal Risk
Factors Common to All Funds" and "Principal Risk Factors Common to the
International Dividend Funds." In addition, the Fund is subject to the following
potential risk. As with all potential risks, this could decrease the value of
your Fund investment.
o Geographic Concentration Risk. To the extent the Fund invests a
significant portion of its assets in the securities of companies of a
single country or region it is more likely to be impacted by events or
conditions affecting that country or region. For example, political and
economic conditions and changes in regulatory, tax, or economic policy
WisdomTree Trust Prospectus 57
in a country could significantly affect the market in that country and in
surrounding or related countries and have a negative impact on a Fund's
performance. The Fund generally invests a relatively large percentage of
its assets in companies organized in Australia, France and the United
Kingdom.
Performance Information
The bar chart that follows shows the annual total returns of the Fund for each
full calendar year since the Fund commenced operations. The table that follows
the bar chart shows the Fund's average annual total returns, both before and
after taxes. The bar chart and table provide an indication of the risks of
investing in the Fund by showing the Fund's performance for calendar year 2007
and showing how the Fund's average annual returns compared with its underlying
index and another measure of market performance. All returns assume reinvestment
of dividends and distributions. The Fund's past performance (before and after
taxes) is not necessarily an indication of how the Fund will perform in the
future.
[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
2007
--------
Total Return 14.04%
The Fund's year-to-date total return as of June 30, 2008 was (14.51)%.
Best and Worst Quarter Returns (for the period reflected in the bar chart above)
----------------------------------------------------------------------------------------------
Return Quarter/Year
----------------------------------------------------------------------------------------------
Highest Return 6.31% 2/2007
----------------------------------------------------------------------------------------------
Lowest Return (0.20)% 4/2007
----------------------------------------------------------------------------------------------
Average Annual Total Returns as of December 31, 2007
----------------------------------------------------------------------------------------------
WisdomTree International Dividend Top 100 Fund 1 Year Since Inception(1)
----------------------------------------------------------------------------------------------
Return before taxes 14.04% 27.80%
----------------------------------------------------------------------------------------------
Return after taxes on distributions(2) 13.03% 26.96%
----------------------------------------------------------------------------------------------
Return after taxes on distributions and sale of Fund shares 9.11% 23.35%
----------------------------------------------------------------------------------------------
MSCI EAFE Value Index(3)
(reflects no deduction for fees, expenses or taxes) 5.92% 18.73%
----------------------------------------------------------------------------------------------
WisdomTree International Dividend Top 100 Index
(reflects no deduction for fees, expenses or taxes) 14.67% 28.92%
----------------------------------------------------------------------------------------------
(1) The Fund commenced operations on June 16, 2006.
(2) After-tax returns are calculated using the highest historical individual
federal marginal income tax rates and do not reflect the impact of state
and local taxes. Actual after-tax returns depend on your tax situation and
may differ from those shown and are not relevant if you hold your shares
through tax-deferred arrangements, such as 401(k) plans or individual
retirement accounts. In some cases the return after taxes may exceed the
return before taxes due to an assumed tax benefit from any losses on a
sale of Fund shares at the end of the measurement period.
(3) The MSCI EAFE Value Index measures the performance of value stocks in the
MSCI EAFE Index.
58 WisdomTree Trust Prospectus
Fees and Expenses
The following table describes the fees and expenses you may pay if you buy and
hold shares of the Fund. The fees are expressed as a percentage of the Fund's
average net assets. You may also incur customary brokerage charges when buying
or selling Fund shares.
------------------------------------------------------------------------------------------
Shareholder Fees None
(fees paid directly from your investment, but see the Creation Transaction Fees
and Redemption Transaction Fees section below)
------------------------------------------------------------------------------------------
Annual Fund Operating Expenses (expenses deducted from Fund assets)
------------------------------------------------------------------------------------------
Management Fees 0.58%
------------------------------------------------------------------------------------------
Distribution and/or Service (12b-1) Fees None
------------------------------------------------------------------------------------------
Other Expenses(a) 0.00%
------------------------------------------------------------------------------------------
Total Annual Fund Operating Expenses 0.58%
------------------------------------------------------------------------------------------
(a) WisdomTree Asset Management has agreed to pay all operating expenses of
the Fund, except interest expenses and taxes, brokerage expenses, future
distribution fees or expenses, and extraordinary expenses through July 31,
2009. WisdomTree Asset Management receives a fee of up to .0044% in
exchange for providing certain non-advisory services to the Fund.
The following example is intended to help retail investors compare the cost of
investing in the Fund with the cost of investing in other funds. It illustrates
the hypothetical expenses that such investors would incur over various periods
if they invest $10,000 in the Fund for the time periods indicated and then
redeemed all of the shares at the end of those periods. This example assumes
that the Fund provides a return of 5% a year and that operating expenses remain
the same. This example does not include the brokerage commission that retail
investors may pay to buy and sell shares of the Fund. Although your actual costs
may be higher or lower, based on these assumptions, your costs would be:
------------------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
------------------------------------------------------------------------------------------
$59 $186 $324 $726
------------------------------------------------------------------------------------------
You would pay the following expenses if you did not redeem your shares:
------------------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
------------------------------------------------------------------------------------------
$59 $186 $324 $726
------------------------------------------------------------------------------------------
WisdomTree Trust Prospectus 59
--------------------------------------------------------------------------------
WisdomTree International Dividend Funds
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
WisdomTree International
MidCap Dividend Fund
Fund Facts
--------------------------------------------------------------------------------
Cusip Number:
97717W778
Exchange Trading Symbol:
DIM
--------------------------------------------------------------------------------
WisdomTree International MidCap Dividend Fund
Investment Objective
The Fund seeks to track the price and yield performance, before fees and
expenses, of the WisdomTree International MidCap Dividend Index. Since the
Fund's investment objective has been adopted as a non-fundamental investment
policy, the Fund's investment objective may be changed without a vote of
shareholders.
Primary Investment Strategies
The Fund employs a "passive management" - or indexing - investment approach
designed to track the performance of the WisdomTree International MidCap
Dividend Index. The Fund attempts to invest all, or substantially all, of its
assets in the stocks that make up the Index. The Fund generally uses a
Representative Sampling strategy to achieve its investment objective.
Index Description
The WisdomTree International MidCap Dividend Index measures the performance of
companies that pay regular cash dividends from the mid-capitalization segment of
markets in Europe, Far East Asia and Australasia. The Index is created by first
removing from the WisdomTree DEFA Index the 300 companies with the highest
market capitalizations as of the Index measurement date. Those companies that
comprise the top 75% of the remaining market capitalization of this group are
included in the WisdomTree International MidCap Dividend Index. Companies are
weighted in the Index based on regular cash dividends paid. The Index consists
of primarily mid-capitalization securities. In this sense, it is a
dividend-weighted, mid-capitalization index for Europe, Far East Asia and
Australasia. As of June 30, 2008, approximately 83% of the capitalization of the
Index consisted of companies with market capitalizations between $2.0 and $10.0
billion.
Primary Investment Risks
You can lose money on your investment in the Fund. For information about the
risks of investing in the Fund, see the sections herein entitled "Principal Risk
Factors Common to All Funds" and "Principal Risk Factors Common to the
International Dividend Funds." In addition, the Fund is subject to the following
potential risks. As with all potential risks, this could decrease the value of
your Fund investment.
o Geographic Concentration Risk. To the extent the Fund invests a
significant portion of its assets in the securities of companies of a
single country or region it is more likely to be impacted by events or
conditions affecting that country or region. For example, political and
economic conditions and changes in regulatory, tax, or economic policy in
a country could significantly affect the market in that country and in
surrounding or related
60 WisdomTree Trust Prospectus
countries and have a negative impact on a Fund's performance. The Fund
generally invests a relatively large percentage of its assets in companies
organized in Japan and the United Kingdom.
o Mid-Capitalization Investing. The Fund invests primarily in securities of
mid-capitalization companies. The securities of mid-capitalization
companies may be more vulnerable to adverse issuer, market, political, or
economic developments than the market as a whole or other types of
securities. As a result, the Fund may be more volatile than funds that
invest in larger, more established companies.
o Consumer Discretionary Investing. The Fund generally invests a relatively
large percentage of its assets in the consumer discretionary sector. This
sector consists of, for example, automobile, retail and media companies.
The consumer discretionary sector of the economy can be significantly
affected by, among other things, economic growth, worldwide demand and
consumers' disposable income levels and propensity to spend.
o Industrial Sector Investing. The Fund generally invests a relatively large
percentage of its assets in the industrial sector. This sector can be
significantly affected by, among other things, capital spending levels,
economic cycles, technical obsolescence, labor relations, government
regulations, commodity prices and currency exchange rates.
Performance Information
The bar chart that follows shows the annual total returns of the Fund for each
full calendar year since the Fund commenced operations. The table that follows
the bar chart shows the Fund's average annual total returns, both before and
after taxes. The bar chart and table provide an indication of the risks of
investing in the Fund by showing the Fund's performance for calendar year 2007
and showing how the Fund's average annual returns compared with its underlying
index and another measure of market performance. All returns assume reinvestment
of dividends and distributions. The Fund's past performance (before and after
taxes) is not necessarily an indication of how the Fund will perform in the
future.
[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
2007
------
Total Return 9.03%
The Fund's year-to-date total return as of June 30, 2008 was (12.55)%.
Best and Worst Quarter Returns (for the period reflected in the bar chart above)
------------------------------------------------------------------------------------------
Return Quarter/Year
------------------------------------------------------------------------------------------
Highest Return 6.28% 1/2007
------------------------------------------------------------------------------------------
Lowest Return (3.73)% 4/2007
------------------------------------------------------------------------------------------
WisdomTree Trust Prospectus 61
Average Annual Total Returns as of December 31, 2007
------------------------------------------------------------------------------------------
WisdomTree International MidCap Dividend Fund 1 Year Since Inception(1)
------------------------------------------------------------------------------------------
Return before taxes 9.03% 23.85%
------------------------------------------------------------------------------------------
Return after taxes on distributions(2) 7.94% 22.88%
------------------------------------------------------------------------------------------
Return after taxes on distributions and sale of Fund shares 5.85% 19.86%
------------------------------------------------------------------------------------------
MSCI EAFE Index(3)
(reflects no deduction for fees, expenses or taxes) 11.11% 20.87%
------------------------------------------------------------------------------------------
WisdomTree International MidCap Dividend Index
(reflects no deduction for fees, expenses or taxes) 9.03% 24.26%
------------------------------------------------------------------------------------------
(1) The Fund commenced operations on June 16, 2006.
(2) After-tax returns are calculated using the highest historical individual
federal marginal income tax rates and do not reflect the impact of state
and local taxes. Actual after-tax returns depend on your tax situation and
may differ from those shown and are not relevant if you hold your shares
through tax-deferred arrangements, such as 401(k) plans or individual
retirement accounts. In some cases the return after taxes may exceed the
return before taxes due to an assumed tax benefit from any losses on a
sale of Fund shares at the end of the measurement period.
(3) The MSCI EAFE Index is a market cap-weighted index composed of companies
representative of the developed market structure of 21 developed countries
in Europe, Australasia and Japan.
Fees and Expenses
The following table describes the fees and expenses you may pay if you buy and
hold shares of the Fund. The fees are expressed as a percentage of the Fund's
average net assets. You may also incur customary brokerage charges when buying
or selling Fund shares.
------------------------------------------------------------------------------------------
Shareholder Fees None
(fees paid directly from your investment, but see the Creation Transaction Fees
and Redemption Transaction Fees section below)
------------------------------------------------------------------------------------------
Annual Fund Operating Expenses (expenses deducted from Fund assets)
------------------------------------------------------------------------------------------
Management Fees 0.58%
------------------------------------------------------------------------------------------
Distribution and/or Service (12b-1) Fees None
------------------------------------------------------------------------------------------
Other Expenses(a) 0.00%
------------------------------------------------------------------------------------------
Total Annual Fund Operating Expenses 0.58%
------------------------------------------------------------------------------------------
(a) WisdomTree Asset Management has agreed to pay all operating expenses of
the Fund, except interest expenses and taxes, brokerage expenses, future
distribution fees or expenses, and extraordinary expenses through July 31,
2009. WisdomTree Asset Management receives a fee of up to .0044% in
exchange for providing certain non-advisory services to the Fund.
The following example is intended to help retail investors compare the cost of
investing in the Fund with the cost of investing in other funds. It illustrates
the hypothetical expenses that such investors would incur over various periods
if they invest $10,000 in the Fund for the time periods indicated and then
redeemed all of the shares at the end of those periods. This example assumes
that the Fund provides a return of 5% a year and that operating expenses remain
the same. This example does not include the brokerage commission that retail
investors may pay to buy and sell shares of the Fund. Although your actual costs
may be higher or lower, based on these assumptions, your costs would be:
------------------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
------------------------------------------------------------------------------------------
$59 $186 $324 $726
------------------------------------------------------------------------------------------
You would pay the following expenses if you did not redeem your shares:
------------------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
------------------------------------------------------------------------------------------
$59 $186 $324 $726
------------------------------------------------------------------------------------------
62 WisdomTree Trust Prospectus
--------------------------------------------------------------------------------
WisdomTree International Dividend Funds
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
WisdomTree International
SmallCap Dividend Fund
Fund Facts
--------------------------------------------------------------------------------
Cusip Number:
97717W760
Exchange Trading Symbol:
DLS
--------------------------------------------------------------------------------
WisdomTree International SmallCap Dividend Fund
Investment Objective
The Fund seeks to track the price and yield performance, before fees and
expenses, of the WisdomTree International SmallCap Dividend Index. Since the
Fund's investment objective has been adopted as a non-fundamental investment
policy, the Fund's investment objective may be changed without a vote of
shareholders.
Primary Investment Strategies
The Fund employs a "passive management" - or indexing - investment approach
designed to track the performance of the WisdomTree International SmallCap
Dividend Index. The Fund attempts to invest all, or substantially all, of its
assets in the stocks that make up the Index. The Fund generally uses a
Representative Sampling strategy to achieve its investment objective.
Index Description
The WisdomTree International SmallCap Dividend Index measures the performance of
companies that pay regular cash dividends from the small-capitalization segment
of markets in Europe, Far East Asia and Australasia. The Index is created by
first removing from the WisdomTree DEFA Index the 300 companies with the highest
market capitalizations as of the Index measurement date. Those companies that
comprise the bottom 25% of the remaining market capitalization of this group are
included in the WisdomTree International SmallCap Dividend Index. Companies are
weighted in the Index based on regular cash dividends paid. The Index consists
of primarily small-capitalization securities. In this sense, it is a
dividend-weighted, small-capitalization index for Europe, Far East Asia and
Australasia. As of June 30, 2008, approximately 93% of the capitalization of the
Index consisted of companies with market capitalizations less than $2.0 billion.
Primary Investment Risks
You can lose money on your investment in the Fund. For information about the
risks of investing in the Fund, see the sections herein entitled "Principal Risk
Factors Common to All Funds" and "Principal Risk Factors Common to the
International Dividend Funds." In addition, the Fund is subject to the following
potential risks. As with all potential risks, this could decrease the value of
your Fund investment.
o Small-Capitalization Investing. The Fund invests primarily in securities
of small-capitalization companies. As a result, the Fund may be more
volatile than funds that invest in larger, more established companies. The
securities of small-capitalization companies generally trade in lower
volumes and are subject to greater and more unpredictable price changes
than larger capitalization stocks or the stock market as a whole.
Small-capitalization companies may be particularly sensitive to changes in
interest rates, borrowing costs and earnings.
WisdomTree Trust Prospectus 63
o Geographic Concentration Risk. To the extent the Fund invests a
significant portion of its assets in the securities of companies of a
single country or region it is more likely to be impacted by events or
conditions affecting that country or region. For example, political and
economic conditions and changes in regulatory, tax, or economic policy in
a country could significantly affect the market in that country and in
surrounding or related countries and have a negative impact on a Fund's
performance. The Fund generally invests a relatively large percentage of
its assets in companies organized in Australia, Japan and the United
Kingdom.
o Industrial Sector Investing. The Fund generally invests a relatively large
percentage of its assets in the industrial sector. This sector can be
significantly affected by, among other things, capital spending levels,
economic cycles, technical obsolescence, labor relations, government
regulations, commodity prices and currency exchange rates.
o Consumer Discretionary Investing. The Fund generally invests a relatively
large percentage of its assets in the consumer discretionary sector. This
sector consists of, for example, automobile, retail and media companies.
The consumer discretionary sector of the economy can be significantly
affected by, among other things, economic growth, worldwide demand and
consumers' disposable income levels and propensity to spend.
Performance Information
The bar chart that follows shows the annual total returns of the Fund for each
full calendar year since the Fund commenced operations. The table that follows
the bar chart shows the Fund's average annual total returns, both before and
after taxes. The bar chart and table provide an indication of the risks of
investing in the Fund by showing the Fund's performance for calendar year 2007
and showing how the Fund's average annual returns compared with its underlying
index and another measure of market performance. All returns assume reinvestment
of dividends and distributions. The Fund's past performance (before and after
taxes) is not necessarily an indication of how the Fund will perform in the
future.
[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
2007
------
Total Return 6.81%
The Fund's year-to-date total return as of June 30, 2008 was (13.33)%.
Best and Worst Quarter Returns (for the period reflected in the bar chart above)
------------------------------------------------------------------------------------------
Return Quarter/Year
------------------------------------------------------------------------------------------
Highest Return 8.12% 1/2007
------------------------------------------------------------------------------------------
Lowest Return (3.74)% 4/2007
------------------------------------------------------------------------------------------
64 WisdomTree Trust Prospectus
Average Annual Total Returns as of December 31, 2007
------------------------------------------------------------------------------------------
WisdomTree International SmallCap Dividend Fund 1 Year Since Inception(1)
------------------------------------------------------------------------------------------
Return before taxes 6.81% 20.64%
------------------------------------------------------------------------------------------
Return after taxes on distributions(2) 5.96% 19.92%
------------------------------------------------------------------------------------------
Return after taxes on distributions and sale of Fund shares 4.41% 17.24%
------------------------------------------------------------------------------------------
MSCI EAFE Small Cap Index(3)
(reflects no deduction for fees, expenses or taxes) 1.44% 11.10%
------------------------------------------------------------------------------------------
WisdomTree International SmallCap Dividend Index
(reflects no deduction for fees, expenses or taxes) 6.61% 20.32%
------------------------------------------------------------------------------------------
(1) The Fund commenced operations on June 16, 2006.
(2) After-tax returns are calculated using the highest historical individual
federal marginal income tax rates and do not reflect the impact of state
and local taxes. Actual after-tax returns depend on your tax situation and
may differ from those shown and are not relevant if you hold your shares
through tax-deferred arrangements, such as 401(k) plans or individual
retirement accounts. In some cases the return after taxes may exceed the
return before taxes due to an assumed tax benefit from any losses on a
sale of Fund shares at the end of the measurement period.
(3) The MSCI EAFE Small Cap Index measures the performance of small cap stocks
in the MSCI EAFE Index.
Fees and Expenses
The following table describes the fees and expenses you may pay if you buy and
hold shares of the Fund. The fees are expressed as a percentage of the Fund's
average net assets. You may also incur customary brokerage charges when buying
or selling Fund shares.
------------------------------------------------------------------------------------------
Shareholder Fees None
(fees paid directly from your investment, but see the Creation Transaction Fees
and Redemption Transaction Fees section below)
------------------------------------------------------------------------------------------
Annual Fund Operating Expenses (expenses deducted from Fund assets)
------------------------------------------------------------------------------------------
Management Fees 0.58%
------------------------------------------------------------------------------------------
Distribution and/or Service (12b-1) Fees None
------------------------------------------------------------------------------------------
Other Expenses(a) 0.00%
------------------------------------------------------------------------------------------
Total Annual Fund Operating Expenses 0.58%
------------------------------------------------------------------------------------------
(a) WisdomTree Asset Management has agreed to pay all operating expenses of
the Fund, except interest expenses and taxes, brokerage expenses, future
distribution fees or expenses, and extraordinary expenses through July 31,
2009. WisdomTree Asset Management receives a fee of up to .0044% in
exchange for providing certain non-advisory services to the Fund.
The following example is intended to help retail investors compare the cost of
investing in the Fund with the cost of investing in other funds. It illustrates
the hypothetical expenses that such investors would incur over various periods
if they invest $10,000 in the Fund for the time periods indicated and then
redeemed all of the shares at the end of those periods. This example assumes
that the Fund provides a return of 5% a year and that operating expenses remain
the same. This example does not include the brokerage commission that retail
investors may pay to buy and sell shares of the Fund. Although your actual costs
may be higher or lower, based on these assumptions, your costs would be:
------------------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
------------------------------------------------------------------------------------------
$59 $186 $324 $726
------------------------------------------------------------------------------------------
You would pay the following expenses if you did not redeem your shares:
------------------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
------------------------------------------------------------------------------------------
$59 $186 $324 $726
------------------------------------------------------------------------------------------
WisdomTree Trust Prospectus 65
--------------------------------------------------------------------------------
WisdomTree International Dividend Funds
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
WisdomTree Emerging
Markets High-Yielding
Equity Fund
Fund Facts
--------------------------------------------------------------------------------
Cusip Number:
o 97717W315
Exchange Trading Symbol:
o DEM
--------------------------------------------------------------------------------
WisdomTree Emerging Markets High-Yielding Equity Fund
Investment Objective
The Fund seeks to track the price and yield performance, before fees and
expenses, of the Wisdom Tree Emerging Markets High-Yielding Equity Index. Since
the Fund's investment objective has been adopted as a non-fundamental investment
policy, the Fund's investment objective may be changed without a vote of
shareholders.
Primary Investment Strategies
The Fund employs a "passive management" - or indexing - investment approach
designed to track the performance of the WisdomTree Emerging Markets
High-Yielding Equity Index. The Fund attempts to invest all, or substantially
all, of its assets in the stocks that make up the Index. The Fund generally uses
a Representative Sampling strategy to achieve its investment objective.
Index Description
The WisdomTree Emerging Markets High-Yielding Equity Index measures the
performance of emerging market stocks with relatively high dividend yields.
Companies in the Index must meet specified liquidity and other requirements as
of the Index measurement date. The Index is created by selecting the top 30% of
Index constituents ranked by dividend yield from the WisdomTree Emerging Markets
Dividend Index. Companies eligible for inclusion in the Index must be
incorporated in and have their shares listed on a major stock exchange in
Argentina, Brazil, Chile, China, Czech Republic, Hungary, India, Indonesia,
Israel, Malaysia, Mexico, Philippines, Poland, Russia, South Africa, South
Korea, Taiwan, Thailand or Turkey. Companies must have paid at least $5 million
in cash dividends on their common stock in the annual cycle prior to the most
recent Index measurement date. Companies are weighted in the Index based on
regular cash dividends paid. The Index includes large-capitalization,
mid-capitalization and small-capitalization securities. As of June 30, 2008,
approximately 36% of the Index consisted of companies with market
capitalizations over $10 billion and 44% of the Index consisted of companies
with market capitalizations between $2 and $10 billion.
Primary Investment Risks
You can lose money on your investment in the Fund. For information about the
risks of investing in the Fund, see the sections herein entitled "Principal Risk
Factors Common to All Funds" and "Principal Risk Factors Common to the
International Dividend Funds." In addition, the Fund is subject to the following
potential risks. As with all potential risks, this could decrease the value of
your Fund investment.
66 WisdomTree Trust Prospectus
o Emerging Markets Investing. Investing in securities listed and traded in
emerging markets may be subject to additional risks associated with
emerging market economies. 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. Emerging markets are generally less liquid
and less efficient than developed securities markets.
o Geographic Concentration Risk. To the extent the Fund invests a
significant portion of its assets in the securities of companies of a
single country or region it is more likely to be impacted by events or
conditions affecting that country or region. For example, political and
economic conditions and changes in regulatory, tax, or economic policy in
a country could significantly affect the market in that country and in
surrounding or related countries and have a negative impact on a Fund's
performance. The Fund generally invests a relatively large percentage of
its assets in companies organized in Taiwan, Brazil and South Korea.
o Mid-Capitalization Investing. The Fund generally invests a relatively
large percentage of its assets in securities of mid-capitalization
companies. The securities of mid-capitalization companies may be more
vulnerable to adverse issuer, market, political, or economic developments
than the market as a whole or other types of securities. As a result, the
Fund may be more volatile than funds that invest in larger, more
established companies.
o Basic Materials Investing. The Fund generally invests a relatively large
percentage of its assets in companies in the international Basic Materials
sector. As such, the Fund is more likely to be impacted by risks or events
affecting this sector of the world economy. These risks include but are
not limited to: commodity price volatility, sluggish demand for basic
materials, world economic growth, product liability for environmental
damage, depletion of natural resources, technological progress, and
government regulations.
o Telecommunication Investing. The Fund generally invests a relatively large
percentage of its assets in the telecommunication industry. The
telecommunication industry can be significantly affected by, among other
things, government intervention and regulation, the need for companies to
commit substantial capital to meet increasing competition, particularly in
formulating new products and services using new technology, and
technological innovations that may make the products and services of
telecommunications companies obsolete.
Performance Information
Although the Fund commenced operations on July 13, 2007, no performance
information is presented for the Fund because it has been in operation for less
than one full calendar year. After the first full calendar year, a risk/return
chart and table will be provided. Any past performance of the Fund that will be
shown will not be an indication of future results.
WisdomTree Trust Prospectus 67
Fees and Expenses
The following table describes the fees and expenses you may pay if you buy and
hold shares of the Fund. The fees are expressed as a percentage of the Fund's
average net assets. You may also incur customary brokerage charges when buying
or selling Fund shares.
------------------------------------------------------------------------------------------
Shareholder Fees None
(fees paid directly from your investment, but see the Creation Transaction Fees
and Redemption Transaction Fees section below)
------------------------------------------------------------------------------------------
Annual Fund Operating Expenses (expenses deducted from Fund assets)
------------------------------------------------------------------------------------------
Management Fees 0.63%
------------------------------------------------------------------------------------------
Distribution and/or Service (12b-1) Fees None
------------------------------------------------------------------------------------------
Other Expenses(a) 0.00%
------------------------------------------------------------------------------------------
Total Annual Fund Operating Expenses 0.63%
------------------------------------------------------------------------------------------
(a) WisdomTree Asset Management has agreed to pay all operating expenses of
the Fund, except interest expenses and taxes, brokerage expenses, future
distribution fees or expenses, and extraordinary expenses through July 31,
2009. WisdomTree Asset Management receives a fee of up to .0044% in
exchange for providing certain non-advisory services to the Fund.
The following example is intended to help retail investors compare the cost of
investing in the Fund with the cost of investing in other funds. It illustrates
the hypothetical expenses that such investors would incur over various periods
if they invest $10,000 in the Fund for the time periods indicated and then
redeemed all of the shares at the end of those periods. This example assumes
that the Fund provides a return of 5% a year and that operating expenses remain
the same. This example does not include the brokerage commission that retail
investors may pay to buy and sell shares of the Fund. Although your actual costs
may be higher or lower, based on these assumptions, your costs would be:
------------------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
------------------------------------------------------------------------------------------
$64 $202 $351 $786
------------------------------------------------------------------------------------------
You would pay the following expenses if you did not redeem your shares:
------------------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
------------------------------------------------------------------------------------------
$64 $202 $351 $786
------------------------------------------------------------------------------------------
68 WisdomTree Trust Prospectus
--------------------------------------------------------------------------------
WisdomTree International Dividend Funds
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
WisdomTree Emerging
Markets SmallCap Divided
Fund
Fund Facts
--------------------------------------------------------------------------------
Cusip Number:
o 97717W281
Exchange Trading Symbol:
o DGS
--------------------------------------------------------------------------------
WisdomTree Emerging Markets SmallCap Dividend Fund
Investment Objective
The Fund seeks to track the price and yield performance, before fees and
expenses, of the WisdomTree Emerging Markets SmallCap Dividend Index. Since the
Fund's investment objective has been adopted as a non-fundamental investment
policy, the Fund's investment objective may be changed without a vote of
shareholders.
Primary Investment Strategies
The Fund employs a "passive management"--or indexing--investment approach
designed to track the performance of the WisdomTree Emerging Markets SmallCap
Dividend Index. The Fund attempts to invest all, or substantially all, of its
assets in the stocks that make up the Index. The Fund generally uses a
Representative Sampling strategy to achieve its investment objective.
Index Description
The WisdomTree Emerging Markets SmallCap Dividend Index is a fundamentally
weighted index that measures the performance of primarily small cap stocks
selected from the WisdomTree Emerging Markets Dividend Index. Companies included
in the Index fall within the bottom 10% of total market capitalization of the
WisdomTree Emerging Markets Dividend Index as of the annual index measurement
date. Companies eligible for inclusion in the Index must be incorporated in and
have their shares listed on a major stock exchange in Argentina, Brazil, Chile,
China, Czech Republic, Hungary, India, Indonesia, Israel, Malaysia, Mexico,
Philippines, Poland, Russia, South Africa, South Korea, Taiwan, Thailand or
Turkey. Companies must have paid at least $5 million in cash dividends on their
common stock in the annual cycle prior to the most recent Index measurement
date. Companies are weighted in the Index based on regular cash dividends paid.
The Index is composed of primarily small capitalization stocks. As of June 30,
2008, approximately 70% of the index consisted of companies with a market
capitalization less than $2 billion and approximately 15% of the Index consisted
of companies with a market capitalization between $2.0 billion and $2.5 billion.
Primary Investment Risks
You can lose money on your investment in the Fund. For information about the
risks of investing in the Fund, see the sections herein entitled "Principal Risk
Factors Common to All Funds" and "Principal Risk Factors Common to the
International Dividend Funds." In addition, the Fund is subject to the following
potential risks. As with all potential risks, this could decrease the value of
your Fund investment.
o Emerging Markets Investing. Investing in securities listed and traded in
emerging markets may be subject to additional risks associated with
emerging market economies. Such risks may include: (i) greater market
volatility, (ii) lower trading
WisdomTree Trust Prospectus 69
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. Emerging markets are generally less liquid and less efficient
than developed securities markets.
o Geographic Concentration Risk. To the extent the Fund invests a
significant portion of its assets in the securities of companies of a
single country or region it is more likely to be impacted by events or
conditions affecting that country or region. For example, political and
economic conditions and changes in regulatory, tax, or economic policy in
a country could significantly affect the market in that country and in
surrounding or related countries and have a negative impact on a Fund's
performance. The Fund generally invests a relatively large percentage of
its assets in companies organized in Taiwan, Brazil and South Korea.
o Small-Capitalization Investing. The Fund invests primarily in securities
of small-capitalization companies. As a result, the Fund may be more
volatile than funds that invest in larger, more established companies. The
securities of small-capitalization companies generally trade in lower
volumes and are subject to greater and more unpredictable price changes
than larger capitalization stocks or the stock market as a whole.
Small-capitalization companies may be particularly sensitive to changes in
interest rates, borrowing costs and earnings.
o Industrial Sector Investing. The Fund generally invests a relatively large
percentage of its assets in the industrial sector. This sector can be
significantly affected by, among other things, capital spending levels,
economic cycles, technical obsolescence, labor relations, government
regulations, commodity prices and currency exchange rates.
Performance Information
Although the Fund commenced operations on October 30, 2007, no performance
information is presented for the Fund because it has been in operation for less
than one full calendar year. After the first full calendar year a risk/return
chart and table will be provided. Any past performance of the Fund that will be
shown will not be an indication of future results.
Fees and Expenses
The following table describes the fees and expenses you may pay if you buy and
hold shares of the Fund. The fees are expressed as a percentage of the Fund's
average net assets. You may also incur customary brokerage charges when buying
or selling Fund shares.
----------------------------------------------------------------------------------------------------------------
Shareholder Fees None
(fees paid directly from your investment, but see the Creation Transaction Fees
and Redemption Transaction Fees section below)
----------------------------------------------------------------------------------------------------------------
Annual Fund Operating Expenses (expenses deducted from Fund assets)
----------------------------------------------------------------------------------------------------------------
Management Fees 0.63%
----------------------------------------------------------------------------------------------------------------
Distribution and/or Service (12b-1) Fees None
----------------------------------------------------------------------------------------------------------------
Other Expenses(a) 0.00%
----------------------------------------------------------------------------------------------------------------
Total Annual Fund Operating Expenses 0.63%
----------------------------------------------------------------------------------------------------------------
(a) WisdomTree Asset Management has agreed to pay all operating expenses of
the Fund, except interest expenses and taxes, brokerage expenses, future
distribution fees or expenses, and extraordinary expenses through July 31,
2009. WisdomTree Asset Management receives a fee of up to .0044% in
exchange for providing certain non-advisory services to the Fund.
70 WisdomTree Trust Prospectus
The following example is intended to help retail investors compare the cost of
investing in the Fund with the cost of investing in other funds. It illustrates
the hypothetical expenses that such investors would incur over various periods
if they invest $10,000 in the Fund for the time periods indicated and then
redeemed all of the shares at the end of those periods. This example assumes
that the Fund provides a return of 5% a year and that operating expenses remain
the same. This example does not include the brokerage commission that retail
investors may pay to buy and sell shares of the Fund. Although your actual costs
may be higher or lower, based on these assumptions, your costs would be:
----------------------------------------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
----------------------------------------------------------------------------------------------------------------
$64 $202 $351 $786
----------------------------------------------------------------------------------------------------------------
You would pay the following expenses if you did not redeem your shares:
----------------------------------------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
----------------------------------------------------------------------------------------------------------------
$64 $202 $351 $786
----------------------------------------------------------------------------------------------------------------
WisdomTree Trust Prospectus 71
--------------------------------------------------------------------------------
WisdomTree International Dividend Funds
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
WisdomTree Middle East
Divided Fund
Fund Facts
--------------------------------------------------------------------------------
Cusip Number:
o 97717X305
Exchange Trading Symbol:
o GULF
--------------------------------------------------------------------------------
WisdomTree Middle East Dividend Fund
Investment Objective
The Fund seeks to track the price and yield performance, before fees and
expenses, of the WisdomTree Middle East Dividend Index. Since the Fund's
investment objective has been adopted as a non-fundamental investment policy,
the Fund's investment objective may be changed without a vote of shareholders.
Primary Investment Strategies
The Fund employs a "passive management" -- or indexing -- investment approach
designed to track the performance of the WisdomTree Middle East Dividend Index.
The Fund attempts to invest all, or substantially all, of its assets in the
stocks that make up the Index. The Fund generally uses a Representative Sampling
strategy to achieve its investment objective.
Index Description
The WisdomTree Middle East Dividend Index is a fundamentally weighted index that
measures the performance of companies in the Middle East region that pay regular
cash dividends on shares of their common stock and that meet specified
requirements as of the index measurement date. Companies eligible for inclusion
in the Index must be incorporated in and have their shares listed on a major
stock exchange in Bahrain, Egypt, Jordan, Kuwait, Morocco, Oman, Qatar, or the
United Arab Emirates (including Abu Dhabi and Dubai). As of the index
measurement date, shares of companies must be eligible to be purchased by
foreign investors. Companies must have paid at least $5 million in cash
dividends on their common stock in the annual cycle prior to the most recent
index measurement date. Companies are ranked by market capitalization and the
100 largest companies by market capitalization are selected for inclusion.
Companies are weighted in the Index based on regular cash dividends paid in the
annual cycle prior to the index measurement date. Country weights are capped so
that no country's weight in the Index exceeds 33% at the annual index
measurement date. As of June 30, 2008, approximately 49% of the Index consisted
of companies with market capitalizations over $10 billion and 39% of the Index
consisted of companies with a market capitalization between $2 billion and $10
billion.
Primary Investment Risks
You can lose money on your investment in the Fund. For information about the
risks of investing in the Fund, see the sections herein entitled "Principal Risk
Factors Common to All Funds" and "Principal Risk Factors Common to the
International Dividend Funds." In addition, the Fund is subject to the following
potential risks. As with all potential risks, this could decrease the value of
your Fund investment.
o Geographic Concentration Risk (Middle East). The Fund invests primarily in
Middle Eastern countries. Certain Middle Eastern markets are only in the
earliest stages of development and may be considered "frontier markets."
Financial Markets in the
72 WisdomTree Trust Prospectus
Middle East generally are less liquid and more volatile than other markets
and have a high concentration of market capitalization and trading volume
in a small number of issuers representing a limited number of industries.
Certain economies in the Middle East depend to a significant degree upon
exports of primary commodities such as oil. A sustained decrease in
commodity prices could have a significant negative impact on all aspects
of the economy in the region. Middle Eastern governments have exercised
and continue to exercise substantial influence over many aspects of the
private sector. In certain cases, the government owns or controls many
companies, including the largest in the country. Accordingly, governmental
actions in the future could have a significant effect on economic
conditions in Middle Eastern countries. This could affect private sector
companies and the Fund, as well as the value of securities in the Fund's
portfolio. Further, substantial limitations may exist in certain Middle
Eastern countries with respect to the Fund's ability to protect its legal
interests and its ability to repatriate its investment, investment income
or capital gains. The Fund could be adversely affected by delays in, or a
refusal to grant, any required governmental approval for repatriation of
capital, as well as by the application to the Fund of any restrictions on
investment. Countries in the Middle East may be affected by political
instability, war or the threat of war, regional instability, terrorist
activities and religious, ethnic and/or socioeconomic unrest.
o Frontier Market Investing. The Middle East financial markets generally are
considered to be "frontier markets." The term "frontier markets" is
typically used to describe markets outside of the United States that are
significantly smaller, less developed, less liquid and generally less
accessible and efficient than older, more established markets. Frontier
markets can be volatile and unpredictable. The value of your investment in
the Fund can change quickly and significantly and you may lose money.
Frontier countries may have relatively unstable governments, present the
risk of unanticipated adverse government action and nationalization of
private business enterprises, impose restrictions on foreign ownership or
prohibitions of repatriation of assets, and may have fewer property rights
protections. Frontier market economies may be significantly dependent on
only a few industries, may be more vulnerable to changes in local or
global trade conditions and may face debt burdens or volatile inflation
rates. Local securities markets may trade fewer securities and might not
be able to respond effectively to changes in trading volume, making it
potentially difficult to liquidate substantial holdings promptly - or at
all. In addition, procedures concerning transaction settlement and
dividend collection may be less reliable than in developed markets and
larger emerging markets. Securities of frontier market issuers may have
limited marketability and may be subject to sudden or erratic price
movements. These and other factors make investing in frontier market
countries significantly riskier than investing in developed market or
emerging market countries.
o Telecommunication Investing. The Fund generally invests a relatively large
percentage of its assets in the telecommunication industry. The
telecommunication industry in the Middle East can be significantly
affected by, among other things, commodity prices, government intervention
and regulation, the need for companies to commit substantial capital to
meet increasing competition, particularly in formulating new products and
services using new technology, and technological innovations that may make
the products and services of telecommunications companies obsolete.
o Mid-Capitalization Investing. The Fund invests a relatively large
percentage of its assets in securities of mid-capitalization companies. As
a result, the Fund may be more volatile than funds that invest in larger,
more established companies. The securities of mid-capitalization companies
generally trade in lower volumes and are subject to greater and more
unpredictable price changes than larger capitalization stocks or the stock
market as a whole. Mid-capitalization companies may be particularly
sensitive to changes in interest rates, borrowing costs and earnings.
o Cash Redemption Risk. Unlike most ETFs, the Fund does not generally make
in-kind redemptions because of the nature of its underlying investments.
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 a capital gain that it might not have recognized if it
WisdomTree Trust Prospectus 73
had made a redemption in-kind. As a result, the Fund may pay out higher
annual capital gain distributions than if the in-kind redemption process
was used.
Performance Information
Although the Fund commenced operations on July 16, 2008, no performance
information is presented for the Fund because it has been in operation for less
than one full calendar year. After the first full calendar year a risk/return
chart and table will be provided. Any past performance of the Fund that will be
shown will not be an indication of future results.
Fees and Expenses
The following table describes the fees and expenses you may pay if you buy and
hold shares of the Fund. The fees are expressed as a percentage of the Fund's
average net assets. You may also incur customary brokerage charges when buying
or selling Fund shares.
----------------------------------------------------------------------------------------------------------------
Shareholder Fees None
(fees paid directly from your investment, but see the Creation Transaction Fees
and Redemption Transaction Fees section below)
----------------------------------------------------------------------------------------------------------------
Annual Fund Operating Expenses (expenses deducted from Fund assets)
----------------------------------------------------------------------------------------------------------------
Management Fees 0.68%
----------------------------------------------------------------------------------------------------------------
Distribution and/or Service (12b-1) Fees None
----------------------------------------------------------------------------------------------------------------
Other Expenses(a) 0.20%
----------------------------------------------------------------------------------------------------------------
Total Annual Fund Operating Expenses(b) 0.88%
----------------------------------------------------------------------------------------------------------------
(a) "Other Expenses" are based on estimated amounts for the current fiscal
year.
(b) WisdomTree Asset Management has agreed to limit total expenses to 0.88%
through March 31, 2009.
The following example is intended to help retail investors compare the cost of
investing in the Fund with the cost of investing in other funds. It illustrates
the hypothetical expenses that such investors would incur over various periods
if they invest $10,000 in the Fund for the time periods indicated and then
redeemed all of the shares at the end of those periods. This example assumes
that the Fund provides a return of 5% a year and that operating expenses remain
the same. This example does not include the brokerage commission that retail
investors may pay to buy and sell shares of the Fund. Although your actual costs
may be higher or lower, based on these assumptions, your costs would be:
----------------------------------------------------------------------------------------------------------------
1 Year 3 Years
----------------------------------------------------------------------------------------------------------------
$90 $281
----------------------------------------------------------------------------------------------------------------
You would pay the following expenses if you did not redeem your shares:
----------------------------------------------------------------------------------------------------------------
1 Year 3 Years
----------------------------------------------------------------------------------------------------------------
$90 $281
----------------------------------------------------------------------------------------------------------------
74 WisdomTree Trust Prospectus
Management
Investment Adviser
As investment adviser, WisdomTree Asset Management has overall responsibility
for the general management and administration of the Trust. WisdomTree Asset
Management provides an investment program for each Fund. WisdomTree Asset
Management also arranges for sub-advisory, transfer agency, custody, fund
administration, and all other non-distribution related services necessary for
the Funds to operate.
Under the Investment Advisory Agreement for each Fund (other than the Middle
East Dividend Fund), WisdomTree Asset Management agrees to pay all expenses of
the Trust, except compensation and expenses of the Independent Trustees, counsel
to the Independent Trustees and the Trust's Chief Compliance Officer, interest
expenses and taxes, brokerage expenses, and other expenses connected with the
execution of portfolio transactions, any distribution fees or expenses, legal
fees or expenses and extraordinary expenses. Pursuant to a separate contractual
arrangement, WisdomTree Asset Management arranges for the provision of chief
compliance officer ("CCO") services with respect to each Fund (other than the
Middle East Dividend Fund), and is liable and responsible for, and administers,
payments to the CCO, the Independent Trustees and counsel to the Independent
Trustees.
The basis for the Board of Trustees' approval of the Investment Advisory
Agreement is available in the Trust's Annual Report to Shareholders for the
period ended March 31, 2008.
WisdomTree Asset Management expects to receive fees from each 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 Domestic Dividend Funds
--------------------------------------------------------------------------------
WisdomTree Total Dividend Fund 0.28%
--------------------------------------------------------------------------------
WisdomTree High-Yielding Equity Fund 0.38%
--------------------------------------------------------------------------------
WisdomTree LargeCap Dividend Fund 0.28%
--------------------------------------------------------------------------------
WisdomTree Dividend Top 100 Fund 0.38%
--------------------------------------------------------------------------------
WisdomTree MidCap Dividend Fund 0.38%
--------------------------------------------------------------------------------
WisdomTree SmallCap Dividend Fund 0.38%
--------------------------------------------------------------------------------
WisdomTree International Dividend Funds
--------------------------------------------------------------------------------
WisdomTree DEFA Fund 0.48%
--------------------------------------------------------------------------------
WisdomTree DEFA High-Yielding Equity Fund 0.58%
--------------------------------------------------------------------------------
WisdomTree Europe Total Dividend Fund 0.48%
--------------------------------------------------------------------------------
WisdomTree Europe High-Yielding Equity Fund 0.58%
--------------------------------------------------------------------------------
WisdomTree Europe SmallCap Dividend Fund 0.58%
--------------------------------------------------------------------------------
WisdomTree Japan Total Dividend Fund 0.48%
--------------------------------------------------------------------------------
WisdomTree Japan High-Yielding Equity Fund 0.58%
--------------------------------------------------------------------------------
WisdomTree Japan SmallCap Dividend Fund 0.58%
--------------------------------------------------------------------------------
WisdomTree Pacific ex-Japan Total Dividend Fund 0.48%
--------------------------------------------------------------------------------
WisdomTree Pacific ex-Japan High-Yielding Equity Fund 0.58%
--------------------------------------------------------------------------------
WisdomTree International LargeCap Dividend Fund 0.48%
--------------------------------------------------------------------------------
WisdomTree International Dividend Top 100 Fund 0.58%
--------------------------------------------------------------------------------
WisdomTree International MidCap Dividend Fund 0.58%
--------------------------------------------------------------------------------
WisdomTree International SmallCap Dividend Fund 0.58%
--------------------------------------------------------------------------------
WisdomTree Emerging Markets High-Yielding Equity Fund 0.63%
--------------------------------------------------------------------------------
WisdomTree Emerging Markets SmallCap Dividend Fund 0.63%
--------------------------------------------------------------------------------
WisdomTree Middle East Dividend Fund 0.68%
--------------------------------------------------------------------------------
WisdomTree Trust Prospectus 75
WisdomTree Asset Management is a registered investment adviser with offices
located at 380 Madison Avenue, 21st Floor, New York, NY 10017 and is a leader in
ETF management.
Sub-Adviser
Mellon Capital Management Corporation ("Mellon Capital") serves as sub-adviser
to the Funds. Mellon Capital, a registered investment adviser, is a leading
innovator in the investment industry and manages global quantitative-based
investment strategies for institutional and private investors. Its principal
office is located at 50 Fremont Street, San Francisco, CA 94105. As of June 30,
2008, Mellon Capital had assets under management totaling approximately $204
billion. Mellon Capital is a wholly-owned indirect subsidiary of The Bank of New
York Mellon Corporation, a publicly traded financial holding company. Mellon
Capital chooses each Fund's portfolio investments and places orders to buy and
sell the Funds' portfolio investments. BNY Investment Advisors ("BNYIA")
previously served as sub-adviser to the Funds. In connection with the recent
merger between The Bank of New York Company, Inc. and Mellon Financial
Corporation BNYIA was integrated with its affiliate, Mellon Capital. As part of
the integration, BNYIA transferred, and Mellon Capital assumed, full
responsibility of the Sub-Advisory Agreement between BNYIA and WisdomTree Asset
Management effective July 2008. WisdomTree Asset Management pays Mellon Capital
for providing sub-advisory services to the Funds in accordance with the table
set forth below.
The Sub-Adviser is entitled to receive the fees indicated below for acting as
Sub-Adviser to the Domestic Funds:
o 3 basis points (0.03%) of the first $2 billion in combined daily net
assets of all Domestic Funds;
o 2 basis points (0.02%) of the next $3 billion in combined daily net
assets of all Domestic Funds; and
o 1.5 basis points (0.015%) of the combined daily net assets of all
Domestic Funds in excess of $5 billion.
The Sub-Adviser is entitled to receive the fees indicated below for acting as
Sub-Adviser to the International Funds:
o 7.5 basis points (0.075%) of the first $1 billion in combined daily
net assets of all International Equity Funds;
o 5 basis points (0.05%) of the next $1 billion in combined daily net
assets of all International Equity Funds;
o 3 basis points (0.03%) of the next $3 billion in combined daily net
assets of all International Equity Funds; and
o 2 basis points (0.02%) of the combined daily net assets of all
International Equity Funds in excess of $5 billion.
Portfolio Managers
Each Fund is managed by Mellon Capital's Equity Index Strategies Portfolio
management team. The individual members of the team responsible for the
day-to-day management of the Funds' portfolios are described below.
Denise Krisko is a Managing Director, Co-Head of the Equity Index Management and
Head of East Coast Equity Index Strategies for Mellon Capital. She was also a
Managing Director of The Bank of New York and Head of Equity Index Strategies
for BNY Investment Advisors since August of 2005. Prior to joining The Bank of
New York, from 2000 to 2004, Ms. Krisko held various senior investment positions
with Deutsche Asset Management and Northern Trust, including quantitative
strategies director, senior portfolio manager and trader. Ms. Krisko has over 15
years of investment experience.
Steven Wetter is a Vice President, Senior Portfolio Manager of Equity Index
Strategies. He obtained his M.B.A. from New York University, Stern School of
Business. Prior to joining The Bank of New York, he worked as portfolio manager
and trader at Bankers Trust and continued in that role after the division was
sold to Deutsche Bank in 1999 and then to Northern Trust in 2003. Mr. Wetter has
20 years of investment experience.
The Trust's Statement of Additional Information ("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 Funds for which they are Portfolio Managers.
76 WisdomTree Trust Prospectus
Portfolio Holdings Information
Information about each Fund's daily portfolio holdings is available at
www.wisdomtree.com. In addition, each Fund discloses its complete portfolio
holdings as of the end of its fiscal year (March 31) and its second fiscal
quarter (September 30) in its reports to shareholders. Each Fund files its
complete portfolio holdings as of the end of its first and third fiscal quarters
(June 30 and December 31, respectively) with the SEC on Form N-Q no later than
60 days after the relevant fiscal period. You can find the SEC filings on the
SEC's website, www.sec.gov. A summarized description of the Funds' policies and
procedures with respect to the disclosure of each Fund's portfolio holdings is
available in the Trust's SAI.
Buying and Selling Shares
Most investors will buy and sell shares of the Funds through brokers. Shares of
the Funds trade on national securities exchanges 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.
Shares of the Funds trade under the trading symbols listed for each respective
Fund in the section describing such Fund.
Shares of the Funds may be acquired or redeemed directly from a Fund only in
Creation Units or multiples thereof, as discussed in the Creation and Redemption
section. Once created, shares of the Funds trade in the secondary market in
amounts less than a Creation Unit.
Share Trading Prices
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.
The approximate value of shares of each Fund is disseminated every fifteen
seconds throughout the trading day by the national securities exchange on which
such Fund is listed or by other information providers. This approximate value
should not be viewed as a "real-time" update of the NAV, because the approximate
value may not be calculated in the same manner as the NAV, which is computed
once per day. The approximate value generally is determined by using current
market quotations and/or price quotations obtained from broker-dealers that may
trade in the portfolio securities held by the Funds. The Funds are not involved
in, or responsible for, the calculation or dissemination of the approximate
value and make no warranty as to its accuracy.
Determination of Net Asset Value
The NAV of each Fund's shares is calculated each day the national securities
exchanges are open for trading as of the close of regular trading on the New
York Stock Exchange, generally 4:00 p.m. New York time (the "NAV Calculation
Time"). NAV per share is calculated by dividing a Fund's net assets by the
number of Fund shares outstanding.
Stocks held by a Fund are valued at their market value when reliable market
quotations are readily available. Certain short-term debt instruments, which may
be used to manage a Fund's cash, are valued on the basis of amortized cost. The
values of any foreign securities held by a Fund are converted into U.S. dollars
using an exchange rate deemed appropriate by the Fund.
When reliable market quotations are not readily available, securities are priced
at their fair value, which is the price a security's owner might reasonably
expect to receive upon its sale. A Fund may also use fair-value pricing if the
value of a security it holds has been materially affected by events occurring
before the Fund's pricing time but after the close of the primary markets or
exchanges on which the security is traded. For example, this may occur with
foreign securities, which may trade on foreign exchanges that close many hours
before the Fund's pricing time. Intervening events might be company-specific
(e.g., earnings report, merger announcement), country-specific (e.g., natural
disaster, economic or political news, act of terrorism,
WisdomTree Trust Prospectus 77
interest rate change), or global. Intervening events may include price movements
in U.S. markets that are deemed to affect the value of foreign securities.
Fair-value pricing also may be used if, for example, trading in a security is
halted and does not resume before the Fund's pricing time or if a security does
not trade in the course of a day. Since the International Equity Funds invest in
securities listed on foreign exchanges that trade on weekends or other days when
the Funds do not price their shares, the NAV of these Funds may change on days
when shareholders will not be able to purchase or redeem the Funds' shares.
Fair-value prices are determined by the Funds according to procedures adopted by
the Board of Trustees. When fair-value pricing is employed, the prices of
securities used by a Fund to calculate its NAV may differ from quoted or
published prices for the same securities.
Transactions in Fund shares will be priced at NAV only if you purchase or redeem
shares directly from a Fund in Creation Units. Fund shares are purchased or sold
on a national securities exchange at market prices, which may be higher or lower
than NAV.
Dividends and Distributions
Each Fund pays out dividends, if any, to investors at least annually. Each Fund
distributes its net realized capital gains, if any, to investors annually. The
Funds 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.
Book Entry
Shares of the Funds 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 each Fund.
Investors owning shares of the Funds are beneficial owners as shown on the
records of DTC or its participants. DTC serves as the securities depository for
all shares of the Funds. 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.
Delivery of Shareholder Documents - Householding
Householding is an option available to certain investors of the Funds.
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 Funds 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 Funds have adopted policies and procedures with respect to frequent
purchases and redemptions of Creation Units of Fund shares. Since the Funds are
ETFs, only a few institutional investors (known as "Authorized Participants")
are authorized to purchase and redeem shares directly with the Funds. Because
purchase and redemption transactions with Authorized
78 WisdomTree Trust Prospectus
Participants are an essential part of the ETF process and help keep ETF trading
prices in line with NAV, each Fund accommodates frequent purchases and
redemptions by Authorized Participants. Frequent purchases and redemptions for
cash may increase index tracking error and portfolio transaction costs and may
lead to realization of capital gains. Frequent in-kind creations and redemptions
do not give rise to these concerns. Each Fund reserves the right to reject any
purchase order at any time. Each Fund reserves the right to impose restrictions
on disruptive, excessive, or short-term trading and may reject purchase or
redemption orders in such instances.
Investments by Registered Investment Companies
Section 12(d)(1) of the Investment Company Act of 1940 restricts investments by
registered investment companies in the securities of other investment companies,
including shares of each Fund. Registered investment companies are permitted to
invest in the Funds beyond the limits set forth in section 12(d)(1), subject to
certain terms and conditions set forth in an SEC exemptive order issued to the
WisdomTree Trust, including that such investment companies enter into an
agreement with the Funds.
Taxes
The following discussion is a summary of some important U.S. federal income tax
considerations generally applicable to investments in the Funds. Your investment
in a 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.
Each Fund intends to qualify each year as a regulated investment company. A
regulated investment company is not subject to tax at the fund level on income
and gains from investments that are timely distributed to shareholders. However,
a Fund's failure to qualify as a regulated investment company would result in
fund-level taxation, and consequently, a reduction in income available for
distribution to shareholders.
Unless your investment in shares is made through a tax-exempt entity or
tax-deferred retirement account, such as an individual retirement account, you
need to be aware of the possible tax consequences when:
o A Fund makes distributions,
o You sell shares, and
o You purchase or redeem Creation Units (for institutional investors
only).
Taxes on Distributions
For federal income tax purposes, distributions of investment income are
generally taxable as ordinary income. Taxes on distributions of capital gains
(if any) are determined by how long a Fund owned the investments that generated
them, rather than how long you have owned your Fund shares. Distributions of net
capital gains (the excess of net long-term capital gains from the sale of
investments that a Fund owned for more than one year over net short-term capital
losses) that are properly designated by the Fund as capital gain dividends
("Capital Gain Dividends") will be taxable as long-term capital gains. Long-term
capital gain rates have been temporarily reduced - in general, to 15%, with
lower rates applying to taxpayers in the 10% and 15% rate brackets - for taxable
years beginning before January 1, 2011. Distributions of gains from the sale of
investments that a Fund owned for one year or less will be taxable as ordinary
income.
For taxable years beginning before January 1, 2011, distributions of investment
income designated by a Fund as derived from "qualified dividend income" are
taxed to individuals at rates applicable to long-term capital gain, provided
holding period and other requirements are met at both the shareholder and the
Fund level.
WisdomTree Trust Prospectus 79
In general, your distributions are subject to federal income tax for the year in
which they are paid. Certain distributions paid in January, however, may be
treated as paid on December 31 of the prior year. Distributions are taxable even
if they are paid from income or gains earned by a Fund before your investment
(and thus were included in the price you paid for your shares).
Dividends, interest and gains received by a Fund with respect to foreign
securities may be subject to withholding and other taxes imposed by foreign
countries, which may reduce amounts available for distribution to you and
returns to you from a Fund. Tax conventions between certain countries and the
United States may, in some cases, reduce or eliminate such taxes. Because more
than 50% of the total assets of each of the International Dividend Funds consist
of foreign stocks or securities, those Funds intend to "pass through" to you
certain foreign income taxes (including withholding taxes) paid by those Funds.
This means that you will be considered to have received as an additional
dividend your share of such foreign taxes, but you may be entitled to either a
corresponding tax deduction or a credit in calculating your federal income tax.
If you are neither a resident nor a citizen of the United States or if you are a
foreign entity, dividends (other than Capital Gain Dividends) paid to you by the
Funds will generally be subject to a 30% U.S. withholding tax, unless a lower
treaty rate applies.
The Funds (or financial intermediaries, such as brokers, through which a
shareholder owns Fund shares) generally are required to withhold and 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.
Taxes When Fund Shares are Sold
Any capital gain or loss realized upon a sale of Fund shares is generally
treated as a long-term gain or loss if the shares have been held 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
long-term capital loss to the extent that capital gain dividends were paid with
respect to such shares. The ability to deduct capital losses may be limited.
Taxes on Creation and Redemption of Creation Units
An Authorized Participant who exchanges securities for Creation Units generally
will recognize a gain or a loss equal to the difference between the market value
of the Creation Units at the time of the exchange and the sum of the exchanger's
aggregate basis in the securities surrendered and the cash component paid. 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 market value of the securities and the amount of cash
received for such Creation Units. The Internal Revenue Service, however, may
assert that a loss realized upon an exchange of securities for Creation Units
cannot be deducted currently under the rules governing "wash sales," or on the
basis that there has been no significant change in economic position. Persons
exchanging securities for Creation Units should consult a tax advisor with
respect to whether wash sale rules apply and when a loss might be deductible.
Any capital gain or loss realized upon a redemption (or creation) of Creation
Units is generally treated as long-term capital gain or loss if the Fund shares
(or securities surrendered) have been held for more than one year and as
short-term capital gain or loss if the shares (or securities surrendered) have
been held for one year or less.
If you purchase or redeem Creation Units, you will be sent a confirmation
statement showing how many shares you purchased or sold and at what price.
Persons purchasing or redeeming Creation Units should consult their own tax
advisors with respect to the tax treatment of any creation or redemption
transaction.
80 WisdomTree Trust Prospectus
Creation and Redemption
The shares that trade in the secondary market are "created" at NAV. Each Fund
issues and redeems shares only in large blocks of shares, typically 50,000
shares or more ("Creation Units"). Only institutional investors who have entered
into an authorized participant agreement purchase or redeem Creation Units.
Creation Units generally are issued and redeemed in exchange for a specified
basket of securities approximating the holdings of a Fund and a designated
amount of cash. Each business day prior to the opening of trading each Fund
publishes the specific securities and designated amount of cash included in that
day's basket for the Fund through the National Securities Clearing Corporation
("NSCC") or other method of public dissemination. Each Fund reserves the right
to accept or pay out a basket of securities or cash that differs from the
published basket. The Middle East Dividend Fund intends to issue and redeem
Creation Units solely for cash. The prices at which creations and redemptions
occur are based on the next calculation of NAV after an order is received in
proper form.
Creations and redemptions must be made by an Authorized Participant or through a
firm that is either a member of the Continuous Net Settlement System of the NSCC
or a DTC participant, and in each case, must have executed an agreement with the
Distributor with respect to creations and redemptions of Creation Unit
aggregations. Information about the procedures regarding creation and redemption
of Creation Units is included in the Trust's SAI.
Authorized Participants and the Continuous Offering of Shares
Because new shares may be created and issued on an ongoing basis, at any point
during the life of a Fund, a "distribution," as such term is used in the
Securities Act of 1933 ("Securities Act"), may be occurring. 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 that could render them statutory underwriters and subject to the
prospectus-delivery and liability provisions of the Securities Act. Nonetheless,
any determination of whether one is an underwriter must take into account all
the relevant facts and circumstances of each particular case.
Broker-dealers should also note that dealers who are not "underwriters," but are
participating in a distribution (as contrasted to ordinary secondary
transactions), and thus dealing with shares that are part of an "unsold
allotment" within the meaning of Section 4(3)(C) of the Securities Act, would be
unable to take advantage of the prospectus delivery exemption provided by
Section 4(3) of the Securities Act. For delivery of prospectuses to exchange
members, the prospectus delivery mechanism of Rule 153 under the Securities Act
is only available with respect to transactions on a national securities
exchange.
Creation and Redemption Transaction Fees for Creation Units
Each Fund may impose a creation transaction fee and a redemption transaction fee
to offset transfer and other transaction costs associated with the issuance and
redemption of Creation Units of shares. The creation and redemption transaction
fees applicable to each Fund are listed below. The standard creation transaction
fee is charged to each purchaser on the day such purchaser creates a Creation
Unit. The standard fee is a single charge and will be the amount indicated below
regardless of the number of Creation Units purchased by an investor on the same
day. Similarly, the standard redemption transaction fee will be the amount
indicated regardless of the number of Creation Units redeemed that day.
Purchasers and redeemers of Creation Units of a Fund for cash (other than the
Middle East Dividend Fund) will also be subject to an additional variable charge
of up to a maximum of four times the amount shown below under "Maximum
Creation/Redemption Transaction Fee" to offset the transaction cost to the Fund
of buying portfolio securities. In addition, purchasers and redeemers of shares
in Creation Units are responsible for payment of the costs of transferring
securities to or out of a Fund. From time to time, WisdomTree Asset Management
may cover the cost of any transaction fees.
WisdomTree Trust Prospectus 81
The following table also shows, as of July 1, 2008, the approximate value of one
Creation Unit per Fund, including the standard creation and redemption
transaction fee. These fees are payable only by investors who purchase shares
directly from a Fund. Retail investors who purchase shares through their
brokerage account will not pay these fees.
--------------------------------------------------------------------------------------------------------------
Approximate Standard Creation/ Maximum Creation/
Value of One Redemption Redemption
Name of Fund Creation Unit Transaction Fee Transaction Fee
--------------------------------------------------------------------------------------------------------------
WisdomTree Domestic Dividend Funds
--------------------------------------------------------------------------------------------------------------
WisdomTree Total Dividend Fund $ 3,000,000 $ 4,000 $ 8,500
--------------------------------------------------------------------------------------------------------------
WisdomTree High-Yielding Equity Fund $ 3,000,000 $ 2,200 $ 2,500
--------------------------------------------------------------------------------------------------------------
WisdomTree LargeCap Dividend Fund $ 3,000,000 $ 1,500 $ 2,000
--------------------------------------------------------------------------------------------------------------
WisdomTree Dividend Top 100 Fund $ 3,000,000 $ 500 $ 600
--------------------------------------------------------------------------------------------------------------
WisdomTree MidCap Dividend Fund $ 3,000,000 $ 2,500 $ 3,000
--------------------------------------------------------------------------------------------------------------
WisdomTree SmallCap Dividend Fund $ 3,000,000 $ 4,000 $ 4,500
--------------------------------------------------------------------------------------------------------------
WisdomTree International Dividend Funds
--------------------------------------------------------------------------------------------------------------
WisdomTree DEFA Fund $ 17,000,000 $ 15,000 $ 50,000
--------------------------------------------------------------------------------------------------------------
WisdomTree DEFA High-Yielding Equity Fund $ 7,000,000 $ 9,500 $ 20,000
--------------------------------------------------------------------------------------------------------------
WisdomTree Europe Total Dividend Fund $ 7,000,000 $ 7,500 $ 25,000
--------------------------------------------------------------------------------------------------------------
WisdomTree Europe High-Yielding Equity Fund $ 7,000,000 $ 2,500 $ 7,500
--------------------------------------------------------------------------------------------------------------
WisdomTree Europe SmallCap Dividend Fund $ 7,000,000 $ 10,000 $ 11,000
--------------------------------------------------------------------------------------------------------------
WisdomTree Japan Total Dividend Fund $ 6,000,000 $ 4,000 $ 10,000
--------------------------------------------------------------------------------------------------------------
WisdomTree Japan High-Yielding Equity Fund $ 6,000,000 $ 2,500 $ 3,500
--------------------------------------------------------------------------------------------------------------
WisdomTree Japan SmallCap Dividend Fund $ 5,000,000 $ 5,000 $ 6,000
--------------------------------------------------------------------------------------------------------------
WisdomTree Pacific ex-Japan Total Dividend Fund $ 7,000,000 $ 8,000 $ 18,500
--------------------------------------------------------------------------------------------------------------
WisdomTree Pacific ex-Japan High-Yielding Equity Fund $ 7,000,000 $ 3,500 $ 4,500
--------------------------------------------------------------------------------------------------------------
WisdomTree International LargeCap Dividend Fund $ 7,000,000 $ 6,000 $ 8,000
--------------------------------------------------------------------------------------------------------------
WisdomTree International Dividend Top 100 Fund $ 7,000,000 $ 2,500 $ 3,500
--------------------------------------------------------------------------------------------------------------
WisdomTree International MidCap Dividend Fund $ 7,000,000 $ 8,000 $ 20,000
--------------------------------------------------------------------------------------------------------------
WisdomTree International SmallCap Dividend Fund $ 7,000,000 $ 10,000 $ 25,000
--------------------------------------------------------------------------------------------------------------
WisdomTree Emerging Markets High-Yielding Equity Fund $ 5,000,000 $ 9,000 $ 27,000
--------------------------------------------------------------------------------------------------------------
WisdomTree Emerging Markets SmallCap Dividend Fund $ 5,000,000 $ 7,000 $ 21,000
--------------------------------------------------------------------------------------------------------------
WisdomTree Middle East Dividend Fund $ 2,500,000 $ 6,500 $ 26,000
--------------------------------------------------------------------------------------------------------------
Distribution
ALPS Distributors, Inc. (the "Distributor") serves as the distributor of
Creation Units for each Fund on an agency basis. The Distributor does not
maintain a secondary market in shares of the Funds. The Distributor's principal
address is 1290 Broadway, Suite 1100, Denver, Colorado 80203.
The Distributor has no role in determining the policies of any Fund or the
securities that are purchased or sold by any Fund.
82 WisdomTree Trust Prospectus
Additional Notices
Shares of the Trust are not sponsored, endorsed, or promoted by any listing
exchange ("Exchange"). The Exchange makes no representation or warranty, express
or implied, to the owners of the shares of any Fund or any member of the public
regarding the ability of a fund to track the total return performance of any
Index or the ability of any Index identified herein to track stock market
performance. The Exchange is not responsible for, nor has it participated in,
the determination of the compilation or the calculation of any Index, nor in the
determination of the timing of, prices of, or quantities of the shares of any
Fund to be issued, nor in the determination or calculation of the equation by
which the shares are redeemable. The Exchange has no obligation or liability to
owners of the shares of any Fund in connection with the administration,
marketing, or trading of the shares of the Fund.
The Exchange does not guarantee the accuracy and/or the completeness of any
Index or any data included therein. The Exchange makes no warranty, express or
implied, as to results to be obtained by the WisdomTree Trust on behalf of its
Funds, owners of the shares, or any other person or entity from the use of the
subject Indexes or any data included therein. The Exchange makes no express or
implied warranties, and hereby expressly disclaims all warranties of
merchantability or fitness for a particular purpose with respect to any Index or
any data included therein. Without limiting any of the foregoing, in no event
shall the Exchange have any liability for any lost profits or indirect,
punitive, special, or consequential damages even if notified of the possibility
thereof.
WisdomTree Investments, WisdomTree Asset Management and the Funds make no
representation or warranty, express or implied, to the owners of shares of the
Funds or any member of the public regarding the advisability of investing in
securities generally or in the Funds particularly or the ability of the Indexes
to track general stock market performance. WisdomTree Investments is the
licensor of certain trademarks, service marks and trade names of the Funds.
WisdomTree Investments has no obligation to take the needs of the Funds or the
owners of shares of the Funds into consideration in determining, composing, or
calculating the Indexes. WisdomTree Investments is not responsible for and has
not participated in the determination of the timing of, prices at, or quantities
of shares of the Funds to be issued or in the determination or calculation of
the equation by which the shares of the Funds are redeemable.
The Funds, WisdomTree Investments and WisdomTree Asset Management do not
guarantee the accuracy, completeness, or performance of any Index or the data
included therein and shall have no liability in connection with any Index or
Index calculation. WisdomTree Investments has contracted with Standard & Poor's
("S&P") to calculate certain indexes used by the Funds. S&P shall have no
liability for any errors or omissions in calculating any Index.
Financial Highlights
The financial highlights table is intended to help you understand each Fund's
financial performance since inception. The total return in the table represents
the rate that an investor would have earned (or lost) on an investment in the
respective Fund (assuming reinvestment of all dividends and distributions). This
information has been derived from the financial statements audited by Ernst &
Young LLP, independent registered public accounting firm, whose report, along
with the Funds' financial statements, are included in the Funds' Annual Report,
which is available upon request. Financial Highlights are not presented for the
WisdomTree Middle East Dividend Fund since the Fund did not commence operations
until July 2008 and was not included in the Annual Report.
WisdomTree Trust Prospectus 83
Financial Highlights
WisdomTree Domestic Dividend Funds
Selected data for a share of beneficial interest outstanding throughout the
indicated period is presented below:
----------------------------------------------------------------------------------------
For the period
For the June 16, 2006(1)
Year Ended through
WisdomTree Total Dividend Fund March 31, 2008 March 31, 2007
----------------------------------------------------------------------------------------
Net asset value, beginning of period $ 57.87 $ 50.32
----------------------------------------------------------------------------------------
Investment operations:
Net investment income(2) 1.68 1.18
Net realized and unrealized gain (loss) (6.04) 7.28
----------------------------------------------------------------------------------------
Total from investment operations (4.36) 8.46
----------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Net investment income (1.68) (0.91)
Capital gains (0.02) --
----------------------------------------------------------------------------------------
Total dividends and distributions to shareholders (1.70) (0.91)
----------------------------------------------------------------------------------------
Net asset value, end of period $ 51.81 $ 57.87
----------------------------------------------------------------------------------------
TOTAL RETURN(3) (7.77)% 16.84%
----------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted) $ 88,071 $ 89,698
Ratio to average net assets of:
Expenses, net of expense reimbursements/waivers 0.28% 0.28%(4)
Expenses, prior to expense reimbursements/waivers 0.28% 0.31%(4)
Net investment income 2.89% 2.76%(4)
----------------------------------------------------------------------------------------
Portfolio turnover rate(5) 10% 12%
----------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------
For the period
For the June 16, 2006(1)
Year Ended through
WisdomTree High-Yielding Equity Fund March 31, 2008 March 31, 2007
----------------------------------------------------------------------------------------
Net asset value, beginning of period $ 57.99 $ 50.01
----------------------------------------------------------------------------------------
Investment operations:
Net investment income(2) 2.22 1.56
Net realized and unrealized gain (loss) (10.19) 7.54
----------------------------------------------------------------------------------------
Total from investment operations (7.97) 9.10
----------------------------------------------------------------------------------------
Dividends to shareholders:
Net investment income (2.21) (1.12)
----------------------------------------------------------------------------------------
Total dividends to shareholders (2.21) (1.12)
----------------------------------------------------------------------------------------
Net asset value, end of period $ 47.81 $ 57.99
----------------------------------------------------------------------------------------
TOTAL RETURN(3) (14.18)% 18.23%
----------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted) $ 138,659 $ 205,874
Ratio to average net assets of:
Expenses, net of expense reimbursements/waivers 0.38% 0.38%(4)
Expenses, prior to expense reimbursements/waivers 0.38% 0.40%(4)
Net investment income 3.88% 3.68%(4)
----------------------------------------------------------------------------------------
Portfolio turnover rate(5) 19% 11%
----------------------------------------------------------------------------------------
(1) Commencement of investment operations.
(2) Based on average shares outstanding.
(3) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all dividends
and distributions at net asset value during the period and redemption on
the last day of the period. Total return calculated for a period of less
than one year is not annualized. The total return would have been lower if
certain expenses had not been reimbursed/waived by the investment adviser.
(4) Annualized.
(5) Portfolio turnover rate is not annualized and excludes the value of
portfolio securities received or delivered as a result of in-kind
creations or redemptions of the Fund's shares.
84 WisdomTree Trust Prospectus
Financial Highlights
WisdomTree Domestic Dividend Funds
Selected data for a share of beneficial interest outstanding throughout the
indicated period is presented below:
----------------------------------------------------------------------------------------
For the period
For the June 16, 2006(1)
Year Ended through
WisdomTree LargeCap Dividend Fund March 31, 2008 March 31, 2007
----------------------------------------------------------------------------------------
Net asset value, beginning of period $ 57.97 $ 50.34
----------------------------------------------------------------------------------------
Investment operations:
Net investment income(2) 1.60 1.11
Net realized and unrealized gain (loss) (5.21) 7.32
----------------------------------------------------------------------------------------
Total from investment operations (3.61) 8.43
----------------------------------------------------------------------------------------
Dividends to shareholders:
Net investment income (1.65) (0.80)
----------------------------------------------------------------------------------------
Total dividends to shareholders (1.65) (0.80)
----------------------------------------------------------------------------------------
Net asset value, end of period $ 52.71 $ 57.97
----------------------------------------------------------------------------------------
TOTAL RETURN(3) (6.47)% 16.77%
----------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted) $ 308,379 $ 333,339
Ratio to average net assets of:
Expenses, net of expense reimbursements/waivers 0.28% 0.28%(4)
Expenses, prior to expense reimbursements/waivers 0.28% 0.29%(4)
Net investment income 2.74% 2.65%(4)
----------------------------------------------------------------------------------------
Portfolio turnover rate(5) 8% 13%
----------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------
For the period
For the June 16, 2006(1)
Year Ended through
WisdomTree Dividend Top 100 Fund March 31, 2008 March 31, 2007
----------------------------------------------------------------------------------------
Net asset value, beginning of period $ 59.69 $ 50.12
----------------------------------------------------------------------------------------
Investment operations:
Net investment income(2) 2.10 1.40
Net realized and unrealized gain (loss) (8.56) 9.09
----------------------------------------------------------------------------------------
Total from investment operations (6.46) 10.49
----------------------------------------------------------------------------------------
Dividends to shareholders:
Net investment income (2.09) (0.92)
----------------------------------------------------------------------------------------
Total dividends to shareholders (2.09) (0.92)
----------------------------------------------------------------------------------------
Net asset value, end of period $ 51.14 $ 59.69
----------------------------------------------------------------------------------------
TOTAL RETURN(3) (11.15)% 20.99%
----------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted) $ 166,205 $ 188,009
Ratio to average net assets of:
Expenses, net of expense reimbursements/waivers 0.38% 0.38%(4)
Expenses, prior to expense reimbursements/waivers 0.38% 0.40%(4)
Net investment income 3.57% 3.29%(4)
----------------------------------------------------------------------------------------
Portfolio turnover rate(5) 16% 21%
----------------------------------------------------------------------------------------
(1) Commencement of investment operations.
(2) Based on average shares outstanding.
(3) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all dividends
and distributions at net asset value during the period and redemption on
the last day of the period. Total return calculated for a period of less
than one year is not annualized. The total return would have been lower if
certain expenses had not been reimbursed/waived by the investment adviser.
(4) Annualized.
(5) Portfolio turnover rate is not annualized and excludes the value of
portfolio securities received or delivered as a result of in-kind
creations or redemptions of the Fund's shares.
WisdomTree Trust Prospectus 85
Financial Highlights
WisdomTree Domestic Dividend Funds
Selected data for a share of beneficial interest outstanding throughout the
indicated period is presented below:
-------------------------------------------------------------------------------------------------------
For the period
For the June 16, 2006(1)
Year Ended through
WisdomTree MidCap Dividend Fund March 31, 2008 March 31, 2007
-------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 58.02 $ 50.21
-------------------------------------------------------------------------------------------------------
Investment operations:
Net investment income(2) 1.88 1.45
Net realized and unrealized gain (loss) (10.12) 7.41
-------------------------------------------------------------------------------------------------------
Total from investment operations (8.24) 8.86
-------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Net investment income (1.78) (1.04)
Capital gains -- (0.01)
-------------------------------------------------------------------------------------------------------
Total dividends and distributions to shareholders (1.78) (1.05)
-------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 48.00 $ 58.02
-------------------------------------------------------------------------------------------------------
TOTAL RETURN(3) (14.47)% 17.71%
-------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted) $ 91,198 $ 78,333
Ratio to average net assets of:
Expenses, net of expense reimbursements/waivers 0.38% 0.38%(4)
Expenses, prior to expense reimbursements/waivers 0.38% 0.43%(4)
Net investment income 3.38% 3.47%(4)
-------------------------------------------------------------------------------------------------------
Portfolio turnover rate(5) 30% 12%
-------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------
For the period
For the June 16, 2006(1)
Year Ended through
WisdomTree SmallCap Dividend Fund March 31, 2008 March 31, 2007
-------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 57.41 $ 50.24
-------------------------------------------------------------------------------------------------------
Investment operations:
Net investment income(2) 2.13 1.79
Net realized and unrealized gain (loss) (11.10) 6.65
-------------------------------------------------------------------------------------------------------
Total from investment operations (8.97) 8.44
-------------------------------------------------------------------------------------------------------
Dividends to shareholders:
Net investment income (2.13) (1.27)
-------------------------------------------------------------------------------------------------------
Total dividends to shareholders (2.13) (1.27)
-------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 46.31 $ 57.41
-------------------------------------------------------------------------------------------------------
TOTAL RETURN(3) (15.93)% 16.88%
-------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted) $ 81,040 $ 111,948
Ratio to average net assets of:
Expenses, net of expense reimbursements/waivers 0.38% 0.38%(4)
Expenses, prior to expense reimbursements/waivers 0.38% 0.42%(4)
Net investment income 3.97% 4.25%(4)
-------------------------------------------------------------------------------------------------------
Portfolio turnover rate(5) 34% 16%
-------------------------------------------------------------------------------------------------------
(1) Commencement of investment operations.
(2) Based on average shares outstanding.
(3) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all dividends
and distributions at net asset value during the period and redemption on
the last day of the period. Total return calculated for a period of less
than one year is not annualized. The total return would have been lower if
certain expenses had not been reimbursed/waived by the investment adviser.
(4) Annualized.
(5) Portfolio turnover rate is not annualized and excludes the value of
portfolio securities received or delivered as a result of in-kind
creations or redemptions of the Fund's capital shares.
86 WisdomTree Trust Prospectus
Financial Highlights
WisdomTree International Dividend Funds
Selected data for a share of beneficial interest outstanding throughout the
indicated period is presented below:
-------------------------------------------------------------------------------------------------------
For the Period
For the June 16, 2006(1)
Year Ended through
WisdomTree DEFA Fund March 31, 2008 March 31, 2007
-------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 64.15 $ 49.94
-------------------------------------------------------------------------------------------------------
Investment operations:
Net investment income(2) 1.70 0.86
Net realized and unrealized gain (loss) (1.92) 13.58
-------------------------------------------------------------------------------------------------------
Total from investment operations (0.22) 14.44
-------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Net investment income (0.91) (0.21)
Capital gains (0.00)(3) (0.02)
-------------------------------------------------------------------------------------------------------
Total dividends and distributions to shareholders (0.91) (0.23)
-------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 63.02 $ 64.15
-------------------------------------------------------------------------------------------------------
TOTAL RETURN(4) (0.44)% 28.94%
-------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted) $ 425,386 $ 128,303
Ratio to average net assets of:
Expenses, net of expense reimbursements/waivers 0.48% 0.48%(5)
Expenses, prior to expense reimbursements/waivers 0.48% 0.51%(5)
Net investment income 2.54% 1.97%(5)
-------------------------------------------------------------------------------------------------------
Portfolio turnover rate(6) 10% 11%
-------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------
For the Period
For the June 16, 2006(1)
Year Ended through
WisdomTree DEFA High-Yielding Equity Fund March 31, 2008 March 31, 2007
-------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 63.62 $ 49.77
-------------------------------------------------------------------------------------------------------
Investment operations:
Net investment income(2) 2.20 1.19
Net realized and unrealized gain (loss) (3.78) 12.94
-------------------------------------------------------------------------------------------------------
Total from investment operations (1.58) 14.13
-------------------------------------------------------------------------------------------------------
Dividends to shareholders:
Net investment income (1.94) (0.28)
-------------------------------------------------------------------------------------------------------
Total dividends to shareholders (1.94) (0.28)
-------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 60.10 $ 63.62
-------------------------------------------------------------------------------------------------------
TOTAL RETURN(4) (2.72)% 28.41%
-------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted) $ 240,408 $ 184,498
Ratio to average net assets of:
Expenses, net of expense reimbursements/waivers 0.58% 0.58%(5)
Expenses, prior to expense reimbursements/waivers 0.58% 0.61%(5)
Net investment income 3.32% 2.71%(5)
-------------------------------------------------------------------------------------------------------
Portfolio turnover rate(6) 16% 19%
-------------------------------------------------------------------------------------------------------
(1) Commencement of investment operations.
(2) Based on average shares outstanding.
(3) Amount is less than $0.005.
(4) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all dividends
and distributions at net asset value during the period and redemption on
the last day of the period. Total return calculated for a period of less
than one year is not annualized. The total return would have been lower if
certain expenses had not been reimbursed/waived by the investment adviser.
(5) Annualized.
(6) Portfolio turnover rate is not annualized and excludes the value of
portfolio securities received or delivered as a result of in-kind
creations or redemptions of the Fund's capital shares.
WisdomTree Trust Prospectus 87
Financial Highlights
WisdomTree International Dividend Funds
Selected data for a share of beneficial interest outstanding throughout the
indicated period is presented below:
-------------------------------------------------------------------------------------------------------
For the Period
For the June 16, 2006(1)
Year Ended through
WisdomTree Europe Total Dividend Fund March 31, 2008 March 31, 2007
-------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 63.64 $ 49.95
-------------------------------------------------------------------------------------------------------
Investment operations:
Net investment income(2) 1.71 0.73
Net realized and unrealized gain (loss) (1.88) 13.17
-------------------------------------------------------------------------------------------------------
Total from investment operations (0.17) 13.90
-------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Net investment income (1.47) (0.21)
Capital gains -- (0.00)(3)
-------------------------------------------------------------------------------------------------------
Total dividends and distributions to shareholders (1.47) (0.21)
-------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 62.00 $ 63.64
-------------------------------------------------------------------------------------------------------
TOTAL RETURN(4) (0.43)% 27.84%
-------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted) $ 43,399 $ 38,185
Ratio to average net assets of:
Expenses, net of expense reimbursements/waivers 0.48% 0.48%(5)
Expenses, prior to expense reimbursements/waivers 0.48% 0.58%(5)
Net investment income 2.55% 1.71%(5)
-------------------------------------------------------------------------------------------------------
Portfolio turnover rate(6) 15% 24%
-------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------
For the Period
For the June 16, 2006(1)
Year Ended through
WisdomTree Europe High-Yielding Equity Fund March 31, 2008 March 31, 2007
-------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 63.15 $ 49.83
-------------------------------------------------------------------------------------------------------
Investment operations:
Net investment income(2) 2.16 1.09
Net realized and unrealized gain (loss) (4.38) 12.55
-------------------------------------------------------------------------------------------------------
Total from investment operations (2.22) 13.64
-------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Net investment income (2.03) (0.32)
Capital gains (0.00)(3) --
-------------------------------------------------------------------------------------------------------
Total dividends and distributions to shareholders (2.03) (0.32)
-------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 58.90 $ 63.15
-------------------------------------------------------------------------------------------------------
TOTAL RETURN(4) (3.76)% 27.39%
-------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted) $ 47,122 $ 50,520
Ratio to average net assets of:
Expenses, net of expense reimbursements/waivers 0.58% 0.58%(5)
Expenses, prior to expense reimbursements/waivers 0.58% 0.65%(5)
Net investment income 3.32% 2.44%(5)
-------------------------------------------------------------------------------------------------------
Portfolio turnover rate(6) 21% 24%
-------------------------------------------------------------------------------------------------------
(1) Commencement of investment operations.
(2) Based on average shares outstanding.
(3) Amount is less than $0.005.
(4) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all dividends
and distributions at net asset value during the period and redemption on
the last day of the period. Total return calculated for a period of less
than one year is not annualized. The total return would have been lower if
certain expenses had not been reimbursed/waived by the investment adviser.
(5) Annualized.
(6) Portfolio turnover rate is not annualized and excludes the value of
portfolio securities received or delivered as a result of in-kind
creations or redemptions of the Fund's capital shares.
88 WisdomTree Trust Prospectus
Financial Highlights
WisdomTree International Dividend Funds
Selected data for a share of beneficial interest outstanding throughout the
indicated period is presented below:
-------------------------------------------------------------------------------------------------------
For the Period
For the June 16, 2006(1)
Year Ended through
WisdomTree Europe SmallCap Dividend Fund March 31, 2008 March 31, 2007
-------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 70.15 $ 50.42
-------------------------------------------------------------------------------------------------------
Investment operations:
Net investment income(2) 2.32 1.31
Net realized and unrealized gain (loss) (9.78) 18.89
-------------------------------------------------------------------------------------------------------
Total from investment operations (7.46) 20.20
-------------------------------------------------------------------------------------------------------
Dividends to shareholders:
Net investment income (4.22) (0.47)
-------------------------------------------------------------------------------------------------------
Total dividends to shareholders (4.22) (0.47)
-------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 58.47 $ 70.15
-------------------------------------------------------------------------------------------------------
TOTAL RETURN(3) (10.72)% 40.14%
-------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted) $ 46,778 $ 147,316
Ratio to average net assets of:
Expenses, net of expense reimbursements/waivers 0.58% 0.58%(4)
Expenses, prior to expense reimbursements/waivers 0.58% 0.62%(4)
Net investment income 3.33% 2.99%(4)
-------------------------------------------------------------------------------------------------------
Portfolio turnover rate(5) 22% 47%
-------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------
For the Period
For the June 16, 2006(1)
Year Ended through
WisdomTree Japan Total Dividend Fund March 31, 2008 March 31, 2007
-------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 57.00 $ 50.32
-------------------------------------------------------------------------------------------------------
Investment operations:
Net investment income(2) 0.64 0.56
Net realized and unrealized gain (loss) (8.82) 6.33
-------------------------------------------------------------------------------------------------------
Total from investment operations (8.18) 6.89
-------------------------------------------------------------------------------------------------------
Dividends to shareholders:
Net investment income (0.48) (0.21)
-------------------------------------------------------------------------------------------------------
Total dividends to shareholders (0.48) (0.21)
-------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 48.34 $ 57.00
-------------------------------------------------------------------------------------------------------
TOTAL RETURN(3) (14.39)% 13.71%
-------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted) $ 29,004 $ 51,301
Ratio to average net assets of:
Expenses, net of expense reimbursements 0.48% 0.48%(4)
Expenses, prior to expense reimbursements 0.48% 0.54%(4)
Net investment income 1.17% 1.40%(4)
-------------------------------------------------------------------------------------------------------
Portfolio turnover rate(5) 1% 6%
-------------------------------------------------------------------------------------------------------
(1) Commencement of investment operations.
(2) Based on average shares outstanding.
(3) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all dividends
and distributions at net asset value during the period and redemption on
the last day of the period. Total return calculated for a period of less
than one year is not annualized. The total return would have been lower if
certain expenses had not been reimbursed/waived by the investment adviser.
(4) Annualized.
(5) Portfolio turnover rate is not annualized and excludes the value of
portfolio securities received or delivered as a result of in-kind
creations or redemptions of the Fund's capital shares.
WisdomTree Trust Prospectus 89
Financial Highlights
WisdomTree International Dividend Funds
Selected data for a share of beneficial interest outstanding throughout the
indicated period is presented below:
-------------------------------------------------------------------------------------------------------
For the period
For the June 16, 2006(1)
Year Ended through
WisdomTree Japan High-Yielding Equity Fund March 31, 2008 March 31, 2007
-------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 59.42 $ 50.14
-------------------------------------------------------------------------------------------------------
Investment operations:
Net investment income(2) 0.65 1.18
Net realized and unrealized gain (loss) (9.50) 8.44
-------------------------------------------------------------------------------------------------------
Total from investment operations (8.85) 9.62
-------------------------------------------------------------------------------------------------------
Dividends to shareholders:
Net investment income (0.98) (0.34)
-------------------------------------------------------------------------------------------------------
Total dividends to shareholders (0.98) (0.34)
-------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 49.59 $ 59.42
-------------------------------------------------------------------------------------------------------
TOTAL RETURN(3) (14.96)% 19.22%
-------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted) $ 29,754 $ 95,069
Ratio to average net assets of:
Expenses, net of expense reimbursements 0.58% 0.58%(4)
Expenses, prior to expense reimbursements 0.58% 0.64%(4)
Net investment income 1.18% 3.00%(4)
-------------------------------------------------------------------------------------------------------
Portfolio turnover rate(5) 1% 6%
-------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------
For the period
For the June 16, 2006(1)
Year Ended through
WisdomTree Japan SmallCap Dividend Fund March 31, 2008 March 31, 2007
-------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 52.33 $ 50.69
-------------------------------------------------------------------------------------------------------
Investment operations:
Net investment income(2) 0.69 0.95
Net realized and unrealized gain (loss) (8.12) 0.74
-------------------------------------------------------------------------------------------------------
Total from investment operations (7.43) 1.69
-------------------------------------------------------------------------------------------------------
Dividends to shareholders:
Net investment income (0.61) (0.05)
-------------------------------------------------------------------------------------------------------
Total dividends to shareholders (0.61) (0.05)
-------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 44.29 $ 52.33
-------------------------------------------------------------------------------------------------------
TOTAL RETURN(3) (14.23)% 3.34%
-------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted) $ 75,300 $ 99,419
Ratio to average net assets of:
Expenses, net of expense reimbursements/waivers 0.58% 0.58%(4)
Expenses, prior to expense reimbursements/waivers 0.58% 0.64%(4)
Net investment income 1.44% 2.75%(4)
-------------------------------------------------------------------------------------------------------
Portfolio turnover rate(5) 3% 25%
-------------------------------------------------------------------------------------------------------
(1) Commencement of investment operations.
(2) Based on average shares outstanding.
(3) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all dividends
and distributions at net asset value during the period and redemption on
the last day of the period. Total return calculated for a period of less
than one year is not annualized. The total return would have been lower if
certain expenses had not been reimbursed/waived by the investment adviser.
(4) Annualized.
(5) Portfolio turnover rate is not annualized and excludes the value of
portfolio securities received or delivered as a result of in-kind
creations or redemptions of the Fund's capital shares.
90 WisdomTree Trust Prospectus
Financial Highlights
WisdomTree International Dividend Funds
Selected data for a share of beneficial interest outstanding throughout the
indicated period is presented below:
--------------------------------------------------------------------------------------------
For the period
For the June 16, 2006(1)
Year Ended through
WisdomTree Pacific ex-Japan Total Dividend Fund March 31, 2008 March 31, 2007
--------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 67.57 $ 49.71
--------------------------------------------------------------------------------------------
Investment operations:
Net investment income(2) 2.69 1.40
Net realized and unrealized gain 4.61 16.85
--------------------------------------------------------------------------------------------
Total from investment operations 7.30 18.25
--------------------------------------------------------------------------------------------
Dividends to shareholders:
Net investment income (1.87) (0.39)
--------------------------------------------------------------------------------------------
Total dividends to shareholders (1.87) (0.39)
--------------------------------------------------------------------------------------------
Net asset value, end of period $ 73.00 $ 67.57
--------------------------------------------------------------------------------------------
TOTAL RETURN(3) 10.58% 36.80%
--------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted) $ 146,008 $ 74,329
Ratio to average net assets of:
Expenses, net of expense reimbursements 0.48% 0.48%(4)
Expenses, prior to expense reimbursements 0.48% 0.54%(4)
Net investment income 3.42% 3.31%(4)
--------------------------------------------------------------------------------------------
Portfolio turnover rate(5) 12% 21%
--------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------
For the period
For the June 16, 2006(1)
Year Ended through
WisdomTree Pacific ex-Japan High-Yielding Equity Fund March 31, 2008 March 31, 2007
--------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 67.08 $ 49.02
--------------------------------------------------------------------------------------------
Investment operations:
Net investment income(2) 3.24 2.18
Net realized and unrealized gain (loss) (3.40) 16.40
--------------------------------------------------------------------------------------------
Total from investment operations (0.16) 18.58
--------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Net investment income (3.48) (0.52)
Capital gains (0.14) --
--------------------------------------------------------------------------------------------
Total dividends and distributions to shareholders (3.62) (0.52)
--------------------------------------------------------------------------------------------
Net asset value, end of period $ 63.30 $ 67.08
--------------------------------------------------------------------------------------------
TOTAL RETURN(3) 0.69% 38.02%
--------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted) $ 56,966 $ 87,205
Ratio to average net assets of:
Expenses, net of expense reimbursements/waivers 0.58% 0.58%(4)
Expenses, prior to expense reimbursements/waivers 0.58% 0.63%(4)
Net investment income 4.42% 5.11%(4)
--------------------------------------------------------------------------------------------
Portfolio turnover rate(5) 16% 7%
--------------------------------------------------------------------------------------------
(1) Commencement of investment operations.
(2) Based on average shares outstanding.
(3) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all dividends
and distributions at net asset value during the period and redemption on
the last day of the period. Total return calculated for a period of less
than one year is not annualized. The total return would have been lower if
certain expenses had not been reimbursed/waived by the investment adviser.
(4) Annualized.
(5) Portfolio turnover rate is not annualized and excludes the value of
portfolio securities received or delivered as a result of in-kind
creations or redemptions of the Fund's capital shares.
WisdomTree Trust Prospectus 91
Financial Highlights
WisdomTree International Dividend Funds
Selected data for a share of beneficial interest outstanding throughout the
indicated period is presented below:
-------------------------------------------------------------------------------------------
For the period
For the June 16, 2006(1)
Year Ended through
WisdomTree International LargeCap Dividend Fund March 31, 2008 March 31, 2007
-------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 62.55 $ 49.86
-------------------------------------------------------------------------------------------
Investment operations:
Net investment income(2) 1.80 0.85
Net realized and unrealized gain (loss) (1.11) 12.14
-------------------------------------------------------------------------------------------
Total from investment operations 0.69 12.99
-------------------------------------------------------------------------------------------
Dividends to shareholders:
Net investment income (1.38) (0.30)
-------------------------------------------------------------------------------------------
Total dividends to shareholders (1.38) (0.30)
-------------------------------------------------------------------------------------------
Net asset value, end of period $ 61.86 $ 62.55
-------------------------------------------------------------------------------------------
TOTAL RETURN(3) 0.93% 26.08%
-------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted) $ 154,658 $ 87,569
Ratio to average net assets of:
Expenses, net of expense reimbursements/waivers 0.48% 0.48%(4)
Expenses, prior to expense reimbursements/waivers 0.48% 0.52%(4)
Net investment income 2.69% 1.99%(4)
-------------------------------------------------------------------------------------------
Portfolio turnover rate(5) 15% 8%(4)
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
For the period
For the June 16, 2006(1)
Year Ended through
WisdomTree International Dividend Top 100 Fund March 31, 2008 March 31, 2007
-------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 66.37 $ 49.77
-------------------------------------------------------------------------------------------
Investment operations:
Net investment income(2) 2.29 1.03
Net realized and unrealized gain (loss) (2.86) 15.80
-------------------------------------------------------------------------------------------
Total from investment operations (0.57) 16.83
-------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Net investment income (1.79) (0.22)
Capital gains -- (0.01)
-------------------------------------------------------------------------------------------
Total dividends and distributions to shareholders (1.79) (0.23)
-------------------------------------------------------------------------------------------
Net asset value, end of period $ 64.01 $ 66.37
-------------------------------------------------------------------------------------------
TOTAL RETURN(3) (1.05)% 33.83%
-------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted) $ 390,485 $ 278,743
Ratio to average net assets of:
Expenses, net of expense reimbursements/waivers 0.58% 0.58%(4)
Expenses, prior to expense reimbursements/waivers 0.58% 0.60%(4)
Net investment income 3.28% 2.30%(4)
-------------------------------------------------------------------------------------------
Portfolio turnover rate(5) 24% 8%
-------------------------------------------------------------------------------------------
(1) Commencement of investment operations.
(2) Based on average shares outstanding.
(3) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all dividends
and distributions at net asset value during the period and redemption on
the last day of the period. Total return calculated for a period of less
than one year is not annualized. The total return would have been lower if
certain expenses had not been reimbursed/waived by the investment adviser.
(4) Annualized.
(5) Portfolio turnover rate is not annualized and excludes the value of
portfolio securities received or delivered as a result of in-kind
creations or redemptions of the Fund's capital shares.
92 WisdomTree Trust Prospectus
Financial Highlights
WisdomTree International Dividend Funds
Selected data for a share of beneficial interest outstanding throughout the
indicated period is presented below::
--------------------------------------------------------------------------------------------
For the Period
For the June 16, 2006(1)
Year Ended through
WisdomTree International MidCap Dividend Fund March 31, 2008 March 31, 2007
--------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 67.56 $ 50.13
--------------------------------------------------------------------------------------------
Investment operations:
Net investment income(2) 1.92 1.08
Net realized and unrealized gain (loss) (4.95) 16.73
--------------------------------------------------------------------------------------------
Total from investment operations (3.03) 17.81
--------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Net investment income (1.81) (0.38)
Capital gains (0.12) --
--------------------------------------------------------------------------------------------
Total dividends and distributions to shareholders (1.93) (0.38)
--------------------------------------------------------------------------------------------
Net asset value, end of period $ 62.60 $ 67.56
--------------------------------------------------------------------------------------------
TOTAL RETURN(3) (4.61)% 35.57%
--------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted) $ 219,104 $ 168,889
Ratio to average net assets of:
Expenses, net of expense reimbursements/waivers 0.58% 0.58%(4)
Expenses, prior to expense reimbursements/waivers 0.58% 0.61%(4)
Net investment income 2.76% 2.53%(4)
--------------------------------------------------------------------------------------------
Portfolio turnover rate(5) 18% 44%
--------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------
For the period
For the June 16, 2006(1)
Year Ended through
WisdomTree International SmallCap Dividend Fund March 31, 2008 March 31, 2007
--------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 67.80 $ 50.35
--------------------------------------------------------------------------------------------
Investment operations:
Net investment income(2) 1.86 1.43
Net realized and unrealized gain (loss) (7.08) 16.28
--------------------------------------------------------------------------------------------
Total from investment operations (5.22) 17.71
--------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Net investment income (1.41) (0.26)
Capital gains (0.06) --
--------------------------------------------------------------------------------------------
Total dividends and distributions to shareholders (1.47) (0.26)
--------------------------------------------------------------------------------------------
Net asset value, end of period $ 61.11 $ 67.80
--------------------------------------------------------------------------------------------
TOTAL RETURN(3) (7.79)% 35.21%
--------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted) $ 482,761 $ 298,315
Ratio to average net assets of:
Expenses, net of expense reimbursements/waivers 0.58% 0.58%(4)
Expenses, prior to expense reimbursements/waivers 0.58% 0.60%(4)
Net investment income 2.71% 3.33%(4)
--------------------------------------------------------------------------------------------
Portfolio turnover rate(5) 17% 39%
--------------------------------------------------------------------------------------------
(1) Commencement of investment operations.
(2) Based on average shares outstanding.
(3) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all dividends
and distributions at net asset value during the period and redemption on
the last day of the period. Total return calculated for a period of less
than one year is not annualized. The total return would have been lower if
certain expenses had not been reimbursed/waived by the investment adviser.
(4) Annualized.
(5) Portfolio turnover rate is not annualized and excludes the value of
portfolio securities received or delivered as a result of in-kind
creations or redemptions of the Fund's capital shares.
WisdomTree Trust Prospectus 93
Financial Highlights
WisdomTree International Dividend Funds
Selected data for a share of beneficial interest outstanding throughout the
indicated period is presented below:
--------------------------------------------------------------------------------------------
For the period
July 13, 2007(1)
through
WisdomTree Emerging Markets High-Yielding Equity Fund March 31, 2008
--------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 50.68
--------------------------------------------------------------------------------------------
Investment operations:
Net investment income(2) 1.12
Net realized and unrealized gain 0.51
--------------------------------------------------------------------------------------------
Total from investments operations 1.63
--------------------------------------------------------------------------------------------
Dividends to shareholders:
Net investment income (0.49)
--------------------------------------------------------------------------------------------
Total dividends to shareholders (0.49)
--------------------------------------------------------------------------------------------
Net asset value, end of period $ 51.82
--------------------------------------------------------------------------------------------
TOTAL RETURN(3) 3.23%
--------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted) $ 165,813
Ratio to average net assets of:
Net expenses 0.63%(4)
Net investment income 3.18%(4)
--------------------------------------------------------------------------------------------
Portfolio turnover rate(5) 3%
--------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------
For the period
October 30, 2007(1)
through
WisdomTree Emerging Markets SmallCap Dividend Fund March 31, 2008
--------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 51.50
--------------------------------------------------------------------------------------------
Investment operations:
Net investment income(2) 0.37
Net realized and unrealized gain loss (7.87)
--------------------------------------------------------------------------------------------
Total from investment operations (7.50)
--------------------------------------------------------------------------------------------
Dividends to shareholders:
Net investment income (0.05)
--------------------------------------------------------------------------------------------
Total dividends to shareholders (0.05)
--------------------------------------------------------------------------------------------
Net asset value, end of period $ 43.95
--------------------------------------------------------------------------------------------
TOTAL RETURN(3) (14.57)%
--------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted) $ 52,742
Ratio to average net assets of:
Net expenses 0.63%(4)
Net investment income 1.99%(4)
--------------------------------------------------------------------------------------------
Portfolio turnover rate(5) 6%
--------------------------------------------------------------------------------------------
(1) Commencement of investment operations.
(2) Based on average shares outstanding.
(3) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all dividends
and distributions at net asset value during the period and redemption on
the last day of the period. Total return calculated for a period of less
than one year is not annualized.
(4) Annualized.
(5) Portfolio turnover rate is not annualized and excludes the value of
portfolio securities received or delivered as a result of in-kind
creations or redemptions of the Fund's capital shares.
94 WisdomTree Trust Prospectus
Frequency Distribution of Discounts & Premiums (unaudited)
WisdomTree Domestic Dividend Funds
The chart below presents information about differences between the per share net
asset value ("NAV") of each Fund and the market trading price of shares of each
Fund. For these purposes, the "market price" is the mid-point of the highest bid
and lowest offer for Fund shares as of the close of trading on the exchange
where Fund shares are listed. The term "premium" is sometimes used to describe a
market price in excess of NAV and the term "discount" is sometimes used to
describe a market price below NAV. The chart presents information about the size
and frequency of end of day premiums or discounts. As with other exchange traded
funds, the market price of Fund shares is typically slightly higher or lower
than the Fund's per share NAV. Factors that contribute to the differences
between market price and NAV include the supply and demand for Fund shares and
investors' assessments of the underlying value of a Fund's portfolio securities.
--------------------------------------------------------------------------------------------------------------------------
Market Price Above or Equal to Market Price Below
Net Asset Value Net Asset Value
-------------------------------- -----------------------------
Basis Point Number Percentage of Number Percentage of
Differential of Days Total Days of Days Total Days
--------------------------------------------------------------------------------------------------------------------------
WisdomTree Total Dividend Fund
April 1, 2007 - June 30, 2008 0-24.9 128 40.63% 175 55.56%
---------------------------------------------------------------------------------
25-49.9 2 0.63% 3 0.95%
---------------------------------------------------------------------------------
50-74.9 1 0.32% 0 0.00%
---------------------------------------------------------------------------------
75-100.0 1 0.32% 0 0.00%
---------------------------------------------------------------------------------
>100.0 3 0.95% 2 0.63%
---------------------------------------------------------------------------------
Total 135 42.86% 180 57.14%
--------------------------------------------------------------------------------------------------------------------------
WisdomTree High-Yielding Equity Fund
April 1, 2007 - June 30, 2008 0-24.9 127 40.32% 172 54.60%
---------------------------------------------------------------------------------
25-49.9 4 1.27% 2 0.63%
---------------------------------------------------------------------------------
50-74.9 1 0.32% 2 0.63%
---------------------------------------------------------------------------------
75-100.0 1 0.32% 1 0.32%
---------------------------------------------------------------------------------
>100.0 3 0.95% 2 0.63%
---------------------------------------------------------------------------------
Total 136 43.17% 179 56.83%
--------------------------------------------------------------------------------------------------------------------------
WisdomTree LargeCap Dividend Fund
April 1, 2007 - June 30, 2008 0-24.9 135 42.86% 156 49.52%
---------------------------------------------------------------------------------
25-49.9 8 2.54% 5 1.59%
---------------------------------------------------------------------------------
50-74.9 3 0.95% 1 0.32%
---------------------------------------------------------------------------------
75-100.0 0 0.00% 0 0.00%
---------------------------------------------------------------------------------
>100.0 5 1.59% 2 0.63%
---------------------------------------------------------------------------------
Total 151 47.94% 164 52.06%
--------------------------------------------------------------------------------------------------------------------------
WisdomTree Dividend Top 100 Fund
April 1, 2007 - June 30, 2008 0-24.9 123 39.05% 160 50.79%
---------------------------------------------------------------------------------
25-49.9 16 5.08% 4 1.27%
---------------------------------------------------------------------------------
50-74.9 1 0.32% 1 0.32%
---------------------------------------------------------------------------------
75-100.0 1 0.32% 1 0.32%
---------------------------------------------------------------------------------
>100.0 5 1.59% 3 0.95%
---------------------------------------------------------------------------------
Total 146 46.35% 169 53.65%
--------------------------------------------------------------------------------------------------------------------------
WisdomTree Trust Prospectus 95
Frequency Distribution of Discounts & Premiums (unaudited) (concluded)
WisdomTree Domestic Dividend Funds
--------------------------------------------------------------------------------------------------------------------------
Market Price Above or Equal to Market Price Below
Net Asset Value Net Asset Value
-------------------------------- -----------------------------
Basis Point Number Percentage of Number Percentage of
Differential of Days Total Days of Days Total Days
--------------------------------------------------------------------------------------------------------------------------
WisdomTree MidCap Dividend Fund
April 1, 2007 - June 30, 2008 0-24.9 137 43.49% 161 51.11%
---------------------------------------------------------------------------------
25-49.9 3 0.95% 3 0.95%
---------------------------------------------------------------------------------
50-74.9 0 0.00% 1 0.32%
---------------------------------------------------------------------------------
75-100.0 1 0.32% 0 0.00%
---------------------------------------------------------------------------------
>100.0 7 2.22% 2 0.63%
---------------------------------------------------------------------------------
Total 148 46.89% 167 53.02%
--------------------------------------------------------------------------------------------------------------------------
WisdomTree SmallCap Dividend Fund
April 1, 2007 - June 30, 2008 0-24.9 145 46.03% 149 47.30%
---------------------------------------------------------------------------------
25-49.9 3 0.95% 9 2.86%
---------------------------------------------------------------------------------
50-74.9 2 0.63% 0 0.00%
---------------------------------------------------------------------------------
75-100.0 0 0.00% 0 0.00%
---------------------------------------------------------------------------------
>100.0 4 1.27% 3 0.95%
---------------------------------------------------------------------------------
Total 154 48.89% 161 51.11%
--------------------------------------------------------------------------------------------------------------------------
96 WisdomTree Trust Prospectus
Frequency Distribution of Discounts & Premiums (unaudited)
WisdomTree International Dividend Funds
The chart below presents information about differences between the per share net
asset value ("NAV") of each Fund and the market trading price of shares of each
Fund. For these purposes, the "market price" is the mid-point of the highest bid
and lowest offer for Fund shares as of the close of trading on the exchange
where Fund shares are listed. The term "premium" is sometimes used to describe a
market price in excess of NAV and the term "discount" is sometimes used to
describe a market price below NAV. The chart presents information about the size
and frequency of end of day premiums or discounts. As with other exchange traded
funds, the market price of Fund shares is typically slightly higher or lower
than the Fund's per share NAV. Factors that contribute to the differences
between market price and NAV include the supply and demand for Fund shares and
investors' assessments of the underlying value of a Fund's portfolio securities.
Differences between the closing times of U.S. and non-U.S. markets may
contribute to differences between the NAV and market price of Fund shares. Many
non-U.S. markets close prior to the close of the U.S. securities exchanges.
Developments after the close of such markets as a result of ongoing price
discovery may be reflected in a Fund's market price but not in its NAV (or vice
versa).
Because the Middle East Dividend Fund did not commence operations until
July 2008, information is not presented for this Fund.
-----------------------------------------------------------------------------------------------------------------------------------
Market Price Above or Equal to Market Price Below
Net Asset Value Net Asset Value
------------------------------ -----------------------
Basis Point Number Percentage of Number Percentage of
Differential of Days Total Days of Days Total Days
-----------------------------------------------------------------------------------------------------------------------------------
WisdomTree DEFA Fund
April 1, 2007 - June 30, 2008 0-24.9 43 13.65% 25 7.94%
-----------------------------------------------------------------------
25-49.9 64 20.32% 16 5.08%
-----------------------------------------------------------------------
50-74.9 53 16.83% 15 4.76%
-----------------------------------------------------------------------
75-100.0 29 9.21% 10 3.17%
-----------------------------------------------------------------------
>100.0 43 13.65% 17 5.40%
-----------------------------------------------------------------------
Total 232 73.65% 83 26.35%
-----------------------------------------------------------------------------------------------------------------------------------
WisdomTree DEFA High-Yielding Equity Fund
April 1, 2007 - June 30, 2008 0-24.9 54 17.14% 31 9.84%
-----------------------------------------------------------------------
25-49.9 51 16.19% 29 9.21%
-----------------------------------------------------------------------
50-74.9 42 13.33% 15 4.76%
-----------------------------------------------------------------------
75-100.0 19 6.03% 20 6.35%
-----------------------------------------------------------------------
>100.0 32 10.16% 22 6.98%
-----------------------------------------------------------------------
Total 198 62.86% 117 37.14%
-----------------------------------------------------------------------------------------------------------------------------------
WisdomTree Europe Total Dividend Fund
April 1, 2007 - June 30, 2008 0-24.9 67 21.27% 39 12.38%
-----------------------------------------------------------------------
25-49.9 54 17.14% 30 9.52%
-----------------------------------------------------------------------
50-74.9 30 9.52% 18 5.71%
-----------------------------------------------------------------------
75-100.0 17 5.40% 11 3.49%
-----------------------------------------------------------------------
>100.0 32 10.16% 17 5.40%
-----------------------------------------------------------------------
Total 200 63.49% 115 36.51%
-----------------------------------------------------------------------------------------------------------------------------------
WisdomTree Europe High-Yielding Equity Fund
April 1, 2007 - June 30, 2008 0-24.9 36 11.43% 39 12.38%
-----------------------------------------------------------------------
25-49.9 24 7.62% 43 13.65%
-----------------------------------------------------------------------
50-74.9 12 3.81% 29 9.21%
-----------------------------------------------------------------------
75-100.0 6 1.90% 39 12.38%
-----------------------------------------------------------------------
>100.0 8 2.54% 79 25.08%
-----------------------------------------------------------------------
Total 86 27.30% 229 72.70%
-----------------------------------------------------------------------------------------------------------------------------------
WisdomTree Trust Prospectus 97
Frequency Distribution of Discounts & Premiums (unaudited)
WisdomTree International Dividend Funds
-----------------------------------------------------------------------------------------------------------------------------------
Market Price Above or Equal to Market Price Below
Net Asset Value Net Asset Value
------------------------------ -----------------------
Basis Point Number Percentage of Number Percentage of
Differential of Days Total Days of Days Total Days
-----------------------------------------------------------------------------------------------------------------------------------
WisdomTree Europe SmallCap Dividend Fund
April 1, 2007 - June 30, 2008 0-24.9 36 11.43% 39 12.38%
-----------------------------------------------------------------------
25-49.9 24 7.62% 43 13.65%
-----------------------------------------------------------------------
50-74.9 12 3.81% 29 9.21%
-----------------------------------------------------------------------
75-100.0 6 1.40% 39 12.38%
-----------------------------------------------------------------------
>100.0 8 2.54% 79 25.08%
-----------------------------------------------------------------------
Total 86 27.30% 229 72.70%
-----------------------------------------------------------------------------------------------------------------------------------
WisdomTree Japan Total Dividend Fund
April 1, 2007 - June 30, 2008 0-24.9 36 11.43% 31 9.84%
-----------------------------------------------------------------------
25-49.9 30 9.52% 27 8.57%
-----------------------------------------------------------------------
50-74.9 19 6.03% 22 6.98%
-----------------------------------------------------------------------
75-100.0 14 4.44% 29 9.21%
-----------------------------------------------------------------------
>100.0 26 8.25% 81 25.71%
-----------------------------------------------------------------------
Total 125 39.68% 190 60.32%
-----------------------------------------------------------------------------------------------------------------------------------
WisdomTree Japan High-Yielding Equity Fund
April 1, 2007 - June 30, 2008 0-24.9 34 10.79% 31 9.84%
-----------------------------------------------------------------------
25-49.9 30 9.52% 29 9.21%
-----------------------------------------------------------------------
50-74.9 17 5.40% 26 8.25%
-----------------------------------------------------------------------
75-100.0 7 2.22% 27 8.57%
-----------------------------------------------------------------------
>100.0 33 10.48% 81 25.71%
-----------------------------------------------------------------------
Total 121 38.41% 194 61.59%
-----------------------------------------------------------------------------------------------------------------------------------
WisdomTree Japan SmallCap Dividend Fund
April 1, 2007 - June 30, 2008 0-24.9 44 13.97% 19 6.03%
-----------------------------------------------------------------------
25-49.9 30 9.52% 30 9.52%
-----------------------------------------------------------------------
50-74.9 24 7.62% 21 6.67%
-----------------------------------------------------------------------
75-100.0 8 2.54% 25 7.94%
-----------------------------------------------------------------------
>100.0 42 13.33% 72 22.86%
-----------------------------------------------------------------------
Total 148 46.98% 167 53.02%
-----------------------------------------------------------------------------------------------------------------------------------
WisdomTree Pacific ex-Japan Total Dividend Fund
April 1, 2007 - June 30, 2008 0-24.9 39 12.38% 20 6.35%
-----------------------------------------------------------------------
25-49.9 33 10.48% 29 9.21%
-----------------------------------------------------------------------
50-74.9 25 7.94% 12 3.81%
-----------------------------------------------------------------------
75-100.0 21 6.67% 17 5.40%
-----------------------------------------------------------------------
>100.0 52 16.51% 67 21.27%
-----------------------------------------------------------------------
Total 170 53.97% 145 46.03%
-----------------------------------------------------------------------------------------------------------------------------------
98 WisdomTree Trust Prospectus
Frequency Distribution of Discounts & Premiums (unaudited)
-----------------------------------------------------------------------------------------------------------------------------------
Market Price Above or Equal to Market Price Below
Net Asset Value Net Asset Value
------------------------------ -----------------------
Basis Point Number Percentage of Number Percentage of
Differential of Days Total Days of Days Total Days
-----------------------------------------------------------------------------------------------------------------------------------
WisdomTree Pacific ex-Japan High-Yielding Equity Fund
April 1, 2007 - June 30, 2008 0-24.9 26 8.25% 23 7.30%
-----------------------------------------------------------------------
25-49.9 34 10.79% 27 8.57%
-----------------------------------------------------------------------
50-74.9 35 11.11% 19 6.03%
-----------------------------------------------------------------------
75-100.0 29 9.21% 16 5.08%
-----------------------------------------------------------------------
>100.0 34 10.79% 72 22.86%
-----------------------------------------------------------------------
Total 158 50.16% 157 49.84%
-----------------------------------------------------------------------------------------------------------------------------------
WisdomTree International LargeCap Dividend Fund
April 1, 2007 - June 30, 2008 0-24.9 46 14.60% 39 12.38%
-----------------------------------------------------------------------
25-49.9 65 20.63% 28 8.89%
-----------------------------------------------------------------------
50-74.9 28 8.89% 19 6.03%
-----------------------------------------------------------------------
75-100.0 30 9.52% 6 1.90%
-----------------------------------------------------------------------
>100.0 30 9.52% 24 7.62%
-----------------------------------------------------------------------
Total 199 63.17% 116 36.83%
-----------------------------------------------------------------------------------------------------------------------------------
WisdomTree International Dividend Top 100 Fund
April 1, 2007 - June 30, 2008 0-24.9 39 12.38% 37 11.75%
-----------------------------------------------------------------------
25-49.9 52 16.51% 28 8.89%
-----------------------------------------------------------------------
50-74.9 39 12.38% 17 5.40%
-----------------------------------------------------------------------
75-100.0 22 6.98% 8 2.54%
-----------------------------------------------------------------------
>100.0 36 11.43% 37 11.75%
-----------------------------------------------------------------------
Total 188 59.68% 127 40.32%
-----------------------------------------------------------------------------------------------------------------------------------
WisdomTree International MidCap Dividend Fund
April 1, 2007 - June 30, 2008 0-24.9 46 14.60% 40 12.70%
-----------------------------------------------------------------------
25-49.9 54 17.14% 33 10.48%
-----------------------------------------------------------------------
50-74.9 33 10.48% 16 5.08%
-----------------------------------------------------------------------
75-100.0 18 5.71% 14 4.44%
-----------------------------------------------------------------------
>100.0 34 10.79% 27 8.57%
-----------------------------------------------------------------------
Total 185 58.73% 130 41.27%
-----------------------------------------------------------------------------------------------------------------------------------
WisdomTree International SmallCap Dividend Fund
April 1, 2007 - June 30, 2008 0-24.9 40 12.70% 19 6.03%
-----------------------------------------------------------------------
25-49.9 52 16.51% 25 7.94%
-----------------------------------------------------------------------
50-74.9 41 13.02% 10 3.17%
-----------------------------------------------------------------------
75-100.0 31 9.84% 14 4.44%
-----------------------------------------------------------------------
>100.0 58 18.41% 25 7.94%
-----------------------------------------------------------------------
Total 222 70.48% 93 29.52%
-----------------------------------------------------------------------------------------------------------------------------------
WisdomTree Trust Prospectus 99
Frequency Distribution of Discounts & Premiums (unaudited)
WisdomTree International Dividend Funds
-----------------------------------------------------------------------------------------------------------------------------------
Market Price Above or Equal to Market Price Below
Net Asset Value Net Asset Value
------------------------------ -----------------------
Basis Point Number Percentage of Number Percentage of
Differential of Days Total Days of Days Total Days
-----------------------------------------------------------------------------------------------------------------------------------
WisdomTree Emerging Markets High-Yielding Equity Fund
July 13, 2007 - June 30, 2008 0-24.9 18 7.38% 17 6.97%
-----------------------------------------------------------------------
25-49.9 13 5.33% 12 4.92%
-----------------------------------------------------------------------
50-74.9 23 9.43% 8 3.28%
-----------------------------------------------------------------------
75-100.0 27 11.07% 7 2.87%
-----------------------------------------------------------------------
>100.0 86 35.25% 33 13.52%
-----------------------------------------------------------------------
Total 167 68.44% 77 31.56%
-----------------------------------------------------------------------------------------------------------------------------------
WisdomTree Emerging Markets SmallCap Dividend Fund
October 30, 2007 - June 30, 2008 0-24.9 7 4.17% 9 5.36%
-----------------------------------------------------------------------
25-49.9 13 7.74% 5 2.98%
-----------------------------------------------------------------------
50-74.9 6 3.57% 6 3.57%
-----------------------------------------------------------------------
75-100.0 18 10.71% 6 3.57%
-----------------------------------------------------------------------
>100.0 41 24.40% 57 33.93%
-----------------------------------------------------------------------
Total 85 50.60% 83 49.40%
-----------------------------------------------------------------------------------------------------------------------------------
100 WisdomTree Trust Prospectus
(This page intentionally left blank.)
WisdomTree Trust Prospectus 101
The Trust's current SAI provides additional detailed information about the
Funds. The Trust has electronically filed the SAI with the SEC. It is
incorporated by reference in this Prospectus.
Additional information about the Funds' investments is available in the Funds'
annual and semi-annual reports to shareholders. In the annual report you will
find a discussion of the market conditions and investment strategies that
significantly affected the Funds' performance during the last fiscal year.
To make shareholder inquiries, for more detailed information on the Funds or to
request the SAI, annual or semi-annual shareholder reports free of charge,
please:
--------------------------------------------------------------------------------
Call: 1-866-909-9473
Monday through Friday
8:00 a.m. - 8:00 p.m. (Eastern time)
--------------------------------------------------------------------------------
Write: WisdomTree Trust
c/o ALPS Distributors, Inc.
1290 Broadway, Suite 1100
Denver, Colorado 80203
--------------------------------------------------------------------------------
Visit: www.wisdomtree.com
--------------------------------------------------------------------------------
Information about the Funds (including the SAI) can be reviewed and copied at
the SEC's Public Reference Room in Washington, D.C., and information on the
operation of the Public Reference Room may be obtained by calling the SEC at
1-202-942-8090. Reports and other information about the Funds are available on
the EDGAR Database on the SEC's Internet site at www.sec.gov, and copies of this
information may be obtained, after paying a duplicating fee, by electronic
request at the following E-mail address: publicinfo@sec.gov, or by writing the
SEC's Public Reference Section, Washington, D.C. 20549-0102.
No person is authorized to give any information or to make any representations
about any Fund and its shares not contained in this Prospectus and you should
not rely on any other information. Read and keep this Prospectus for future
reference.
(C)2008 WisdomTree Trust
WisdomTree Funds are distributed by
ALPS Distributors, Inc.
1290 Broadway, Suite 1100
Denver, Colorado 80203
WisdomTree(R) is a registered mark of WisdomTree
Investments, Inc.
INVESTMENT COMPANY ACT FILE NO. 811-21864
--------------------------------------------------------------------------------
[WISDOMTREE LOGO]
WisdomTree Trust
380 Madison Avenue, 21st Floor
New York, NY 10017
[WISDOMTREE LOGO]
--------------------------
International Sector Funds
--------------------------
PROSPECTUS
July 29, 2008
--------------------------------------------------------------------------------
WisdomTree(R) Trust
--------------------------------------------------------------------------------
WisdomTree
International Sector Funds
WisdomTree International Basic Materials Sector Fund
WisdomTree International Communications Sector Fund
WisdomTree International Consumer Discretionary Sector Fund
WisdomTree International Consumer Staples Sector Fund
WisdomTree International Energy Sector Fund
WisdomTree International Financial Sector Fund
WisdomTree International Health Care Sector Fund
WisdomTree International Industrial Sector Fund
WisdomTree International Technology Sector Fund
WisdomTree International Utilities Sector Fund
WisdomTree International Real Estate Fund
--------------------------------------------------------------------------------
THE 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 Trust (the "Trust") is a registered investment company that consists
of separate investment portfolios called "Funds." Each Fund seeks investment
results that closely correspond to the price and yield performance, before fees
and expenses, of a particular index that defines a dividend-paying segment of
the international stock market. The indexes are created using a proprietary
methodology developed by WisdomTree Investments, Inc. The Funds described in
this Prospectus are listed in the Table of Contents.
Each Fund is an "exchange traded fund." This means that shares of the Funds are
listed on a national securities exchange, such as NYSE Arca, and trade at market
prices. The market price for a Fund's shares may be different from its net asset
value per share ("NAV"). Each Fund has its own CUSIP number and exchange trading
symbol.
Each Fund described in this Prospectus issues and redeems shares at NAV only in
large blocks of shares, typically 200,000 shares or more ("Creation Units").
These transactions are usually in exchange for a basket of securities and an
amount of cash. As a practical matter, only institutions or large investors
purchase or redeem Creation Units. Except when aggregated in Creation Units,
shares of each Fund are not redeemable securities.
--------------------------------------------------------------------------------
A NOTE TO RETAIL INVESTORS
Shares can be purchased directly from the issuing Fund only in exchange for a
basket of securities that is expected to be worth several million dollars. Most
individual investors, therefore, will not be able to purchase shares directly
from a Fund. Instead, these investors will purchase shares in the secondary
market through a brokerage account or with the assistance of a broker. Thus,
some of the information contained in this Prospectus - such as information about
purchasing and redeeming shares from a Fund and references to transaction fees
imposed on purchases and redemptions - is not relevant to most individual
investors. Shares purchased or sold through a brokerage account or with the
assistance of a broker may be subject to brokerage commissions and charges.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
INVESTMENT PRODUCTS: o ARE NOT FDIC INSURED o MAY LOSE VALUE
o ARE NOT BANK GUARANTEED
--------------------------------------------------------------------------------
WisdomTree Trust
--------------------------------------------------------------------------------
Table of Contents
--------------------------------------------------------------------------------
Overview 2
Investment Objective 2
Principal Investment Strategies 2
Principal Risk Factors Common to All Funds 3
WisdomTree International Sector Funds 6
WisdomTree International Basic Materials Sector Fund 6
WisdomTree International Communications Sector Fund 9
WisdomTree International Consumer Discretionary Sector Fund 12
WisdomTree International Consumer Staples Sector Fund 15
WisdomTree International Energy Sector Fund 18
WisdomTree International Financial Sector Fund 21
WisdomTree International Health Care Sector Fund 24
WisdomTree International Industrial Sector Fund 27
WisdomTree International Technology Sector Fund 30
WisdomTree International Utilities Sector Fund 33
WisdomTree International Real Estate Fund 36
Management 39
Investment Adviser 39
Sub-Adviser 39
Portfolio Managers 40
Portfolio Holdings Information 40
Buying and Selling Shares 40
Share Trading Prices 41
Determination of Net Asset Value 41
Dividends and Distributions 42
Book Entry 42
Delivery of Shareholder Documents - Householding 42
Frequent Purchases and Redemptions of Fund Shares 42
Investments by Registered Investment Companies 42
Taxes 43
Taxes on Distributions 43
Taxes When Fund Shares are Sold 44
Taxes on Creation and Redemption of Creation Units 44
Creation and Redemption 44
Authorized Participants and the Continuous Offering of Shares 45
Creation and Redemption Transaction Fees for Creation Units 45
Distribution 46
Additional Notices 46
Financial Highlights 48
Frequency Distribution of Discounts & Premiums 54
--------------------------------------------------------------------------------
WisdomTree Trust Prospectus 1
Overview
This Prospectus provides the information you need to make an informed decision
about investing in the Funds.* It contains important facts about the Trust as a
whole and each Fund in particular.
Each Fund is an exchange-traded fund ("ETF"). ETFs are index funds whose shares
are listed on a stock exchange and traded like equity securities at market
prices. ETFs, such as the Funds, allow you to buy or sell shares of a Fund that
represent the collective performance of a selected group of securities. ETFs are
designed to add the flexibility, ease and liquidity of stock-trading to the
benefits of traditional index-fund investing.
WisdomTree Asset Management, Inc. ("WisdomTree Asset Management") is the
investment adviser to each Fund. WisdomTree Investments, Inc. ("WisdomTree
Investments") is the parent company of WisdomTree Asset Management.
Investment Objective
Each Fund seeks investment returns that closely correspond to the price and
yield performance, before fees and expenses, of a particular index ("Index" or
"Dividend Index") developed by WisdomTree Investments. Each Index consists of
dividend-paying securities in the market suggested by its name that meet
specific criteria developed by WisdomTree Investments.
Principal Investment Strategies
Each Fund tracks a specific international Index created by WisdomTree
Investments. Each Fund seeks investment returns that closely correspond to the
price and yield performance, before fees and expenses, of its underlying Index.
The WisdomTree Indexes are "fundamentally weighted." The Dividend Indexes differ
from most traditional indexes in that the proportion, or "weighting", of the
securities in each Dividend Index is based on a measure of fundamental value.
The Dividend Indexes are weighted based on either the amount of cash dividends
that companies in each Index pay or the dividend yield of the companies in each
Index. This means that securities of companies that pay higher amounts of cash
dividends or have higher dividend yields generally will be more heavily weighted
in each Index and Fund. Most traditional indexes and index funds weight their
securities by looking simply at the market capitalization of such securities.
Common stocks, real estate investment trusts, tracking stocks, and holding
companies are eligible for inclusion in each Index. Only regular dividends
(i.e., established or quarterly dividends as opposed to non-recurring or special
dividends) are included in the determination of cash dividends or dividend
yield.
Under normal circumstances, at least 95% of a Fund's total assets (exclusive of
collateral held from securities lending) will be invested in the component
securities of its Index. Each Fund will normally invest at least 80% of its net
assets, plus the amount of any borrowings for investment purposes, in the types
of Securities suggested by its name. Each Fund generally may invest up to 5% of
its total assets in securities not included in its Index, but which the Fund
believes will help it track its Index. For example, a Fund may invest in
securities that are not components of its Index in order to reflect various
corporate actions and other changes to its Index (such as reconstitutions,
additions and deletions). Under normal circumstances, as long as a Fund invests
at least 95% of its total assets in the securities of its Index, it also may
invest its other assets in cash and cash equivalents, as well as in shares of
other investment companies, futures contracts, options on futures contracts,
options, and swaps. WisdomTree Asset Management expects that, over time, the
correlation between each Fund's performance and that of its Index, before fees
and expenses, will be 95% or better.
--------------------------------------------------------------------------------
* "WisdomTree" is a registered mark of WisdomTree Investments and has been
licensed for use by the Trust. WisdomTree Investments has patent
applications pending on the methodology and operation of its Indexes and
the Funds.
2 WisdomTree Trust Prospectus
Each Fund uses a "Representative Sampling" strategy in seeking to track the
performance of its Index. A Fund using a Representative Sampling strategy
generally will invest in a sample of the securities in its Index whose risk,
return and other characteristics (such as dividends paid, industry sector,
country, trading volume and liquidity) closely resemble the risk, return and
other characteristics of the Index as a whole.
Each Fund intends to concentrate (i.e., hold 25% or more of its total assets) in
the securities of the particular industry or group of industries suggested by
its name and the name of its underlying Index.
Principal Risk Factors Common to All Funds
Each Fund is subject to the risks described below. Certain additional risks
associated with a Fund are discussed in the specific section describing that
Fund. Some or all of these risks may adversely affect a Fund's NAV, trading
price, yield, total return and/or its ability to meet its objectives.
Stock Market Risk
The trading price of equity securities fluctuates in response to a variety of
factors. These factors include events impacting a single issuer, as well as
political, market and economic developments that affect specific market segments
and the market as a whole. Each Fund's NAV and market price, like stock prices
generally, will fluctuate within a wide range in response to these factors. As a
result, an investor could lose money over short or even long periods.
Foreign Securities Risk
Investments in non-U.S. securities involve certain risks that may not be present
with investments in U.S. securities. For example, investments in non-U.S.
securities may be subject to risk of loss due to foreign currency fluctuations
or to political or economic instability. 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 close. Each of these factors can make investments in the Fund more volatile
and potentially less liquid than other types of investments.
Currency Risk
Because the Fund's NAV is determined on the basis of U.S. dollars, the U.S.
dollar value of your investment in a 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.
Investment Style Risk
The returns from the types of securities in which a Fund invests may
underperform returns from the various general securities markets or different
asset classes. This may cause a 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.
WisdomTree Trust Prospectus 3
Interest Rate Risk
Each of the underlying Indexes, and therefore the Funds, may be more heavily
weighted than other types of investments in market sectors that are sensitive to
interest rate fluctuations (such as the financial and real estate sectors). The
Funds therefore may be more sensitive to fluctuations in interest rates than
other types of investments. In particular, increases to prevailing interest
rates could have a negative impact on the performance of the Funds.
Investment Approach Risk
Each Fund invests in the securities included in, or representative of, its Index
regardless of their investment merit. The Funds do not attempt to outperform
their Indexes or take defensive positions in declining markets. As a result,
each Fund's performance may be adversely affected by a general decline in the
foreign market segments relating to its Index.
Concentration Risk
Each Index and Fund is concentrated in the industry or group of industries
suggested by its name. A Fund that concentrates, or otherwise invests a large
portion of its assets in a single industry or group of industries, may be more
susceptible to any single economic, market, political or regulatory occurrence
affecting that industry or group of industries. In such case, a Fund may be more
volatile than funds based on broader or less volatile market segments.
Non-Diversification Risk
Each 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. As a result, a 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 a Fund's performance.
Issuer-Specific Risk
Changes in the financial condition of an issuer or counterparty, changes in
specific economic or political conditions that affect a particular type of
security or issuer, and changes in general economic or political conditions can
affect a security's or instrument's value. The value of securities of smaller,
less well-known issuers can be more volatile than that of larger issuers.
Issuer-specific events can have a negative impact on the value of a Fund.
Non-Correlation Risk
The performance of a Fund and its Index may vary somewhat for a variety of
reasons. For example, each Fund incurs operating expenses and portfolio
transaction costs not incurred by its Index. In addition, a Fund may not be
fully invested in the securities of its Index at all times. The use of sampling
techniques may affect a Fund's ability to achieve close correlation with its
Index. A Fund using a Representative Sampling strategy generally can be expected
to have a greater non-correlation risk than a Fund using a Replication strategy.
Management Risk
Because each Fund may not fully replicate its Index and may hold securities not
included in its Index, a Fund is subject to management risk. This is the risk
that the Fund's investment strategy, the implementation of which is subject to a
number of constraints, may not produce the intended results.
4 WisdomTree Trust Prospectus
Market Trading Risk
Although Fund shares are listed on national securities exchanges, there can be
no assurance that an active trading market for Fund shares will develop or be
maintained. If an active market is not maintained, investors may find it
difficult to buy or sell Fund shares. Trading of shares of a Fund on a stock
exchange may be halted if exchange officials deem such action appropriate, if
the Fund is delisted, or if the activation of marketwide "circuit breakers"
halts stock trading generally. If a Fund's shares are delisted, the Fund may
seek to list its shares on another market, merge with another ETF or redeem its
shares at NAV. WisdomTree Asset Management believes that, under normal market
conditions, large market price discounts or premiums to NAV will not be
sustained because of arbitrage opportunities.
Shares of the Funds 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
each Fund will approximate the respective Fund's NAV, there may be times when
the market price and the NAV vary significantly. Thus, you may pay more than NAV
when you buy shares of a Fund in the secondary market, and you may receive less
than NAV when you sell those shares in the secondary market.
The market price of Fund shares during the trading day, like the price of any
exchange-traded security, includes a "bid/ask" spread charged by the exchange
specialist, market makers or other participants that trade the Fund shares. The
bid/ask spread on ETF shares is likely to be larger on ETFs that are traded less
frequently. In addition in times of severe market disruption, the bid/ask spread
can increase significantly. At those times, Fund shares are most likely to be
traded at a discount to NAV, and the discount is likely to be greatest when the
price of shares is falling fastest, which may be the time that you most want to
sell your shares. WisdomTree Asset Management believes that, under normal market
conditions, large market price discounts or premiums to NAV will not be
sustained because of arbitrage opportunities.
Lack of Governmental Insurance or Guarantee
An investment in a Fund is not a bank deposit and it is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
Fiscal Policy Risk
Any repeal or failure to extend the current federal tax treatment of qualified
dividend income could make dividend paying securities less appealing to
investors and could have a negative impact on the performance of the Funds.
WisdomTree Trust Prospectus 5
--------------------------------------------------------------------------------
WisdomTree International Sector Funds
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
WisdomTree International
Basic Materials Sector
Fund
Fund Facts
--------------------------------------------------------------------------------
Cusip Number:
o 97717W752
Exchange Trading Symbol:
o DBN
--------------------------------------------------------------------------------
WisdomTree International Basic Materials Sector Fund
Investment Objective
The Fund seeks to track the price and yield performance, before fees and
expenses, of the WisdomTree International Basic Materials Sector Index. Since
the Fund's investment objective has been adopted as a non-fundamental investment
policy, the Fund's investment objective may be changed without a vote of
shareholders.
Primary Investment Strategies
The Fund employs a "passive management" - or indexing - investment approach
designed to track the performance of the WisdomTree International Basic
Materials Sector Index. The Fund attempts to invest all, or substantially all,
of its assets in the stocks that make up the Index. The Fund generally uses a
Representative Sampling strategy to achieve its investment objective.
Index Description
The WisdomTree International Basic Materials Sector Index measures the
performance of companies in developed markets outside of the U.S. that pay
regular cash dividends on shares of common stock that WisdomTree Investments
classifies as being part of the "International Basic Materials" sector. The
Index is derived from the WisdomTree Dividend Index of Europe, Far East and
Australasia ("DEFA Index"). Companies in the Index must meet specified
requirements as of the Index measurement date. To be included in the Index,
companies must be incorporated in one of 16 developed-market European countries
included in the WisdomTree DEFA Index, Japan, Hong Kong, Singapore, Australia,
or New Zealand, and must be listed on a major securities exchange in one of
those countries. Companies must have paid at least $5 million in cash dividends
on their common stock in the annual cycle prior to the most recent Index
measurement date and must also satisfy specified liquidity and other
requirements. Companies are weighted in the Index based on regular cash
dividends paid. The Index includes the following types of companies: metals and
mining, chemicals, construction materials and paper and forest products. As of
June 30, 2008, approximately 66% of the Index consisted of companies with market
capitalizations over $10 billion, and approximately 25% of the Index consisted
of securities of companies with market capitalizations between $2 and $10
billion.
Primary Investment Risks
You can lose money on your investment in the Fund. For information about
the risks of investing in the Fund, see the section herein entitled
"Principal Risk Factors Common to All Funds." In addition, the Fund is
subject to the following potential risks. As with all potential risks,
this could decrease the value of your Fund investment.
o Geographic Concentration Risk. To the extent the Fund invests a
significant portion of its assets in the securities of a single country or
region it is more likely to be
6 WisdomTree Trust Prospectus
impacted by events or conditions affecting that country or region. For
example, political and economic conditions and changes in regulatory, tax,
or economic policy in a country could significantly affect the market in
that country and in surrounding or related countries and have a negative
impact on a Fund's performance. The Fund generally invests a relatively
large percentage of its assets in companies organized in the Australia,
Germany, Japan or the United Kingdom.
o Basic Materials Investing. The Fund invests substantially all of its
assets in one sector of the market and as such is particularly sensitive
to risks to the International Basic Materials sector. These risks include
but are not limited to: commodity price volatility, sluggish demand for
basic materials, world economic growth, product liability for
environmental damage, depletion of natural resources, technological
progress, and government regulations.
o Mid-Capitalization Investing. The Fund invests a relatively large
percentage of its assets in securities of mid-capitalization companies.
The securities of mid-capitalization companies may be more vulnerable to
adverse issuer, market, political, or economic developments than the
market as a whole or other types of securities. As a result, the Fund may
be more volatile than funds that invest in larger, more established
companies.
Performance Information
The bar chart that follows shows the annual total returns of the Fund for each
full calendar year since the Fund commenced operations. The table that follows
the bar chart shows the Fund's average annual total returns, both before and
after taxes. The bar chart and table provide an indication of the risks of
investing in the Fund by showing the Fund's performance for calendar year 2007
and showing how the Fund's average annual returns compared with its underlying
index and another measure of market performance. All returns assume reinvestment
of dividends and distributions. The Fund's past performance (before and after
taxes) is not necessarily an indication of how the Fund will perform in the
future.
[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
2007
------
Total Rerurn 32.26%
The Fund's year-to-date total return as of June 30, 2008 was 3.46%.
Best and Worst Quarter Returns (for the period reflected in the bar chart above)
--------------------------------------------------------------------------------
Return Quarter/Year
--------------------------------------------------------------------------------
Highest Return 14.55% 2/2007
--------------------------------------------------------------------------------
Lowest Return (4.34)% 4/2007
--------------------------------------------------------------------------------
WisdomTree Trust Prospectus 7
Average Annual Total Returns as of December 31, 2007
-------------------------------------------------------------------------------------------
WisdomTree International Basic Materials Sector Fund 1 Year Since Inception(1)
-------------------------------------------------------------------------------------------
Return before taxes 32.26% 38.46%
-------------------------------------------------------------------------------------------
Return after taxes on distributions(2) 31.92% 38.17%
-------------------------------------------------------------------------------------------
Return after taxes on distributions and sale of Fund shares 20.96% 32.68%
-------------------------------------------------------------------------------------------
S&P Global 1200 Materials Sector Index(3)
(reflects no deduction for fees, expenses or taxes) 38.30% 42.57%
-------------------------------------------------------------------------------------------
WisdomTree International Basic Materials Sector Index
(reflects no deduction for fees, expenses or taxes) 34.00% 40.31%
-------------------------------------------------------------------------------------------
(1) The Fund commenced operations on October 13, 2006.
(2) After-tax returns are calculated using the highest historical individual
federal marginal income tax rates and do not reflect the impact of state
and local taxes. Actual after-tax returns depend on your tax situation and
may differ from those shown and are not relevant if you hold your shares
through tax-deferred arrangements, such as 401(k) plans or individual
retirement accounts. In some cases the return after taxes may exceed the
return before taxes due to an assumed tax benefit from any losses on a
sale of Fund shares at the end of the measurement period.
(3) The S&P Global 1200 Sector Indexes highlight sector characteristics of the
S&P Global 1200 Index, a global index, that includes approximately 70% of
the world's capital markets.
Fees and Expenses
The following table describes the fees and expenses you may pay if you buy and
hold shares of the Fund. The fees are expressed as a percentage of the Fund's
average net assets. You may also incur customary brokerage charges when buying
or selling Fund shares.
--------------------------------------------------------------------------------------------
Shareholder Fees None
(fees paid directly from your investment, but see the Creation
Transaction Fees and Redemption Transaction Fees section below)
--------------------------------------------------------------------------------------------
Annual Fund Operating Expenses (expenses deducted from Fund assets)
--------------------------------------------------------------------------------------------
Management Fees 0.58%
--------------------------------------------------------------------------------------------
Distribution and/or Service (12b-1) Fees None
--------------------------------------------------------------------------------------------
Other Expenses(a) 0.00%
--------------------------------------------------------------------------------------------
Total Annual Fund Operating Expenses 0.58%
--------------------------------------------------------------------------------------------
(a) WisdomTree Asset Management has agreed to pay all operating expenses of
the Fund, except interest expenses and taxes, any brokerage expenses,
future distribution fees or expenses, and extraordinary expenses through
July 31, 2009. WisdomTree Asset Management receives a fee of up to .0044%
in exchange for providing certain non-advisory services to the Fund.
The following example is intended to help retail investors compare the cost of
investing in the Fund with the cost of investing in other funds. It illustrates
the hypothetical expenses that such investors would incur over various periods
if they invest $10,000 in the Fund for the time periods indicated and then
redeemed all of the shares at the end of those periods. This example assumes
that the Fund provides a return of 5% a year and that operating expenses remain
the same. This example does not include the brokerage commission that retail
investors may pay to buy and sell shares of the Fund. Although your actual costs
may be higher or lower, based on these assumptions, your costs would be:
-------------------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
-------------------------------------------------------------------------------------------
$59 $186 $324 $726
-------------------------------------------------------------------------------------------
You would pay the following expenses if you did not redeem your shares:
-------------------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
-------------------------------------------------------------------------------------------
$59 $186 $324 $726
-------------------------------------------------------------------------------------------
8 WisdomTree Trust Prospectus
--------------------------------------------------------------------------------
WisdomTree International Sector Funds
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
WisdomTree International
Communications Sector
Fund
Fund Facts
--------------------------------------------------------------------------------
Cusip Number:
o 97717W745
Exchange Trading Symbol:
o DGG
--------------------------------------------------------------------------------
WisdomTree International Communications Sector Fund
Investment Objective
The Fund seeks to track the price and yield performance, before fees and
expenses, of the WisdomTree International Communications Sector Index. Since the
Fund's investment objective has been adopted as a non-fundamental investment
policy, the Fund's investment objective may be changed without a vote of
shareholders.
Primary Investment Strategies
The Fund employs a "passive management" - or indexing - investment approach
designed to track the performance of the WisdomTree International Communications
Sector Index. The Fund attempts to invest all, or substantially all, of its
assets in the stocks that make up the Index. The Fund generally uses a
Representative Sampling strategy to achieve its investment objective.
Index Description
The WisdomTree International Communications Sector Index measures the
performance of companies in developed markets outside of the U.S. that pay
regular cash dividends on shares of common stock that WisdomTree Investments
classifies as being part of the "International Communications" sector. The Index
is derived from the WisdomTree Dividend Index of Europe, Far East and
Australasia ("DEFA Index"). Companies in the Index must meet specified
requirements as of the Index measurement date. To be included in the Index,
companies must be incorporated in one of 16 developed-market European countries
included in the WisdomTree DEFA Index, Japan, Hong Kong, Singapore, Australia,
or New Zealand, and must be listed on a major securities exchange in one of
those countries. Companies must have paid at least $5 million in cash dividends
on their common stock in the annual cycle prior to the most recent Index
measurement date and must also satisfy specified liquidity and other
requirements. Companies are weighted in the Index based on regular cash
dividends paid. The Index includes the following types of companies: diversified
telecommunications and wireless telecommunications services. As of June 30,
2008, approximately 89% of the Index consisted of companies with market
capitalizations over $10 billion.
Primary Investment Risks
You can lose money on your investment in the Fund. For information about the
risks of investing in the Fund, see the section herein entitled "Principal Risk
Factors Common to All Funds." In addition, the Fund is subject to the following
potential risks. As with all potential risks, this could decrease the value of
your Fund investment.
o Geographic Concentration Risk. To the extent the Fund invests a
significant portion of its assets in the securities of a single country or
region it is more likely to be impacted by events or conditions affecting
that country or region. For example,
WisdomTree Trust Prospectus 9
political and economic conditions and changes in regulatory, tax, or
economic policy in a country could significantly affect the market in that
country and in surrounding or related countries and have a negative impact
on a Fund's performance. The Fund generally invests a relatively large
percentage of its assets in companies organized in the United Kingdom.
o Communications Investing. The Fund invests substantially all of its assets
in one sector of the market and as such is particularly sensitive to risks
to the International Communications sector. These risks include but are
not limited to: rapid technological developments, intensive capital usage,
and government regulation.
Performance Information
The bar chart that follows shows the annual total returns of the Fund for each
full calendar year since the Fund commenced operations. The table that follows
the bar chart shows the Fund's average annual total returns, both before and
after taxes. The bar chart and table provide an indication of the risks of
investing in the Fund by showing the Fund's performance for calendar year 2007
and showing how the Fund's average annual returns compared with its underlying
index and another measure of market performance. All returns assume reinvestment
of dividends and distributions. The Fund's past performance (before and after
taxes) is not necessarily an indication of how the Fund will perform in the
future.
[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
2007
-----
Total Return 27.39%
The Fund's year-to-date total return as of June 30, 2008 was (17.85)%.
Best and Worst Quarter Returns (for the period reflected in the bar chart above)
----------------------------------------------------------------------------------------------------------
Return Quarter/Year
----------------------------------------------------------------------------------------------------------
Highest Return 10.29% 2/2007
----------------------------------------------------------------------------------------------------------
Lowest Return 1.36% 1/2007
----------------------------------------------------------------------------------------------------------
Average Annual Total Returns as of December 31, 2007
----------------------------------------------------------------------------------------------------------
WisdomTree International Communications Sector Fund 1 Year Since Inception(1)
----------------------------------------------------------------------------------------------------------
Return before taxes 27.39% 35.23%
----------------------------------------------------------------------------------------------------------
Return after taxes on distributions(2) 26.37% 34.10%
----------------------------------------------------------------------------------------------------------
Return after taxes on distributions and sale of Fund shares 17.78% 29.41%
----------------------------------------------------------------------------------------------------------
S&P Global 1200 Telecommunications Services Sector Index(3)
(reflects no deduction for fees, expenses or taxes) 26.72% 31.45%
----------------------------------------------------------------------------------------------------------
WisdomTree International Communications Sector Index
(reflects no deduction for fees, expenses or taxes) 27.66% 36.35%
----------------------------------------------------------------------------------------------------------
(1) The Fund commenced operations on October 13, 2006.
(2) After-tax returns are calculated using the highest historical individual
federal marginal income tax rates and do not reflect the impact of state
and local taxes. Actual after-tax returns depend on your tax situation and
may differ from those shown and are not relevant if you hold your shares
through tax-deferred arrangements, such as 401(k) plans or individual
retirement accounts. In some cases the return after taxes may exceed the
return before taxes due to an assumed tax benefit from any losses on a
sale of Fund shares at the end of the measurement period.
(3) The S&P Global 1200 Sector Indexes highlight sector characteristics of the
S&P Global 1200 Index, a global index, that includes approximately 70% of
the world's capital markets.
10 WisdomTree Trust Prospectus
Fees and Expenses
The following table describes the fees and expenses you may pay if you buy and
hold shares of the Fund. The fees are expressed as a percentage of the Fund's
average net assets. You may also incur customary brokerage charges when buying
or selling Fund shares.
--------------------------------------------------------------------------------------------------
Shareholder Fees None
(fees paid directly from your investment, but see the Creation Transaction Fees
and Redemption Transaction Fees section below)
--------------------------------------------------------------------------------------------------
Annual Fund Operating Expenses (expenses deducted from Fund assets)
--------------------------------------------------------------------------------------------------
Management Fees 0.58%
--------------------------------------------------------------------------------------------------
Distribution and/or Service (12b-1) Fees None
--------------------------------------------------------------------------------------------------
Other Expenses(a) 0.00%
--------------------------------------------------------------------------------------------------
Total Annual Fund Operating Expenses 0.58%
--------------------------------------------------------------------------------------------------
(a) WisdomTree Asset Management has agreed to pay all operating expenses of
the Fund, except interest expenses and taxes, any brokerage expenses,
future distribution fees or expenses, and extraordinary expenses through
July 31, 2009. WisdomTree Asset Management receives a fee of up to .0044%
in exchange for providing certain non-advisory services to the Fund.
The following example is intended to help retail investors compare the cost of
investing in the Fund with the cost of investing in other funds. It illustrates
the hypothetical expenses that such investors would incur over various periods
if they invest $10,000 in the Fund for the time periods indicated and then
redeemed all of the shares at the end of those periods. This example assumes
that the Fund provides a return of 5% a year and that operating expenses remain
the same. This example does not include the brokerage commission that retail
investors may pay to buy and sell shares of the Fund. Although your actual costs
may be higher or lower, based on these assumptions, your costs would be:
--------------------------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
--------------------------------------------------------------------------------------------------
$59 $186 $324 $726
--------------------------------------------------------------------------------------------------
You would pay the following expenses if you did not redeem your shares:
--------------------------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
--------------------------------------------------------------------------------------------------
$59 $186 $324 $726
--------------------------------------------------------------------------------------------------
WisdomTree Trust Prospectus 11
--------------------------------------------------------------------------------
WisdomTree International Sector Funds
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
WisdomTree International
Consumer Discretionary
Sector Fund (formerly, the
WisdomTree International
Consumer Cyclical Sector
Fund)
Fund Facts
--------------------------------------------------------------------------------
Cusip Number:
o 97717W737
Exchange Trading Symbol:
o DPC
--------------------------------------------------------------------------------
WisdomTree International Consumer Discretionary Sector Fund
Investment Objective
The Fund seeks to track the price and yield performance, before fees and
expenses, of the WisdomTree International Consumer Discretionary Sector Index.
Since the Fund's investment objective has been adopted as a non-fundamental
investment policy, the Fund's investment objective may be changed without a vote
of shareholders.
Primary Investment Strategies
The Fund employs a "passive management" - or indexing - investment approach
designed to track the performance of the WisdomTree International Consumer
Discretionary Sector Index. The Fund attempts to invest all, or substantially
all, of its assets in the stocks that make up the Index. The Fund generally uses
a Representative Sampling strategy to achieve its investment objective.
Index Description
The WisdomTree International Consumer Discretionary Sector Index measures the
performance of companies in developed markets outside of the U.S. that pay
regular cash dividends on shares of common stock that WisdomTree Investments
classifies as being part of the "International Consumer Discretionary" sector.
The Index is derived from the WisdomTree Dividend Index of Europe, Far East and
Australasia ("DEFA Index"). Companies in the Index must meet specified
requirements as of the Index measurement date. To be included in the Index,
companies must be incorporated in one of 16 developed-market European countries
included in the WisdomTree DEFA Index, Japan, Hong Kong, Singapore, Australia,
or New Zealand, and must be listed on a major securities exchange in one of
those countries. Companies must have paid at least $5 million in cash dividends
on their common stock in the annual cycle prior to the most recent Index
measurement date and must also satisfy specified liquidity and other
requirements. Companies are weighted in the Index based on regular cash
dividends paid. The Index includes the following types of companies:
automobiles, media, retail and leisure, luxury goods and household goods. As of
June 30, 2008, approximately 56% of the Index consisted of companies with market
capitalizations over $10 billion and approximately 27% of the Index consisted of
companies with market capitalizations between $2 and $10 billion.
Primary Investment Risks
You can lose money on your investment in the Fund. For information about the
risks of investing in the Fund, see the section herein entitled "Principal Risk
Factors Common to All Funds." In addition, the Fund is subject to the following
potential risks. As with all potential risks, this could decrease the value of
your Fund investment.
o Geographic Concentration Risk. To the extent the Fund invests a
significant portion of its assets in the securities of a single country or
region it is more likely to be impacted by events or conditions affecting
that country or region. For example,
12 WisdomTree Trust Prospectus
political and economic conditions and changes in regulatory, tax, or
economic policy in a country could significantly affect the market in that
country and in surrounding or related countries and have a negative impact
on a Fund's performance. The Fund generally invests a relatively large
percentage of its assets in companies organized in France, Japan or the
United Kingdom.
o Consumer Discretionary Investing. The Fund invests substantially all of
its assets in one sector of the market and as such is particularly
sensitive to risks to the International Consumer Discretionary sector.
These risks include but are not limited to: economic growth, worldwide
demand, and consumers' disposable income levels and propensity to spend.
o Mid-Capitalization Investing. The Fund invests a relatively large
percentage of its assets in securities of mid-capitalization companies.
The securities of mid-capitalization companies may be more vulnerable to
adverse issuer, market, political, or economic developments than the
market as a whole or other types of securities. As a result, the Fund may
be more volatile than funds that invest in larger, more established
companies.
Performance Information
The bar chart that follows shows the annual total returns of the Fund for each
full calendar year since the Fund commenced operations. The table that follows
the bar chart shows the Fund's average annual total returns, both before and
after taxes. The bar chart and table provide an indication of the risks of
investing in the Fund by showing the Fund's performance for calendar year 2007
and showing how the Fund's average annual returns compared with its underlying
index and another measure of market performance. All returns assume reinvestment
of dividends and distributions. The Fund's past performance (before and after
taxes) is not necessarily an indication of how the Fund will perform in the
future.
[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
2007
-----
Total Return 5.25%
The Fund's year-to-date total return as of June 30, 2008 was (17.62)%.
Best and Worst Quarter Returns (for the period reflected in the bar chart above)
----------------------------------------------------------------------------------------------------------
Return Quarter/Year
----------------------------------------------------------------------------------------------------------
Highest Return 7.49% 1/2007
----------------------------------------------------------------------------------------------------------
Lowest Return (5.91)% 4/2007
----------------------------------------------------------------------------------------------------------
WisdomTree Trust Prospectus 13
Average Annual Total Returns as of December 31, 2007
----------------------------------------------------------------------------------------------------------
WisdomTree International Consumer Discretionary Sector Fund 1 Year Since Inception(1)
----------------------------------------------------------------------------------------------------------
Return before taxes 5.25% 14.67%
----------------------------------------------------------------------------------------------------------
Return after taxes on distributions(2) 4.40% 13.86%
----------------------------------------------------------------------------------------------------------
Return after taxes on distributions and sale of Fund shares 3.40% 12.02%
----------------------------------------------------------------------------------------------------------
S&P Global 1200 Consumer Discretionary Sector Index(3)
(reflects no deduction for fees, expenses or taxes) (3.15)% 3.27%
----------------------------------------------------------------------------------------------------------
WisdomTree International Consumer Discretionary Sector Index
(reflects no deduction for fees, expenses or taxes) 4.65% 14.15%
----------------------------------------------------------------------------------------------------------
(1) The Fund commenced operations on October 13, 2006.
(2) After-tax returns are calculated using the highest historical individual
federal marginal income tax rates and do not reflect the impact of state
and local taxes. Actual after-tax returns depend on your tax situation and
may differ from those shown and are not relevant if you hold your shares
through tax-deferred arrangements, such as 401(k) plans or individual
retirement accounts. In some cases the return after taxes may exceed the
return before taxes due to an assumed tax benefit from any losses on a
sale of Fund shares at the end of the measurement period.
(3) The S&P Global 1200 Sector Indexes highlight sector characteristics of the
S&P Global 1200 Index, a global index that includes approximately 70% of
the world's capital markets.
Fees and Expenses
The following table describes the fees and expenses you may pay if you buy and
hold shares of the Fund. The fees are expressed as a percentage of the Fund's
average net assets. You may also incur customary brokerage charges when buying
or selling Fund shares.
----------------------------------------------------------------------------------------------------------
Shareholder Fees None
(fees paid directly from your investment, but see the Creation Transaction Fees
and Redemption Transaction Fees section below)
----------------------------------------------------------------------------------------------------------
Annual Fund Operating Expenses (expenses deducted from Fund assets)
----------------------------------------------------------------------------------------------------------
Management Fees 0.58%
----------------------------------------------------------------------------------------------------------
Distribution and/or Service (12b-1) Fees None
----------------------------------------------------------------------------------------------------------
Other Expenses(a) 0.00%
----------------------------------------------------------------------------------------------------------
Total Annual Fund Operating Expenses 0.58%
----------------------------------------------------------------------------------------------------------
(a) WisdomTree Asset Management has agreed to pay all operating expenses of
the Fund, except interest expenses and taxes, any brokerage expenses,
future distribution fees or expenses, and extraordinary expenses through
July 31, 2009. WisdomTree Asset Management receives a fee of up to .0044%
in exchange for providing certain non-advisory services to the Fund.
The following example is intended to help retail investors compare the cost of
investing in the Fund with the cost of investing in other funds. It illustrates
the hypothetical expenses that such investors would incur over various periods
if they invest $10,000 in the Fund for the time periods indicated and then
redeemed all of the shares at the end of those periods. This example assumes
that the Fund provides a return of 5% a year and that operating expenses remain
the same. This example does not include the brokerage commission that retail
investors may pay to buy and sell shares of the Fund. Although your actual costs
may be higher or lower, based on these assumptions, your costs would be:
----------------------------------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
----------------------------------------------------------------------------------------------------------
$59 $186 $324 $726
----------------------------------------------------------------------------------------------------------
You would pay the following expenses if you did not redeem your shares:
----------------------------------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
----------------------------------------------------------------------------------------------------------
$59 $186 $324 $726
----------------------------------------------------------------------------------------------------------
14 WisdomTree Trust Prospectus
--------------------------------------------------------------------------------
WisdomTree International Sector Funds
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
WisdomTree International
Consumer Staples Sector
Fund (formerly, the
WisdomTree International
Consumer Non-Cyclical
Sector Fund)
Fund Facts
--------------------------------------------------------------------------------
Cusip Number:
o 97717W729
Exchange Trading Symbol:
o DPN
--------------------------------------------------------------------------------
WisdomTree International Consumer Staples Sector Fund
Investment Objective
The Fund seeks to track the price and yield performance, before fees and
expenses, of the WisdomTree International Consumer Staples Sector Index. Since
the Fund's investment objective has been adopted as a non-fundamental investment
policy, the Fund's investment objective may be changed without a vote of
shareholders.
Primary Investment Strategies
The Fund employs a "passive management" - or indexing - investment approach
designed to track the performance of the WisdomTree International Consumer
Staples Sector Index. The Fund attempts to invest all, or substantially all, of
its assets in the stocks that make up the Index. The Fund generally uses a
Representative Sampling strategy to achieve its investment objective.
Index Description
The WisdomTree International Consumer Staples Sector Index measures the
performance of companies in developed markets outside of the U.S. that pay
regular cash dividends on shares of common stock that WisdomTree Investments
classifies as being part of the "International Consumer Staples" sector. The
Index is derived from the WisdomTree Dividend Index of Europe, Far East and
Australasia ("DEFA Index"). Companies in the Index must meet specified
requirements as of the Index measurement date. To be included in the Index,
companies must be incorporated in one of 16 developed-market European countries
included in the WisdomTree DEFA Index, Japan, Hong Kong, Singapore, Australia,
or New Zealand, and must be listed on a major securities exchange in one of
those countries. Companies must have paid at least $5 million in cash dividends
on their common stock in the annual cycle prior to the most recent Index
measurement date and must also satisfy specified liquidity and other
requirements. Companies are weighted in the Index based on regular cash
dividends paid. The Index includes the following types of companies: food
products, beverages, personal products and household products. As of June 30,
2008, approximately 76% of the Index consisted of companies with market
capitalizations over $10 billion.
Primary Investment Risks
You can lose money on your investment in the Fund. For information about the
risks of investing in the Fund, see the section herein entitled "Principal Risk
Factors Common to All Funds." In addition, the Fund is subject to the following
potential risks. As with all potential risks, this could decrease the value of
your Fund investment.
o Geographic Concentration Risk. To the extent the Fund invests a
significant portion of its assets in the securities of a single country or
region it is more likely to be impacted by events or conditions affecting
that country or region. For example, political and economic conditions and
changes in regulatory, tax, or economic policy
WisdomTree Trust Prospectus 15
in a country could significantly affect the market in that country and in
surrounding or related countries and have a negative impact on a Fund's
performance. The Fund generally invests a relatively large percentage of
its assets in companies organized in the United Kingdom.
o Consumer Staples Investing. The Fund invests substantially all of its
assets in one sector of the market and as such is particularly sensitive
to risks to the International Consumer Staples sector. These risks include
but are not limited to: changes in price and availability of underlying
commodities, rising energy prices and global and economic conditions.
Performance Information
The bar chart that follows shows the annual total returns of the Fund for each
full calendar year since the Fund commenced operations. The table that follows
the bar chart shows the Fund's average annual total returns, both before and
after taxes. The bar chart and table provide an indication of the risks of
investing in the Fund by showing the Fund's performance for calendar year 2007
and showing how the Fund's average annual returns compared with its underlying
index and another measure of market performance. All returns assume reinvestment
of dividends and distributions. The Fund's past performance (before and after
taxes) is not necessarily an indication of how the Fund will perform in the
future.
[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
2007
-----
Total Return 14.75%
The Fund's year-to-date total return as of June 30, 2008 was (13.54)%.
Best and Worst Quarter Returns (for the period reflected in the bar chart above)
----------------------------------------------------------------------------------------------------------
Return Quarter/Year
----------------------------------------------------------------------------------------------------------
Highest Return 5.93% 1/2007
----------------------------------------------------------------------------------------------------------
Lowest Return 2.20% 3/2007
----------------------------------------------------------------------------------------------------------
Average Annual Total Returns as of December 31, 2007
----------------------------------------------------------------------------------------------------------
WisdomTree International Consumer Staples Sector Fund 1 Year Since Inception(1)
----------------------------------------------------------------------------------------------------------
Return before taxes 14.75% 18.50%
----------------------------------------------------------------------------------------------------------
Return after taxes on distributions(2) 14.08% 17.91%
----------------------------------------------------------------------------------------------------------
Return after taxes on distributions and sale of Fund shares 9.58% 15.42%
----------------------------------------------------------------------------------------------------------
S&P Global 1200 Consumer Staples Sector Index(3)
(reflects no deduction for fees, expenses or taxes) 19.04% 21.40%
----------------------------------------------------------------------------------------------------------
WisdomTree International Consumer Staples Sector Index
(reflects no deduction for fees, expenses or taxes) 13.05% 17.08%
----------------------------------------------------------------------------------------------------------
(1) The Fund commenced operations on October 13, 2006.
(2) After-tax returns are calculated using the highest historical individual
federal marginal income tax rates and do not reflect the impact of state
and local taxes. Actual after-tax returns depend on your tax situation and
may differ from those shown and are not relevant if you hold your shares
through tax-deferred arrangements, such as 401(k) plans or individual
retirement accounts. In some cases the return after taxes may exceed the
return before taxes due to an assumed tax benefit from any losses on a
sale of Fund shares at the end of the measurement period.
(3) The S&P Global 1200 Sector Indexes highlight sector characteristics of the
S&P Global 1200 Index, a global index, that includes approximately 70% of
the world's capital markets.
16 WisdomTree Trust Prospectus
Fees and Expenses
The following table describes the fees and expenses you may pay if you buy and
hold shares of the Fund. The fees are expressed as a percentage of the Fund's
average net assets. You may also incur customary brokerage charges when buying
or selling Fund shares.
-----------------------------------------------------------------------------------------
Shareholder Fees None
(fees paid directly from your investment, but see the Creation Transaction Fees
and Redemption Transaction Fees section below)
-----------------------------------------------------------------------------------------
Annual Fund Operating Expenses (expenses deducted from Fund assets)
-----------------------------------------------------------------------------------------
Management Fees 0.58%
-----------------------------------------------------------------------------------------
Distribution and/or Service (12b-1) Fees None
-----------------------------------------------------------------------------------------
Other Expenses(a) 0.00%
-----------------------------------------------------------------------------------------
Total Annual Fund Operating Expenses 0.58%
-----------------------------------------------------------------------------------------
(a) WisdomTree Asset Management has agreed to pay all operating expenses of
the Fund, except interest expenses and taxes, any brokerage expenses,
future distribution fees or expenses, and extraordinary expenses through
July 31, 2009. WisdomTree Asset Management receives a fee of up to .0044%
in exchange for providing certain non-advisory services to the Fund.
The following example is intended to help retail investors compare the cost of
investing in the Fund with the cost of investing in other funds. It illustrates
the hypothetical expenses that such investors would incur over various periods
if they invest $10,000 in the Fund for the time periods indicated and then
redeemed all of the shares at the end of those periods. This example assumes
that the Fund provides a return of 5% a year and that operating expenses remain
the same. This example does not include the brokerage commission that retail
investors may pay to buy and sell shares of the Fund. Although your actual costs
may be higher or lower, based on these assumptions, your costs would be:
-----------------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
-----------------------------------------------------------------------------------------
$59 $186 $324 $726
-----------------------------------------------------------------------------------------
You would pay the following expenses if you did not redeem your shares:
-----------------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
-----------------------------------------------------------------------------------------
$59 $186 $324 $726
-----------------------------------------------------------------------------------------
WisdomTree Trust Prospectus 17
--------------------------------------------------------------------------------
WisdomTree International Sector Funds
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
WisdomTree International
Energy Sector Fund
Fund Facts
--------------------------------------------------------------------------------
Cusip Number:
o 97717W711
Exchange Trading Symbol:
o DKA
--------------------------------------------------------------------------------
WisdomTree International Energy Sector Fund
Investment Objective
The Fund seeks to track the price and yield performance, before fees and
expenses, of the WisdomTree International Energy Sector Index. Since the Fund's
investment objective has been adopted as a non-fundamental investment policy,
the Fund's investment objective may be changed without a vote of shareholders.
Primary Investment Strategies
The Fund employs a "passive management" - or indexing - investment approach
designed to track the performance of the WisdomTree International Energy Sector
Index. The Fund attempts to invest all, or substantially all, of its assets in
the stocks that make up the Index. The Fund generally uses a Representative
Sampling strategy to achieve its investment objective.
Index Description
The WisdomTree International Energy Sector Index measures the performance of
companies in developed markets outside of the U.S. that pay regular cash
dividends on shares of common stock that WisdomTree Investments classifies as
being part of the "International Energy" sector. The Index is derived from the
WisdomTree Dividend Index of Europe, Far East and Australasia ("DEFA Index").
Companies in the Index must meet specified requirements as of the Index
measurement date. To be included in the Index, companies must be incorporated in
one of 16 developed-market European countries included in the WisdomTree DEFA
Index, Japan, Hong Kong, Singapore, Australia, or New Zealand, and must be
listed on a major securities exchange in one of those countries. Companies must
have paid at least $5 million in cash dividends on their common stock in the
annual cycle prior to the most recent Index measurement date and must also
satisfy specified liquidity and other requirements. Companies are weighted in
the Index based on regular cash dividends paid. The Index includes the following
types of companies: oil, gas, energy equipment and energy services. As of June
30, 2008, approximately 67% of the Index consisted of companies with market
capitalizations over $10 billion.
Primary Investment Risks
You can lose money on your investment in the Fund. For information about the
risks of investing in the Fund, see the section herein entitled "Principal Risk
Factors Common to All Funds." In addition, the Fund is subject to the following
potential risks. As with all potential risks, this could decrease the value of
your Fund investment.
o Geographic Concentration Risk. To the extent the Fund invests a
significant portion of its assets in the securities of a single country or
region it is more likely to be impacted by events or conditions affecting
that country or region. For example, political and economic conditions and
changes in regulatory, tax, or economic policy
18 WisdomTree Trust Prospectus
in a country could significantly affect the market in that country and in
surrounding or related countries and have a negative impact on a Fund's
performance. The Fund generally invests a relatively large percentage of
its assets in companies organized in the United Kingdom.
o Energy Investing. The Fund invests substantially all of its assets in one
sector of the market and as such is particularly sensitive to risks to the
International Energy sector. These risks include but are not limited to:
economic growth, worldwide demand, political instability in the Middle
East, and volatile oil prices.
o Mid-Capitalization Investing. The Fund invests a relatively large
percentage of its assets in securities of mid-capitalization companies.
The securities of mid-capitalization companies may be more vulnerable to
adverse issuer, market, political, or economic developments than the
market as a whole or other types of securities. As a result, the Fund may
be more volatile than funds that invest in larger, more established
companies.
Performance Information
The bar chart that follows shows the annual total returns of the Fund for each
full calendar year since the Fund commenced operations. The table that follows
the bar chart shows the Fund's average annual total returns, both before and
after taxes. The bar chart and table provide an indication of the risks of
investing in the Fund by showing the Fund's performance for calendar year 2007
and showing how the Fund's average annual returns compared with its underlying
index and another measure of market performance. All returns assume reinvestment
of dividends and distributions. The Fund's past performance (before and after
taxes) is not necessarily an indication of how the Fund will perform in the
future.
[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
2007
------
Total Return 25.48%
The Fund's year-to-date total return as of June 30, 2008 was 9.52%.
Best and Worst Quarter Returns (for the period reflected in the bar chart above)
--------------------------------------------------------------------------------
Return Quarter/Year
--------------------------------------------------------------------------------
Highest Return 16.81% 2/2007
--------------------------------------------------------------------------------
Lowest Return (0.51)% 4/2007
--------------------------------------------------------------------------------
WisdomTree Trust Prospectus 19
Average Annual Total Returns as of December 31, 2007
-------------------------------------------------------------------------------------------
WisdomTree International Energy Sector Fund 1 Year Since Inception(1)
-------------------------------------------------------------------------------------------
Return before taxes 25.48% 29.87%
-------------------------------------------------------------------------------------------
Return after taxes on distributions(2) 24.77% 29.23%
-------------------------------------------------------------------------------------------
Return after taxes on distributions and sale of Fund shares 16.54% 25.10%
-------------------------------------------------------------------------------------------
S&P Global 1200 Energy Sector Index(3)
(reflects no deduction for fees, expenses or taxes) 30.87% 34.62%
-------------------------------------------------------------------------------------------
WisdomTree International Energy Sector Index
(reflects no deduction for fees, expenses or taxes) 25.31% 30.12%
-------------------------------------------------------------------------------------------
(1) The Fund commenced operations on October 13, 2006.
(2) After-tax returns are calculated using the highest historical individual
federal marginal income tax rates and do not reflect the impact of state
and local taxes. Actual after-tax returns depend on your tax situation and
may differ from those shown and are not relevant if you hold your shares
through tax-deferred arrangements, such as 401(k) plans or individual
retirement accounts. In some cases the return after taxes may exceed the
return before taxes due to an assumed tax benefit from any losses on a
sale of Fund shares at the end of the measurement period.
(3) The S&P Global 1200 Sector Indexes highlight sector characteristics of the
S&P Global 1200 Index, a global index, that includes approximately 70% of
the world's capital markets.
Fees and Expenses
The following table describes the fees and expenses you may pay if you buy and
hold shares of the Fund. The fees are expressed as a percentage of the Fund's
average net assets. You may also incur customary brokerage charges when buying
or selling Fund shares.
-------------------------------------------------------------------------------------------
Shareholder Fees None
(fees paid directly from your investment, but see the Creation Transaction Fees
and Redemption Transaction Fees section below)
-------------------------------------------------------------------------------------------
Annual Fund Operating Expenses (expenses deducted from Fund assets)
-------------------------------------------------------------------------------------------
Management Fees 0.58%
-------------------------------------------------------------------------------------------
Distribution and/or Service (12b-1) Fees None
-------------------------------------------------------------------------------------------
Other Expenses(a) 0.00%
-------------------------------------------------------------------------------------------
Total Annual Fund Operating Expenses 0.58%
-------------------------------------------------------------------------------------------
(a) WisdomTree Asset Management has agreed to pay all operating expenses of
the Fund, except interest expenses and taxes, any brokerage expenses,
future distribution fees or expenses, and extraordinary expenses through
July 31, 2009. WisdomTree Asset Management receives a fee of up to .0044%
in exchange for providing certain non-advisory services to the Fund.
The following example is intended to help retail investors compare the cost of
investing in the Fund with the cost of investing in other funds. It illustrates
the hypothetical expenses that such investors would incur over various periods
if they invest $10,000 in the Fund for the time periods indicated and then
redeemed all of the shares at the end of those periods. This example assumes
that the Fund provides a return of 5% a year and that operating expenses remain
the same. This example does not include the brokerage commission that retail
investors may pay to buy and sell shares of the Fund. Although your actual costs
may be higher or lower, based on these assumptions, your costs would be:
-------------------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
-------------------------------------------------------------------------------------------
$59 $186 $324 $726
-------------------------------------------------------------------------------------------
You would pay the following expenses if you did not redeem your shares:
-------------------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
-------------------------------------------------------------------------------------------
$59 $186 $324 $726
-------------------------------------------------------------------------------------------
20 WisdomTree Trust Prospectus
--------------------------------------------------------------------------------
WisdomTree International Sector Funds
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
WisdomTree International
Financial Sector Fund
Fund Facts
--------------------------------------------------------------------------------
Cusip Number:
o 97717W695
Exchange Trading Symbol:
o DRF
--------------------------------------------------------------------------------
WisdomTree International Financial Sector Fund
Investment Objective
The Fund seeks to track the price and yield performance, before fees and
expenses, of the WisdomTree International Financial Sector Index. Since the
Fund's investment objective has been adopted as a non-fundamental investment
policy, the Fund's investment objective may be changed without a vote of
shareholders.
Primary Investment Strategies
The Fund employs a "passive management" - or indexing - investment approach
designed to track the performance of the WisdomTree International Financial
Sector Index. The Fund attempts to invest all, or substantially all, of its
assets in the stocks that make up the Index. The Fund generally uses a
Representative Sampling strategy to achieve its investment objective.
Index Description
The WisdomTree International Financial Sector Index measures the performance of
companies in developed markets outside of the U.S. that pay regular cash
dividends on shares of common stock that WisdomTree Investments classifies as
being part of the "International Financial" sector. The Index is derived from
the WisdomTree Dividend Index of Europe, Far East and Australasia ("DEFA
Index"). Companies in the Index must meet specified requirements as of the Index
measurement date. To be included in the Index, companies must be incorporated in
one of 16 developed-market European countries included in the WisdomTree DEFA
Index, Japan, Hong Kong, Singapore, Australia, or New Zealand, and must be
listed on a major securities exchange in one of those countries. Companies must
have paid at least $5 million in cash dividends on their common stock in the
annual cycle prior to the most recent Index measurement date and must also
satisfy specified liquidity and other requirements. Companies are weighted in
the Index based on regular cash dividends paid. The Index includes the following
types of companies: commercial banks, insurance, financial services, capital
markets and real estate. As of June 30, 2008, approximately 85% of the Index
consisted of companies with market capitalizations over $10 billion.
Primary Investment Risks
You can lose money on your investment in the Fund. For information about the
risks of investing in the Fund, see the section herein entitled "Principal Risk
Factors Common to All Funds." In addition, the Fund is subject to the following
potential risks. As with all potential risks, this could decrease the value of
your Fund investment.
o Geographic Concentration Risk. To the extent the Fund invests a
significant portion of its assets in the securities of a single country or
region it is more likely to be impacted by events or conditions affecting
that country or region. For example, political and economic conditions and
changes in regulatory, tax, or economic policy
WisdomTree Trust Prospectus 21
in a country could significantly affect the market in that country and in
surrounding or related countries and have a negative impact on a Fund's
performance. The Fund generally invests a relatively large percentage of
its assets in companies organized in the United Kingdom.
o Financial Investing. The Fund invests substantially all of its assets in
one sector of the market and as such is particularly sensitive to risks to
the International Financial sector. These risks include but are not
limited to: interest rate sensitivity, stock market activity, mergers and
acquisition activity, losses on loans, and government regulation.
Performance Information
The bar chart that follows shows the annual total returns of the Fund for each
full calendar year since the Fund commenced operations. The table that follows
the bar chart shows the Fund's average annual total returns, both before and
after taxes. The bar chart and table provide an indication of the risks of
investing in the Fund by showing the Fund's performance for calendar year 2007
and showing how the Fund's average annual returns compared with its underlying
index and another measure of market performance. All returns assume reinvestment
of dividends and distributions. The Fund's past performance (before and after
taxes) is not necessarily an indication of how the Fund will perform in the
future.
[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
2007
-----
Total Return 1.49%
The Fund's year-to-date total return as of June 30, 2008 was (20.52)%.
Best and Worst Quarter Returns (for the period reflected in the bar chart above)
-------------------------------------------------------------------------------------------
Return Quarter/Year
-------------------------------------------------------------------------------------------
Highest Return 3.91% 2/2007
-------------------------------------------------------------------------------------------
Lowest Return (4.27)% 4/2007
-------------------------------------------------------------------------------------------
Average Annual Total Returns as of December 31, 2007
-------------------------------------------------------------------------------------------
WisdomTree International Financial Sector Fund 1 Year Since Inception(1)
-------------------------------------------------------------------------------------------
Return before taxes 1.49% 7.66%
-------------------------------------------------------------------------------------------
Return after taxes on distributions(2) 0.44% 6.69%
-------------------------------------------------------------------------------------------
Return after taxes on distributions and sale of Fund shares 0.95% 5.95%
-------------------------------------------------------------------------------------------
S&P Global 1200 Financials Sector Index(3)
(reflects no deduction for fees, expenses or taxes) (7.68)% (2.04)%
-------------------------------------------------------------------------------------------
WisdomTree International Financial Sector Index
(reflects no deduction for fees, expenses or taxes) 2.15% 8.27%
-------------------------------------------------------------------------------------------
(1) The Fund commenced operations on October 13, 2006.
(2) After-tax returns are calculated using the highest historical individual
federal marginal income tax rates and do not reflect the impact of state
and local taxes. Actual after-tax returns depend on your tax situation and
may differ from those shown and are not relevant if you hold your shares
through tax-deferred arrangements, such as 401(k) plans or individual
retirement accounts. In some cases the return after taxes may exceed the
return before taxes due to an assumed tax benefit from any losses on a
sale of Fund shares at the end of the measurement period.
(3) The S&P Global 1200 Sector Indexes highlight sector characteristics of the
S&P Global 1200 Index, a global index, that includes approximately 70% of
the world's capital markets.
22 WisdomTree Trust Prospectus
Fees and Expenses
The following table describes the fees and expenses you may pay if you buy and
hold shares of the Fund. The fees are expressed as a percentage of the Fund's
average net assets. You may also incur customary brokerage charges when buying
or selling Fund shares.
-------------------------------------------------------------------------------------------
Shareholder Fees None
(fees paid directly from your investment, but see the Creation Transaction Fees
and Redemption Transaction Fees section below)
-------------------------------------------------------------------------------------------
Annual Fund Operating Expenses (expenses deducted from Fund assets)
-------------------------------------------------------------------------------------------
Management Fees 0.58%
-------------------------------------------------------------------------------------------
Distribution and/or Service (12b-1) Fees None
-------------------------------------------------------------------------------------------
Other Expenses(a) 0.00%
-------------------------------------------------------------------------------------------
Total Annual Fund Operating Expenses 0.58%
-------------------------------------------------------------------------------------------
(a) WisdomTree Asset Management has agreed to pay all operating expenses of
the Fund, except interest expenses and taxes, any brokerage expenses,
future distribution fees or expenses, and extraordinary expenses through
July 31, 2009. WisdomTree Asset Management receives a fee of up to .0044%
in exchange for providing certain non-advisory services to the Fund.
The following example is intended to help retail investors compare the cost of
investing in the Fund with the cost of investing in other funds. It illustrates
the hypothetical expenses that such investors would incur over various periods
if they invest $10,000 in the Fund for the time periods indicated and then
redeemed all of the shares at the end of those periods. This example assumes
that the Fund provides a return of 5% a year and that operating expenses remain
the same. This example does not include the brokerage commission that retail
investors may pay to buy and sell shares of the Fund. Although your actual costs
may be higher or lower, based on these assumptions, your costs would be:
-------------------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
-------------------------------------------------------------------------------------------
$59 $186 $324 $726
-------------------------------------------------------------------------------------------
You would pay the following expenses if you did not redeem your shares:
-------------------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
-------------------------------------------------------------------------------------------
$59 $186 $324 $726
-------------------------------------------------------------------------------------------
WisdomTree Trust Prospectus 23
--------------------------------------------------------------------------------
WisdomTree International Sector Funds
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
WisdomTree International
Health Care Sector Fund
Fund Facts
--------------------------------------------------------------------------------
Cusip Number:
o 97717W687
Exchange Trading Symbol:
o DBR
--------------------------------------------------------------------------------
WisdomTree International Health Care Sector Fund
Investment Objective
The Fund seeks to track the price and yield performance, before fees and
expenses, of the WisdomTree International Health Care Sector Index. Since the
Fund's investment objective has been adopted as a non-fundamental investment
policy, the Fund's investment objective may be changed without a vote of
shareholders.
Primary Investment Strategies
The Fund employs a "passive management" - or indexing - investment approach
designed to track the performance of the WisdomTree International Health Care
Sector Index. The Fund attempts to invest all, or substantially all, of its
assets in the stocks that make up the Index. The Fund generally uses a
Representative Sampling strategy to achieve its investment objective.
Index Description
The WisdomTree International Health Care Sector Index measures the performance
of companies in developed markets outside of the U.S. that pay regular cash
dividends on shares of common stock that WisdomTree Investments classifies as
being part of the "International Health Care" sector. The Index is derived from
the WisdomTree Dividend Index of Europe, Far East and Australasia ("DEFA
Index"). Companies in the Index must meet specified requirements as of the Index
measurement date. To be included in the Index, companies must be incorporated in
one of 16 developed-market European countries included in the WisdomTree Europe
Dividend Index, Japan, Hong Kong, Singapore, Australia, or New Zealand, and must
be listed on a major securities exchange in one of those countries. Companies
must have paid at least $5 million in cash dividends on their common stock in
the annual cycle prior to the most recent Index measurement date and must also
satisfy specified liquidity and other requirements. Companies are weighted in
the Index based on regular cash dividends paid. The Index includes the following
types of companies: health care products, health care services, pharmaceuticals,
and biotechnology. As of June 30, 2008, approximately 60% of the Index consisted
of companies with market capitalizations over $10 billion and approximately 30%
of the Index consisted of companies with market capitalizations between $2
billion and $10 billion.
Primary Investment Risks
You can lose money on your investment in the Fund. For information about the
risks of investing in the Fund, see the section herein entitled "Principal Risk
Factors Common to All Funds." In addition, the Fund is subject to the following
potential risks. As with all potential risks, this could decrease the value of
your Fund investment.
24 WisdomTree Trust Prospectus
o Geographic Concentration Risk. To the extent the Fund invests a
significant portion of its assets in the securities of a single country or
region it is more likely to be impacted by events or conditions affecting
that country or region. For example, political and economic conditions and
changes in regulatory, tax, or economic policy in a country could
significantly affect the market in that country and in surrounding or
related countries and have a negative impact on a Fund's performance. The
company invests a relatively large percentage of its assets in companies
organized in Japan, Switzerland or the United Kingdom.
o Health Care Investing. The Fund invests substantially all of its assets in
one sector of the market and as such is particularly sensitive to risks to
the International Health Care sector. These risks include but are not
limited to: lapsing patent protection, technological developments that
make drugs obsolete, government regulation, price controls, and approvals
for drugs.
o Mid-Capitalization Investing. The Fund invests a relatively large
percentage of its assets in securities of mid-capitalization companies.
The securities of mid-capitalization companies may be more vulnerable to
adverse issuer, market, political, or economic developments than the
market as a whole or other types of securities. As a result, the Fund may
be more volatile than funds that invest in larger, more established
companies.
Performance Information
The bar chart that follows shows the annual total returns of the Fund for each
full calendar year since the Fund commenced operations. The table that follows
the bar chart shows the Fund's average annual total returns, both before and
after taxes. The bar chart and table provide an indication of the risks of
investing in the Fund by showing the Fund's performance for calendar year 2007
and showing how the Fund's average annual returns compared with its underlying
index and another measure of market performance. All returns assume reinvestment
of dividends and distributions. The Fund's past performance (before and after
taxes) is not necessarily an indication of how the Fund will perform in the
future.
[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
2007
-----
Total Return 3.49%
The Fund's year-to-date total return as of June 30, 2008 was (6.87)%.
Best and Worst Quarter Returns (for the period reflected in the bar chart above)
--------------------------------------------------------------------------------
Return Quarter/Year
--------------------------------------------------------------------------------
Highest Return 2.73% 3/2007
--------------------------------------------------------------------------------
Lowest Return (2.38)% 4/2007
--------------------------------------------------------------------------------
WisdomTree Trust Prospectus 25
Average Annual Total Returns as of December 31, 2007
-------------------------------------------------------------------------------------------
WisdomTree International Health Care Sector Fund 1 Year Since Inception(1)
-------------------------------------------------------------------------------------------
Return before taxes 3.49% 7.49%
-------------------------------------------------------------------------------------------
Return after taxes on distributions(2) 2.73% 6.83%
-------------------------------------------------------------------------------------------
Return after taxes on distributions and sale of Fund shares 2.26% 5.99%
-------------------------------------------------------------------------------------------
S&P Global 1200 Health Care Sector Index(3)
(reflects no deduction for fees, expenses or taxes) 4.42% 4.93%
-------------------------------------------------------------------------------------------
WisdomTree International Health Care Sector Index
(reflects no deduction for fees, expenses or taxes) 4.02% 7.97%
-------------------------------------------------------------------------------------------
(1) The Fund commenced operations on October 13, 2006.
(2) After-tax returns are calculated using the highest historical individual
federal marginal income tax rates and do not reflect the impact of state
and local taxes. Actual after-tax returns depend on your tax situation and
may differ from those shown and are not relevant if you hold your shares
through tax-deferred arrangements, such as 401(k) plans or individual
retirement accounts. In some cases the return after taxes may exceed the
return before taxes due to an assumed tax benefit from any losses on a
sale of Fund shares at the end of the measurement period.
(3) The S&P Global 1200 Sector Indexes highlight sector characteristics of the
S&P Global 1200 Index, a global index, that includes approximately 70% of
the world's capital markets.
Fees and Expenses
The following table describes the fees and expenses you may pay if you buy and
hold shares of the Fund. The fees are expressed as a percentage of the Fund's
average net assets. You may also incur customary brokerage charges when buying
or selling Fund shares.
-------------------------------------------------------------------------------------------
Shareholder Fees None
(fees paid directly from your investment, but see the Creation Transaction Fees
and Redemption Transaction Fees section below)
-------------------------------------------------------------------------------------------
Annual Fund Operating Expenses (expenses deducted from Fund assets)
-------------------------------------------------------------------------------------------
Management Fees 0.58%
-------------------------------------------------------------------------------------------
Distribution and/or Service (12b-1) Fees None
-------------------------------------------------------------------------------------------
Other Expenses(a) 0.00%
-------------------------------------------------------------------------------------------
Total Annual Fund Operating Expenses 0.58%
-------------------------------------------------------------------------------------------
(a) WisdomTree Asset Management has agreed to pay all operating expenses of
the Fund, except interest expenses and taxes, any brokerage expenses,
future distribution fees or expenses, and extraordinary expenses.
WisdomTree Asset Management receives a fee of up to .0044% in exchange for
providing certain non-advisory services to the Fund.
The following example is intended to help retail investors compare the cost of
investing in the Fund with the cost of investing in other funds. It illustrates
the hypothetical expenses that such investors would incur over various periods
if they invest $10,000 in the Fund for the time periods indicated and then
redeemed all of the shares at the end of those periods. This example assumes
that the Fund provides a return of 5% a year and that operating expenses remain
the same. This example does not include the brokerage commission that retail
investors may pay to buy and sell shares of the Fund. Although your actual costs
may be higher or lower, based on these assumptions, your costs would be:
-------------------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
-------------------------------------------------------------------------------------------
$59 $186 $324 $726
-------------------------------------------------------------------------------------------
You would pay the following expenses if you did not redeem your shares:
-------------------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
-------------------------------------------------------------------------------------------
$59 $186 $324 $726
-------------------------------------------------------------------------------------------
26 WisdomTree Trust Prospectus
--------------------------------------------------------------------------------
WisdomTree International Sector Funds
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
WisdomTree International
Industrial Sector Fund
Fund Facts
--------------------------------------------------------------------------------
Cusip Number:
o 97717W679
Exchange Trading Symbol:
o DDI
--------------------------------------------------------------------------------
WisdomTree International Industrial Sector Fund
Investment Objective
The Fund seeks to track the price and yield performance, before fees and
expenses, of the WisdomTree International Industrial Sector Index. Since the
Fund's investment objective has been adopted as a non-fundamental investment
policy, the Fund's investment objective may be changed without a vote of
shareholders.
Primary Investment Strategies
The Fund employs a "passive management" - or indexing - investment approach
designed to track the performance of the WisdomTree International Industrial
Sector Index. The Fund attempts to invest all, or substantially all, of its
assets in the stocks that make up the Index. The Fund generally uses a
Representative Sampling strategy to achieve its investment objective.
Index Description
The WisdomTree International Industrial Sector Index measures the performance of
companies in developed markets outside of the U.S. that pay regular cash
dividends on shares of common stock that WisdomTree Investments classifies as
being part of the "International Industrial" sector. The Index is derived from
the WisdomTree Dividend Index of Europe, Far East and Australasia ("DEFA
Index"). Companies in the Index must meet specified requirements as of the Index
measurement date. To be included in the Index, companies must be incorporated in
one of 16 developed-market European countries included in the WisdomTree DEFA
Index, Japan, Hong Kong, Singapore, Australia, or New Zealand, and must be
listed on a major securities exchange in one of those countries. Companies must
have paid at least $5 million in cash dividends on their common stock in the
annual cycle prior to the most recent Index measurement date and must also
satisfy specified liquidity and other requirements. Companies are weighted in
the Index based on regular cash dividends paid. The Index includes the following
types of companies: machinery, construction and engineering, infrastructure,
metals and mining and building products. As of June 30, 2008, approximately 48%
of the Index consisted of companies with market capitalizations over $10 billion
and approximately 35% of the Index consisted of companies with market
capitalizations between $2 billion and $10 billion.
Primary Investment Risks
You can lose money on your investment in the Fund. For information about the
risks of investing in the Fund, see the section herein entitled "Principal Risk
Factors Common to All Funds." In addition, the Fund is subject to the following
potential risks. As with all potential risks, this could decrease the value of
your Fund investment.
WisdomTree Trust Prospectus 27
o Geographic Concentration Risk. To the extent the Fund invests a
significant portion of its assets in the securities of a single country or
region it is more likely to be impacted by events or conditions affecting
that country or region. For example, political and economic conditions and
changes in regulatory, tax, or economic policy in a country could
significantly affect the market in that country and in surrounding or
related countries and have a negative impact on a Fund's performance. The
Fund generally invests a relatively large percentage of its assets in
companies organized in Japan.
o Industrial Investing. The Fund invests substantially all of its assets in
one sector of the market and as such is particularly sensitive to risks to
the International Industrial sector. These risks include but are not
limited to: worldwide economy growth, supply and demand for specific
products and services, rapid technological developments, and government
regulation.
o Mid-Capitalization Investing. The Fund invests a relatively large
percentage of its assets in securities of mid-capitalization companies.
The securities of mid-capitalization companies may be more vulnerable to
adverse issuer, market, political, or economic developments than the
market as a whole or other types of securities. As a result, the Fund may
be more volatile than funds that invest in larger, more established
companies.
Performance Information
The bar chart that follows shows the annual total returns of the Fund for each
full calendar year since the Fund commenced operations. The table that follows
the bar chart shows the Fund's average annual total returns, both before and
after taxes. The bar chart and table provide an indication of the risks of
investing in the Fund by showing the Fund's performance for calendar year 2007
and showing how the Fund's average annual returns compared with its underlying
index and another measure of market performance. All returns assume reinvestment
of dividends and distributions. The Fund's past performance (before and after
taxes) is not necessarily an indication of how the Fund will perform in the
future.
[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
2007
------
Total Return 16.55%
The Fund's year-to-date total return as of June 30, 2008 was (12.07)%.
Best and Worst Quarter Returns (for the period reflected in the bar chart above)
--------------------------------------------------------------------------------
Return Quarter/Year
--------------------------------------------------------------------------------
Highest Return 11.43% 2/2007
--------------------------------------------------------------------------------
Lowest Return (3.21)% 4/2007
--------------------------------------------------------------------------------
28 WisdomTree Trust Prospectus
Average Annual Total Returns as of December 31, 2007
-------------------------------------------------------------------------------------------
WisdomTree International Industrial Sector Fund 1 Year Since Inception(1)
-------------------------------------------------------------------------------------------
Return before taxes 16.55% 24.33%
-------------------------------------------------------------------------------------------
Return after taxes on distributions(2) 15.94% 23.77%
-------------------------------------------------------------------------------------------
Return after taxes on distributions and sale of Fund shares 10.75% 20.42%
-------------------------------------------------------------------------------------------
S&P Global 1200 Industrials Sector Index(3)
(reflects no deduction for fees, expenses or taxes) 16.24% 19.10%
-------------------------------------------------------------------------------------------
WisdomTree International Industrial Sector Index
(reflects no deduction for fees, expenses or taxes) 15.07% 23.15%
-------------------------------------------------------------------------------------------
(1) The Fund commenced operations on October 13, 2006.
(2) After-tax returns are calculated using the highest historical individual
federal marginal income tax rates and do not reflect the impact of state
and local taxes. Actual after-tax returns depend on your tax situation and
may differ from those shown and are not relevant if you hold your shares
through tax-deferred arrangements, such as 401(k) plans or individual
retirement accounts. In some cases the return after taxes may exceed the
return before taxes due to an assumed tax benefit from any losses on a
sale of Fund shares at the end of the measurement period.
(3) The S&P Global 1200 Sector Indexes highlight sector characteristics of the
S&P Global 1200 Index, a global index, that includes approximately 70% of
the world's capital markets.
Fees and Expenses
The following table describes the fees and expenses you may pay if you buy and
hold shares of the Fund. The fees are expressed as a percentage of the Fund's
average net assets. You may also incur customary brokerage charges when buying
or selling Fund shares.
-------------------------------------------------------------------------------------------
Shareholder Fees None
(fees paid directly from your investment, but see the Creation Transaction Fees
and Redemption Transaction Fees section below)
-------------------------------------------------------------------------------------------
Annual Fund Operating Expenses (expenses deducted from Fund assets)
-------------------------------------------------------------------------------------------
Management Fees 0.58%
-------------------------------------------------------------------------------------------
Distribution and/or Service (12b-1) Fees None
-------------------------------------------------------------------------------------------
Other Expenses(a) 0.00%
-------------------------------------------------------------------------------------------
Total Annual Fund Operating Expenses 0.58%
-------------------------------------------------------------------------------------------
(a) WisdomTree Asset Management has agreed to pay all operating expenses of
the Fund, except interest expenses and taxes, any brokerage expenses,
future distribution fees or expenses, and extraordinary expenses through
July 31, 2009. WisdomTree Asset Management receives a fee of up to .0044%
in exchange for providing certain non-advisory services to the Fund.
The following example is intended to help retail investors compare the cost of
investing in the Fund with the cost of investing in other funds. It illustrates
the hypothetical expenses that such investors would incur over various periods
if they invest $10,000 in the Fund for the time periods indicated and then
redeemed all of the shares at the end of those periods. This example assumes
that the Fund provides a return of 5% a year and that operating expenses remain
the same. This example does not include the brokerage commission that retail
investors may pay to buy and sell shares of the Fund. Although your actual costs
may be higher or lower, based on these assumptions, your costs would be:
-------------------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
-------------------------------------------------------------------------------------------
$59 $186 $324 $726
-------------------------------------------------------------------------------------------
You would pay the following expenses if you did not redeem your shares:
-------------------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
-------------------------------------------------------------------------------------------
$59 $186 $324 $726
-------------------------------------------------------------------------------------------
WisdomTree Trust Prospectus 29
--------------------------------------------------------------------------------
WisdomTree International Sector Funds
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
WisdomTree International
Technology Sector Fund
Fund Facts
--------------------------------------------------------------------------------
Cusip Number:
o 97717W661
Exchange Trading Symbol:
o DBT
--------------------------------------------------------------------------------
WisdomTree International Technology Sector Fund
Investment Objective
The Fund seeks to track the price and yield performance, before fees and
expenses, of the WisdomTree International Technology Sector Index. Since the
Fund's investment objective has been adopted as a non-fundamental investment
policy, the Fund's investment objective may be changed without a vote of
shareholders.
Primary Investment Strategies
The Fund employs a "passive management" - or indexing - investment approach
designed to track the performance of the WisdomTree International Technology
Sector Index. The Fund attempts to invest all, or substantially all, of its
assets in the stocks that make up the Index. The Fund generally uses a
Representative Sampling strategy to achieve its investment objective.
Index Description
The WisdomTree International Technology Sector Index measures the performance of
companies in developed markets outside of the U.S. that pay regular cash
dividends on shares of common stock that WisdomTree Investments classifies as
being part of the "International Technology" sector. The Index is derived from
the WisdomTree Dividend Index of Europe, Far East and Australasia ("DEFA
Index"). Companies in the Index must meet specified requirements as of the Index
measurement date. To be included in the Index, companies must be incorporated in
one of 16 developed-market European countries included in the WisdomTree DEFA
Index, Japan, Hong Kong, Singapore, Australia, or New Zealand, and must be
listed on a major securities exchange in one of those countries. Companies must
have paid at least $5 million in cash dividends on their common stock in the
annual cycle prior to the most recent Index measurement date and must also
satisfy specified liquidity and other requirements. Companies are weighted in
the Index based on regular cash dividends paid. The Index includes the following
types of companies: communications, equipment, software, electronic equipment
and instruments, information technology and internet software and services. As
of June 30, 2008, approximately 61% of the Index consisted of companies with
market capitalizations over $10 billion and approximately 21% of the Index
consisted of companies with market capitalizations between $2 billion and $10
billion.
Primary Investment Risks
You can lose money on your investment in the Fund. For information about the
risks of investing in the Fund, see the section herein entitled "Principal Risk
Factors Common to All Funds." In addition, the Fund is subject to the following
potential risks. As with all potential risks, this could decrease the value of
your Fund investment.
30 WisdomTree Trust Prospectus
o Geographic Concentration Risk. To the extent the Fund invests a
significant portion of its assets in the securities of a single country or
region it is more likely to be impacted by events or conditions affecting
that country or region. For example, political and economic conditions and
changes in regulatory, tax, or economic policy in a country could
significantly affect the market in that country and in surrounding or
related countries and have a negative impact on a Fund's performance. The
Fund generally invests a relatively large percentage of its assets in
companies organized in Japan or Finland.
o Technology Investing. The Fund invests substantially all of its assets in
one sector of the market and as such is particularly sensitive to risks to
the International Technology sector. These risks include but are not
limited to: worldwide economic growth, supply and demand for specific
products and services, rapid technological developments, and government
regulation.
o Mid-Capitalization Investing. The Fund invests a relatively large
percentage of its assets in securities of mid-capitalization companies.
The securities of mid-capitalization companies may be more vulnerable to
adverse issuer, market, political, or economic developments than the
market as a whole or other types of securities. As a result, the Fund may
be more volatile than funds that invest in larger, more established
companies.
Performance Information
The bar chart that follows shows the annual total returns of the Fund for each
full calendar year since the Fund commenced operations. The table that follows
the bar chart shows the Fund's average annual total returns, both before and
after taxes. The bar chart and table provide an indication of the risks of
investing in the Fund by showing the Fund's performance for calendar year 2007
and showing how the Fund's average annual returns compared with its underlying
index and another measure of market performance. All returns assume reinvestment
of dividends and distributions. The Fund's past performance (before and after
taxes) is not necessarily an indication of how the Fund will perform in the
future.
[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
2007
-------
Total Return (6.13)%
The Fund's year-to-date total return as of June 30, 2008 was (6.10)%.
Best and Worst Quarter Returns (for the period reflected in the bar chart above)
--------------------------------------------------------------------------------
Return Quarter/Year
--------------------------------------------------------------------------------
Highest Return 6.67% 2/2007
--------------------------------------------------------------------------------
Lowest Return (10.15)% 4/2007
--------------------------------------------------------------------------------
WisdomTree Trust Prospectus 31
Average Annual Total Returns as of December 31, 2007
-------------------------------------------------------------------------------------------
WisdomTree International Technology Sector Fund 1 Year Since Inception(1)
-------------------------------------------------------------------------------------------
Return before taxes (6.13)% (0.40)%
-------------------------------------------------------------------------------------------
Return after taxes on distributions(2) (6.42)% (0.68)%
-------------------------------------------------------------------------------------------
Return after taxes on distributions and sale of Fund shares (3.99)% (0.50)%
-------------------------------------------------------------------------------------------
S&P Global 1200 Information Technology Sector Index(3)
(reflects no deduction for fees, expenses or taxes) 14.06% 14.06%
-------------------------------------------------------------------------------------------
WisdomTree International Technology Sector Index
(reflects no deduction for fees, expenses or taxes) (5.38)% 0.33%
-------------------------------------------------------------------------------------------
(1) The Fund commenced operations on October 13, 2006.
(2) After-tax returns are calculated using the highest historical individual
federal marginal income tax rates and do not reflect the impact of state
and local taxes. Actual after-tax returns depend on your tax situation and
may differ from those shown and are not relevant if you hold your shares
through tax-deferred arrangements, such as 401(k) plans or individual
retirement accounts. In some cases the return after taxes may exceed the
return before taxes due to an assumed tax benefit from any losses on a
sale of Fund shares at the end of the measurement period.
(3) The S&P Global 1200 Sector Indexes highlight sector characteristics of the
S&P Global 1200 Index, a global index, that includes approximately 70% of
the world's capital markets.
Fees and Expenses
The following table describes the fees and expenses you may pay if you buy and
hold shares of the Fund. The fees are expressed as a percentage of the Fund's
average net assets. You may also incur customary brokerage charges when buying
or selling Fund shares.
-------------------------------------------------------------------------------------------
Shareholder Fees None
(fees paid directly from your investment, but see the Creation Transaction Fees
and Redemption Transaction Fees section below)
-------------------------------------------------------------------------------------------
Annual Fund Operating Expenses (expenses deducted from Fund assets)
-------------------------------------------------------------------------------------------
Management Fees 0.58%
-------------------------------------------------------------------------------------------
Distribution and/or Service (12b-1) Fees None
-------------------------------------------------------------------------------------------
Other Expenses(a) 0.00%
-------------------------------------------------------------------------------------------
Total Annual Fund Operating Expenses 0.58%
-------------------------------------------------------------------------------------------
(a) WisdomTree Asset Management has agreed to pay all operating expenses of
the Fund, except interest expenses and taxes, any brokerage expenses,
future distribution fees or expenses, and extraordinary expenses through
July 31, 2009. WisdomTree Asset Management receives a fee of up to .0044%
in exchange for providing certain non-advisory services to the Fund.
The following example is intended to help retail investors compare the cost of
investing in the Fund with the cost of investing in other funds. It illustrates
the hypothetical expenses that such investors would incur over various periods
if they invest $10,000 in the Fund for the time periods indicated and then
redeemed all of the shares at the end of those periods. This example assumes
that the Fund provides a return of 5% a year and that operating expenses remain
the same. This example does not include the brokerage commission that retail
investors may pay to buy and sell shares of the Fund. Although your actual costs
may be higher or lower, based on these assumptions, your costs would be:
-------------------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
-------------------------------------------------------------------------------------------
$59 $186 $324 $726
-------------------------------------------------------------------------------------------
You would pay the following expenses if you did not redeem your shares:
-------------------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
-------------------------------------------------------------------------------------------
$59 $186 $324 $726
-------------------------------------------------------------------------------------------
32 WisdomTree Trust Prospectus
--------------------------------------------------------------------------------
WisdomTree International Sector Funds
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
WisdomTree International
Utilities Sector Fund
Fund Facts
--------------------------------------------------------------------------------
Cusip Number:
o 97717W653
Exchange Trading Symbol:
o DBU
--------------------------------------------------------------------------------
WisdomTree International Utilities Sector Fund
Investment Objective
The Fund seeks to track the price and yield performance, before fees and
expenses, of the WisdomTree International Utilities Sector Index. Since the
Fund's investment objective has been adopted as a non-fundamental investment
policy, the Fund's investment objective may be changed without a vote of
shareholders.
Primary Investment Strategies
The Fund employs a "passive management" - or indexing - investment approach
designed to track the performance of the WisdomTree International Utilities
Sector Index. The Fund attempts to invest all, or substantially all, of its
assets in the stocks that make up the Index. The Fund generally uses a
Representative Sampling strategy to achieve its investment objective.
Index Description
The WisdomTree International Utilities Sector Index measures the performance of
companies in developed markets outside of the U.S. that pay regular cash
dividends on shares of common stock that WisdomTree Investments classifies as
being part of the "International Utilities" sector. The Index is derived from
the WisdomTree Dividend Index of Europe, Far East and Australasia ("DEFA
Index"). Companies in the Index must meet specified requirements as of the Index
measurement date. To be included in the Index, companies must be incorporated in
one of 16 developed-market European countries included in the WisdomTree DEFA
Index, Japan, Hong Kong, Singapore, Australia, or New Zealand, and must be
listed on a major securities exchange in one of those countries. Companies must
have paid at least $5 million in cash dividends on their common stock in the
annual cycle prior to the most recent Index measurement date and must also
satisfy specified liquidity and other requirements. Companies are weighted in
the Index based on regular cash dividends paid. The Index includes the following
types of companies: electric utilities, gas utilities, multi-utilities, power
procedures and energy traders. As of June 30, 2008, approximately 89% of the
Index consisted of companies with market capitalizations over $10 billion.
Primary Investment Risks
You can lose money on your investment in the Fund. For information about the
risks of investing in the Fund, see the section herein entitled "Principal Risk
Factors Common to All Funds." In addition, the Fund is subject to the following
potential risks. As with all potential risks, this could decrease the value of
your Fund investment.
o Geographic Concentration Risk. To the extent the Fund invests a
significant portion of its assets in the securities of a single country or
region it is more likely to be impacted by events or conditions affecting
that country or region. For example, political and economic conditions and
changes in regulatory, tax, or economic policy
WisdomTree Trust Prospectus 33
in a country could significantly affect the market in that country and in
surrounding or related countries and have a negative impact on a Fund's
performance. The Fund generally invests a relatively large percentage of
its assets in companies organized in France, Italy or Germany.
o Utilities Investing. The Fund invests substantially all of its assets in
one sector of the market and as such is particularly sensitive to risks to
the International Utilities sector. These risks include but are not
limited to: changing commodity prices, government regulation stipulating
rates charged by utilities, interest rate sensitivity, and the cost of
providing the specific utility service.
Performance Information
The bar chart that follows shows the annual total returns of the Fund for each
full calendar year since the Fund commenced operations. The table that follows
the bar chart shows the Fund's average annual total returns, both before and
after taxes. The bar chart and table provide an indication of the risks of
investing in the Fund by showing the Fund's performance for calendar year 2007
and showing how the Fund's average annual returns compared with its underlying
index and another measure of market performance. All returns assume reinvestment
of dividends and distributions. The Fund's past performance (before and after
taxes) is not necessarily an indication of how the Fund will perform in the
future.
[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]
2007
-----
Total Return 24.21%
The Fund's year-to-date total return as of June 30, 2008 was (6.20)%.
Best and Worst Quarter Returns (for the period reflected in the bar chart above)
-------------------------------------------------------------------------------------------
Return Quarter/Year
-------------------------------------------------------------------------------------------
Highest Return 7.72% 4/2007
-------------------------------------------------------------------------------------------
Lowest Return 4.13% 3/2007
-------------------------------------------------------------------------------------------
Average Annual Total Returns as of December 31, 2007
-------------------------------------------------------------------------------------------
WisdomTree International Utilities Sector Fund 1 Year Since Inception(1)
-------------------------------------------------------------------------------------------
Return before taxes 24.21% 33.11%
-------------------------------------------------------------------------------------------
Return after taxes on distributions(2) 23.87% 32.76%
-------------------------------------------------------------------------------------------
Return after taxes on distributions and sale of Fund shares 15.74% 28.06%
-------------------------------------------------------------------------------------------
S&P Global 1200 Utilities Sector Index(3)
(reflects no deduction for fees, expenses or taxes) 23.43% 29.99%
-------------------------------------------------------------------------------------------
WisdomTree International Utilites Sector Index
(reflects no deduction for fees, expenses or taxes) 26.24% 35.24%
-------------------------------------------------------------------------------------------
(1) The Fund commenced operations on October 13, 2006.
(2) After-tax returns are calculated using the highest historical individual
federal marginal income tax rates and do not reflect the impact of state
and local taxes. Actual after-tax returns depend on your tax situation and
may differ from those shown and are not relevant if you hold your shares
through tax-deferred arrangements, such as 401(k) plans or individual
retirement accounts. In some cases the return after taxes may exceed the
return before taxes due to an assumed tax benefit from any losses on a
sale of Fund shares at the end of the measurement period.
(3) The S&P Global 1200 Sector Indexes highlight sector characteristics of the
S&P Global 1200 Index, a global index, that includes approximately 70% of
the world's capital markets.
34 WisdomTree Trust Prospectus
Fees and Expenses
The following table describes the fees and expenses you may pay if you buy and
hold shares of the Fund. The fees are expressed as a percentage of the Fund's
average net assets. You may also incur customary brokerage charges when buying
or selling Fund shares.
--------------------------------------------------------------------------------
Shareholder Fees None
(fees paid directly from your investment, but see the Creation
Transaction Fees and Redemption Transaction Fees section below)
--------------------------------------------------------------------------------
Annual Fund Operating Expenses (expenses deducted from Fund assets)
--------------------------------------------------------------------------------
Management Fees 0.58%
--------------------------------------------------------------------------------
Distribution and/or Service (12b-1) Fees None
--------------------------------------------------------------------------------
Other Expenses(a) 0.00%
--------------------------------------------------------------------------------
Total Annual Fund Operating Expenses 0.58%
--------------------------------------------------------------------------------
(a) WisdomTree Asset Management has agreed to pay all operating expenses of
the Fund, except interest expenses and taxes, any brokerage expenses,
future distribution fees or expenses, and extraordinary expenses through
July 31, 2009. WisdomTree Asset Management receives a fee of up to .0044%
in exchange for providing certain non-advisory services to the Fund.
The following example is intended to help retail investors compare the cost of
investing in the Fund with the cost of investing in other funds. It illustrates
the hypothetical expenses that such investors would incur over various periods
if they invest $10,000 in the Fund for the time periods indicated and then
redeemed all of the shares at the end of those periods. This example assumes
that the Fund provides a return of 5% a year and that operating expenses remain
the same. This example does not include the brokerage commission that retail
investors may pay to buy and sell shares of the Fund. Although your actual costs
may be higher or lower, based on these assumptions, your costs would be:
--------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
--------------------------------------------------------------------------------
$59 $186 $324 $726
--------------------------------------------------------------------------------
You would pay the following expenses if you did not redeem your shares:
--------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
--------------------------------------------------------------------------------
$59 $186 $324 $726
--------------------------------------------------------------------------------
WisdomTree Trust Prospectus 35
--------------------------------------------------------------------------------
WisdomTree International Sector Funds
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
WisdomTree International
Real Estate Fund
Fund Facts
--------------------------------------------------------------------------------
Cusip Number:
o 97717W331
Exchange Trading Symbol:
o DRW
--------------------------------------------------------------------------------
WisdomTree International Real Estate Fund
Investment Objective
The Fund seeks to track the price and yield performance, before fees and
expenses, of the WisdomTree International Real Estate Index. Since the Fund's
investment objective has been adopted as a non-fundamental investment policy,
the Fund's investment objective may be changed without a vote of shareholders.
Primary Investment Strategies
The Fund employs a "passive management" - or indexing - investment approach
designed to track the performance of the WisdomTree International Real Estate
Index. The Fund attempts to invest all, or substantially all, of its assets in
the stocks that make up the Index. The Fund generally uses a Representative
Sampling strategy to achieve its investment objective.
Index Description
The WisdomTree International Real Estate Index measures the performance of
companies in developed markets outside of the U.S. and Canada that pay regular
cash dividends on shares of common stock that WisdomTree Investments classifies
as being part of the "International Real Estate" sector. Companies in the Index
must meet specified requirements as of the Index measurement date. To be
included in the Index, companies must be incorporated in one of 16
developed-market European countries, Japan, Hong Kong, Singapore, Australia, or
New Zealand, and must be listed on a major securities exchange in one of those
countries. Companies must have paid at least $5 million in cash dividends on
their common stock in the annual cycle prior to the most recent Index
measurement date and must also satisfy specified liquidity and other
requirements. Companies are weighted in the Index based on regular cash
dividends paid. The Index includes the following types of companies: real estate
operating companies; real estate development companies; and diversified real
estate investment trusts ("REITs"). The Index also includes companies that may
be classified as Passive Foreign Investment Companies (PFICs). As of June 30,
2008, approximately 32% of the Index consisted of companies with market
capitalization over $10 billion, 38% of the Index consisted of companies with
market capitalization between $2 billion and $10 billion and 30% of the Index
consisted of companies with market capitalization less than $2 billion.
Primary Investment Risks
You can lose money on your investment in the Fund. For information about the
risks of investing in the Fund, see the section herein entitled "Principal Risk
Factors Common to All Funds." In addition, the Fund is subject to the following
potential risks. As with all potential risks, this could decrease the value of
your Fund investment.
o Investments in Real Estate, REITs and PFICs. The Fund invests
substantially all of its assets in one sector of the market and as such is
particularly sensitive to risks to the international real estate market.
The Fund generally invests a relatively large
36 WisdomTree Trust Prospectus
percentage of its assets in REITs. Investments in REITs subject the Fund
to risks associated with the direct ownership of real estate. Market
conditions or events affecting the overall market for real estate and
REITs, such as declining property values or rising interest rates, could
have a negative impact on the Fund's performance. Investments in PFICs may
decrease the tax efficiency of the Fund.
o Small- and Mid-Capitalization Investing. The Fund invests a relatively
large percentage of its assets in securities of small- and
mid-capitalization companies. As a result, the Fund may be more volatile
than funds that invest in larger, more established companies. The
securities of small- and mid-capitalization companies generally trade in
lower volumes and are subject to greater and more unpredictable price
changes than larger capitalization stocks or the stock market as a whole.
Small- and mid-capitalization companies may be particularly sensitive to
changes in interest rates, borrowing costs and earnings.
o Geographic Concentration Risk. To the extent the Fund invests a
significant portion of its assets in the securities of a single country or
region it is more likely to be impacted by events or conditions affecting
that country or region. For example, political and economic conditions and
changes in regulatory, tax, or economic policy in a country could
significantly affect the market in that country and in surrounding or
related countries and have a negative impact on a Fund's performance. The
Fund generally invests a relatively large percentage of its assets in
companies organized in Australia and Hong Kong.
Performance Information
Although the Fund commenced operations on June 5, 2007, no performance
information is presented for the Fund because it has been in operation for less
than one full calendar year. After the first full calendar year a risk/return
chart and table will be provided. Any past performance of the Fund that will be
shown will not be an indication of future results.
Fees and Expenses
The following table describes the fees and expenses you may pay if you buy and
hold shares of the Fund. The fees are expressed as a percentage of the Fund's
average net assets. You may also incur customary brokerage charges when buying
or selling Fund shares.
--------------------------------------------------------------------------------
Shareholder Fees None
(fees paid directly from your investment, but see the Creation
Transaction Fees and Redemption Transaction Fees section below)
--------------------------------------------------------------------------------
Annual Fund Operating Expenses (expenses deducted from Fund assets)
--------------------------------------------------------------------------------
Management Fees 0.58%
--------------------------------------------------------------------------------
Distribution and/or Service (12b-1) Fees None
--------------------------------------------------------------------------------
Other Expenses(a) 0.00%
--------------------------------------------------------------------------------
Total Annual Fund Operating Expenses 0.58%
--------------------------------------------------------------------------------
(a) WisdomTree Asset Management has agreed to pay all operating expenses of
the Fund, except interest expenses and taxes, any brokerage expenses,
future distribution fees or expenses, and extraordinary expenses through
July 31, 2009. WisdomTree Asset Management receives a fee of up to .0044%
in exchange for providing certain non-advisory services to the Fund.
The following example is intended to help retail investors compare the cost of
investing in the Fund with the cost of investing in other funds. It illustrates
the hypothetical expenses that such investors would incur over various periods
if they invest $10,000 in the Fund for the time periods indicated and then
redeemed all of the shares at the end of those periods. This example assumes
that the Fund provides a return of 5% a year and that operating expenses remain
the same. This example does not include the brokerage commission that retail
investors will pay to buy and sell shares of the Fund. It also does not include
the transaction fees on purchases and redemptions of Creation Units, because
these fees will not be imposed on retail investors. Although your actual costs
may be higher or lower, based on these assumptions, your costs would be:
WisdomTree Trust Prospectus 37
--------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
--------------------------------------------------------------------------------
$59 $186 $324 $726
--------------------------------------------------------------------------------
You would pay the following expenses if you did not redeem your shares:
--------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
--------------------------------------------------------------------------------
$59 $186 $324 $726
--------------------------------------------------------------------------------
38 WisdomTree Trust Prospectus
Management
Investment Adviser
As investment adviser, WisdomTree Asset Management has overall responsibility
for the general management and administration of the Trust. WisdomTree Asset
Management provides an investment program for each Fund. WisdomTree Asset
Management also arranges for sub-advisory, transfer agency, custody, fund
administration, and all other non-distribution related services necessary for
the Funds to operate.
Under the Investment Advisory Agreement, WisdomTree Asset Management agrees to
pay all expenses of the Trust, except compensation and expenses of the
Independent Trustees, counsel to the Independent Trustees and the Trust's Chief
Compliance Officer, interest expenses and taxes, brokerage expenses, and other
expenses connected with the execution of portfolio transactions, any
distribution fees or expenses, legal fees or expenses and extraordinary
expenses. Pursuant to a separate contractual arrangement, WisdomTree Asset
Management arranges for the provision of chief compliance officer ("CCO")
services to the Trust, and is liable and responsible for, and administers,
payments to the CCO, the Independent Trustees and counsel to the Independent
Trustees.
The basis for the Board of Trustees' approval of the Investment Advisory
Agreement is available in the Trust's Annual Report to Shareholders for the
period ended March 31, 2008.
WisdomTree Asset Management expects to receive fees from each 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 International Basic Materials Sector Fund 0.58%
--------------------------------------------------------------------------------
WisdomTree International Communications Sector Fund 0.58%
--------------------------------------------------------------------------------
WisdomTree International Consumer Discretionary Sector Fund 0.58%
--------------------------------------------------------------------------------
WisdomTree International Consumer Staples Sector Fund 0.58%
--------------------------------------------------------------------------------
WisdomTree International Energy Sector Fund 0.58%
--------------------------------------------------------------------------------
WisdomTree International Financial Sector Fund 0.58%
--------------------------------------------------------------------------------
WisdomTree International Health Care Sector Fund 0.58%
--------------------------------------------------------------------------------
WisdomTree International Industrial Sector Fund 0.58%
--------------------------------------------------------------------------------
WisdomTree International Technology Sector Fund 0.58%
--------------------------------------------------------------------------------
WisdomTree International Utilities Sector Fund 0.58%
--------------------------------------------------------------------------------
WisdomTree International Real Estate Fund 0.58%
--------------------------------------------------------------------------------
WisdomTree Asset Management is a registered investment adviser with offices
located at 380 Madison Avenue, 21st floor, New York, NY 10017 and is a leader in
ETF management.
Sub-Adviser
Mellon Capital Management Corporation ("Mellon Capital") serves as sub-adviser
to the Funds. Mellon Capital, a registered investment adviser, is a leading
innovator in the investment industry and manages global quantitative-based
investment strategies for institutional and private investors. Its principal
office is located at 50 Fremont Street, San Francisco, CA 94105. As of June 30,
2008, Mellon Capital had assets under management totaling approximately $204
billion. Mellon Capital is a wholly-owned indirect subsidiary of The Bank of New
York Mellon Corporation, a publicly traded financial holding company. Mellon
Capital chooses each Fund's portfolio investments and places orders to buy and
sell the Funds' portfolio investments. BNY Investment Advisors ("BNYIA")
previously served as sub-adviser to the Funds. In connection with the
WisdomTree Trust Prospectus 39
recent merger between The Bank of New York Company, Inc. and Mellon Financial
Corporation BNYIA was integrated with its affiliate, Mellon Capital. As part of
the integration, BNYIA transferred, and Mellon Capital assumed, full
responsibility of the Sub-Advisory Agreement between BNYIA and WisdomTree Asset
Management effective July 2008. WisdomTree Asset Management pays Mellon Capital
for providing sub-advisory services to the Funds in accordance with the table
set forth below.
o 7.5 basis points (0.075%) of the first $1 billion in the total daily net
assets of all International Funds;
o 5 basis points (0.05%) of the next $1 billion in total daily net assets of
all International Funds;
o 3 basis points (0.03%) of the next $3 billion in total daily net assets of
all International Funds; and
o 2 basis points (0.02%) of the total daily net assets of all International
Funds in excess of $5 billion.
Portfolio Managers
Each Fund is managed by Mellon Capital's Equity Index Strategies Portfolio
management team. The individual members of the team responsible for the
day-to-day management of the Funds' portfolios are described below.
Denise Krisko is a Managing Director, Co-Head of the Equity Index Management and
Head of East Coast Equity Index Strategies for Mellon Capital. She was also a
Managing Director of The Bank of New York and Head of Equity Index Strategies
for BNY Investment Advisors since August of 2005. Prior to joining The Bank of
New York, from 2000 to 2004, Ms. Krisko held various senior investment positions
with Deutsche Asset Management and Northern Trust, including quantitative
strategies director, senior portfolio manager and trader. Ms. Krisko has over 15
years of investment experience.
Steven Wetter is a Vice President, Senior Portfolio Manager of Equity Index
Strategies. He obtained his M.B.A. from New York University, Stern School of
Business. Prior to joining The Bank of New York, he worked as portfolio manager
and trader at Bankers Trust and continued in that role as the division was sold
to Deutsche Bank in 1999 and then to Northern Trust in 2003. Mr. Wetter has 20
years of investment experience.
The Trust's Statement of Additional Information ("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 Funds for which they are Portfolio Managers.
Portfolio Holdings Information
Information about each Fund's daily portfolio holdings is available at
www.wisdomtree.com. In addition, each Fund discloses its complete portfolio
holdings as of the end of its fiscal year (March 31) and its second fiscal
quarter (September 30) in its reports to shareholders. Each Fund files its
complete portfolio holdings as of the end of its first and third fiscal quarters
( June 30 and December 31, respectively) with the SEC on Form N-Q no later than
60 days after the relevant fiscal period. You can find the SEC filings on the
SEC's website, www.sec.gov. A summarized description of the Funds' policies and
procedures with respect to the disclosure of each Fund's portfolio holdings is
available in the Trust's SAI.
Buying and Selling Shares
Most investors will buy and sell shares of the Funds through brokers. Shares of
the Funds trade on national securities exchanges 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.
40 WisdomTree Trust Prospectus
Shares of the Funds trade under the trading symbols listed for each respective
Fund in the section describing such Fund.
Shares of the Funds may be acquired or redeemed directly from a Fund only in
Creation Units or multiples thereof, as discussed in the Creation and Redemption
section. Once created, shares of the Funds trade in the secondary market in
amounts less than a Creation Unit.
Share Trading Prices
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.
The approximate value of shares of each Fund is disseminated every fifteen
seconds throughout the trading day by the national securities exchange on which
such Fund is listed or by other information providers. This approximate value
should not be viewed as a "real-time" update of the NAV, because the approximate
value may not be calculated in the same manner as the NAV, which is computed
once per day. The approximate value generally is determined by using current
market quotations and/or price quotations obtained from broker-dealers that may
trade in the portfolio securities held by the Funds. The Funds are not involved
in, or responsible for, the calculation or dissemination of the approximate
value and make no warranty as to its accuracy.
Determination of Net Asset Value
The NAV of each Fund's shares is calculated each day the national securities
exchanges are open for trading as of the close of regular trading on the New
York Stock Exchange, generally 4:00 p.m. New York time (the "NAV Calculation
Time"). NAV per share is calculated by dividing a Fund's net assets by the
number of Fund shares outstanding.
Stocks held by a Fund are valued at their market value when reliable market
quotations are readily available. Certain short-term debt instruments, which may
be used to manage a Fund's cash, are valued on the basis of amortized cost. The
values of any foreign securities held by a Fund are converted into U.S. dollars
using an exchange rate deemed appropriate by the Fund.
When reliable market quotations are not readily available, securities are priced
at their fair value, which is the price a security's owner might reasonably
expect to receive upon its sale. A Fund may also use fair-value pricing if the
value of a security it holds has been materially affected by events occurring
before the Fund's pricing time but after the close of the primary markets or
exchanges on which the security is traded. For example, this may occur with
foreign securities, which may trade on foreign exchanges that close many hours
before the Fund's pricing time. Intervening events might be company-specific
(e.g., earnings report, merger announcement), country-specific (e.g., natural
disaster, economic or political news, act of terrorism, interest rate change),
or global. Intervening events may include price movements in U.S. markets that
are deemed to affect the value of foreign securities. Fair-value pricing also
may be used if, for example, trading in a security is halted and does not resume
before the Fund's pricing time or if a security does not trade in the course of
a day. Since the International Sector Funds invest in securities listed on
foreign exchanges that trade on weekends or other days when the Funds do not
price their shares, the NAV of these Funds may change on days when shareholders
will not be able to purchase or redeem the Funds' shares. Fair-value prices are
determined by the Funds according to procedures adopted by the Board of
Trustees. When fair-value pricing is employed, the prices of securities used by
a Fund to calculate its NAV may differ from quoted or published prices for the
same securities.
Transactions in Fund shares will be priced at NAV only if you purchase or redeem
shares directly from a Fund in Creation Units. Fund shares are purchased or sold
on a national securities exchange at market prices, which may be higher or lower
than NAV.
WisdomTree Trust Prospectus 41
Dividends and Distributions
Each Fund pays out dividends, if any, to investors at least annually. Each Fund
distributes its net realized capital gains, if any, to investors annually. The
Funds 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.
Book Entry
Shares of the Funds 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 each Fund.
Investors owning shares of the Funds are beneficial owners as shown on the
records of DTC or its participants. DTC serves as the securities depository for
all shares of the Funds. 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.
Delivery of Shareholder Documents - Householding
Householding is an option available to certain investors of the Funds.
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 Funds 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 Funds have adopted policies and procedures with respect to frequent
purchases and redemptions of Creation Units of Fund shares. Since the Funds are
ETFs, only a few institutional investors (known as "Authorized Participants")
are authorized to purchase and redeem shares directly with the Funds. Because
purchase and redemption transactions with Authorized Participants are an
essential part of the ETF process and help keep ETF trading prices in line with
NAV, each Fund accommodates frequent purchases and redemptions by Authorized
Participants. Frequent purchases and redemptions for cash may increase index
tracking error and portfolio transaction costs and may lead to realization of
capital gains. Frequent in-kind creations and redemptions do not give rise to
these concerns. Each Fund reserves the right to reject any purchase order at any
time. Each Fund reserves the right to impose restrictions on disruptive,
excessive, or short-term trading and may reject purchase or redemption orders in
such instances.
Investments by Registered Investment Companies
Section 12(d)(1) of the Investment Company Act of 1940 restricts investments by
registered investment companies in the securities of other investment companies,
including shares of each Fund. Registered investment companies are permitted to
invest in the Funds beyond the limits set forth in section 12(d)(1), subject to
certain terms and conditions set forth in an SEC exemptive order issued to the
WisdomTree Trust, including that such investment companies enter into an
agreement with the Funds.
42 WisdomTree Trust Prospectus
Taxes
The following discussion is a summary of some important U.S. federal income tax
considerations generally applicable to investments in the Funds. Your investment
in a 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.
Each Fund intends to qualify each year as a regulated investment company. A
regulated investment company is not subject to tax at the fund level on income
and gains from investments that are timely distributed to shareholders. However,
a Fund's failure to qualify as a regulated investment company would result in
fund-level taxation, and consequently, a reduction in income available for
distribution to shareholders.
Unless your investment in shares is made through a tax-exempt entity or
tax-deferred retirement account, such as an individual retirement account, you
need to be aware of the possible tax consequences when:
o A Fund makes distributions,
o You sell shares, and
o You purchase or redeem Creation Units (for institutional investors only)
Taxes on Distributions
For federal income tax purposes, distributions of investment income are
generally taxable as ordinary income. Taxes on distributions of capital gains
(if any) are determined by how long a Fund owned the investments that generated
them, rather than how long you have owned your Fund shares. Distributions of net
capital gains (the excess of net long-term capital gains from the sale of
investments that a Fund owned for more than one year over net short-term capital
losses) that are properly designated by the Fund as capital gain dividends
("Capital Gain Dividends") will be taxable as long-term capital gains. Long-term
capital gain rates have been temporarily reduced - in general, to 15%, with
lower rates applying to taxpayers in the 10% and 15% rate brackets - for taxable
years beginning before January 1, 2011. Distributions of gains from the sale of
investments that a Fund owned for one year or less will be taxable as ordinary
income.
For taxable years beginning before January 1, 2011, distributions of investment
income designated by a Fund as derived from "qualified dividend income" are
taxed to individuals at rates applicable to long-term capital gain, provided
holding period and other requirements are met at both the shareholder and the
Fund level.
In general, your distributions are subject to federal income tax for the year in
which they are paid. Certain distributions paid in January, however, may be
treated as paid on December 31 of the prior year. Distributions are taxable even
if they are paid from income or gains earned by a Fund before your investment
(and thus were included in the price you paid for your shares).
Dividends, interest and gains received by a Fund with respect to foreign
securities may be subject to withholding and other taxes imposed by foreign
countries, which may reduce amounts available for distribution to you and
returns to you from a Fund. Tax conventions between certain countries and the
United States may, in some cases, reduce or eliminate such taxes. Because more
than 50% of the total assets of each Fund will consist of foreign stocks or
securities, each Fund intends to "pass through" to you certain foreign income
taxes (including withholding taxes) paid by the Fund. This means that you will
be considered to have received as an additional dividend your share of such
foreign taxes, but you may be entitled to either a corresponding tax deduction
or a credit in calculating your federal income tax.
If you are neither a resident nor a citizen of the United States or if you are a
foreign entity, dividends (other than Capital Gain Dividends) paid to you by the
Funds will generally be subject to a 30% U.S. withholding tax, unless a lower
treaty rate applies.
WisdomTree Trust Prospectus 43
The Funds (or financial intermediaries, such as brokers, through which a
shareholder owns Fund shares) generally are required to withhold and 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.
Taxes When Fund Shares are Sold
Any capital gain or loss realized upon a sale of Fund shares is generally
treated as a long-term gain or loss if the shares have been held 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
long-term capital loss to the extent that capital gain dividends were paid with
respect to such shares. The ability to deduct capital losses may be limited.
Taxes on Creation and Redemption of Creation Units
An Authorized Participant who exchanges securities for Creation Units generally
will recognize a gain or a loss equal to the difference between the market value
of the Creation Units at the time of the exchange and the sum of the exchanger's
aggregate basis in the securities surrendered and the cash component paid. 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 market value of the securities and the amount of cash
received for such Creation Units. The Internal Revenue Service, however, may
assert that a loss realized upon an exchange of securities for Creation Units
cannot be deducted currently under the rules governing "wash sales," or on the
basis that there has been no significant change in economic position. Persons
exchanging securities for Creation Units should consult a tax advisor with
respect to whether the wash sale rules apply and when a loss might be
deductible.
Any capital gain or loss realized upon a redemption (or creation) of Creation
Units is generally treated as long-term capital gain or loss if the Fund shares
(or securities surrendered) have been held for more than one year and as
short-term capital gain or loss if the shares (or securities surrendered) have
been held for one year or less.
If you purchase or redeem Creation Units, you will be sent a confirmation
statement showing how many shares you purchased or sold and at what price.
Persons purchasing or redeeming Creation Units should consult their own tax
advisors with respect to the tax treatment of any creation or redemption
transaction.
Creation and Redemption
The shares that trade in the secondary market are "created" at NAV. Each Fund
issues and redeems shares only in large blocks of shares, typically 200,000
shares or more ("Creation Units"). Only institutional investors who have entered
into an authorized participant agreement purchase or redeem Creation Units.
Creation Units generally are issued and redeemed in exchange for a specified
basket of securities approximating the holdings of a Fund and a designated
amount of cash. Each business day prior to the opening of trading each Fund
publishes the specific securities and designated amount of cash included in that
day's basket for the Fund through the National Securities Clearing Corporation
("NSCC") or other method of public dissemination. Each Fund reserves the right
to accept or pay out a basket of securities or cash that differs from the
published basket. The prices at which creations and redemptions occur are based
on the next calculation of NAV after an order is received in proper form.
Creations and redemptions must be made by an Authorized Participant or through a
firm that is either a member of the Continuous Net Settlement System of the NSCC
or a DTC participant, and in each case, must have executed an agreement with the
Distributor with respect to creations and redemptions of Creation Unit
aggregations. Information about the procedures regarding creation and redemption
of Creation Units is included in the Trust's SAI.
44 WisdomTree Trust Prospectus
Authorized Participants and the Continuous Offering of Shares
Because new shares may be created and issued on an ongoing basis, at any point
during the life of a Fund, a "distribution," as such term is used in the
Securities Act of 1933 ("Securities Act"), may be occurring. 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 that could render them statutory underwriters and subject to the
prospectus delivery and liability provisions of the Securities Act. Nonetheless,
any determination of whether one is an underwriter must take into account all
the relevant facts and circumstances of each particular case.
Broker-dealers should also note that dealers who are not "underwriters," but are
participating in a distribution (as contrasted to ordinary secondary
transactions), and thus dealing with shares that are part of an "unsold
allotment" within the meaning of Section 4(3)(C) of the Securities Act, would be
unable to take advantage of the prospectus delivery exemption provided by
Section 4(3) of the Securities Act. For delivery of prospectuses to exchange
members, the prospectus delivery mechanism of Rule 153 under the Securities Act
is only available with respect to transactions on a national securities
exchange.
Creation and Redemption Transaction Fees for Creation Units
Each Fund may impose a creation transaction fee and a redemption transaction fee
to offset transfer and other transaction costs associated with the issuance and
redemption of Creation Units of shares. The creation and redemption transaction
fees applicable to each Fund are listed below. The standard creation transaction
fee is charged to each purchaser on the day such purchaser creates a Creation
Unit. The standard fee is a single charge and will be the amount indicated below
regardless of the number of Creation Units purchased by an investor on the same
day. Similarly, the standard redemption transaction fee will be the amount
indicated regardless of the number of Creation Units redeemed that day.
Purchasers and redeemers of Creation Units for cash (when cash creations and
redemptions are permitted) will also be subject to an additional variable charge
of up to a maximum of four times the amount shown below under "Maximum
Creation/Redemption Transaction Fee" to offset the transaction cost to the Fund
of buying portfolio securities. In addition, purchasers and redeemers of shares
in Creation Units are responsible for payment of the costs of transferring
securities to or out of a Fund. From time to time, WisdomTree Asset Management
may cover the cost of any transaction fees.
The following table also shows, as of July 1, 2008, the approximate value of one
Creation Unit per Fund, including the standard creation and redemption
transaction fee. These fees are payable only by investors who purchase shares
directly from a Fund. Retail investors who purchase shares through their
brokerage account will not pay these fees.
WisdomTree Trust Prospectus 45
--------------------------------------------------------------------------------------------------------------------
Approximate Standard Creation/ Maximum Creation/
Value of One Redemption Redemption
Name of Fund Creation Unit Transaction Fee Transaction Fee
--------------------------------------------------------------------------------------------------------------------
WisdomTree International Basic Materials Sector Fund $7,000,000 $4,000 $ 5,000
--------------------------------------------------------------------------------------------------------------------
WisdomTree International Communications Sector Fund $6,000,000 $3,250 $ 5,100
--------------------------------------------------------------------------------------------------------------------
WisdomTree International Consumer Discretionary
Sector Fund $6,000,000 $9,500 $11,500
--------------------------------------------------------------------------------------------------------------------
WisdomTree International Consumer Staples
Sector Fund $6,000,000 $8,000 $10,500
--------------------------------------------------------------------------------------------------------------------
WisdomTree International Energy Sector Fund $7,000,000 $1,250 $ 2,000
--------------------------------------------------------------------------------------------------------------------
WisdomTree International Financial Sector Fund $6,000,000 $9,000 $14,000
--------------------------------------------------------------------------------------------------------------------
WisdomTree International Health Care Sector Fund $5,000,000 $2,250 $ 3,500
--------------------------------------------------------------------------------------------------------------------
WisdomTree International Industrial Sector Fund $7,000,000 $9,500 $12,500
--------------------------------------------------------------------------------------------------------------------
WisdomTree International Technology Sector Fund $6,000,000 $2,000 $ 2,500
--------------------------------------------------------------------------------------------------------------------
WisdomTree International Utilities Sector Fund $6,000,000 $1,500 $ 2,500
--------------------------------------------------------------------------------------------------------------------
WisdomTree International Real Estate Fund $5,000,000 $6,500 $10,150
--------------------------------------------------------------------------------------------------------------------
Distribution
ALPS Distributors, Inc. (the "Distributor") serves as the distributor of
Creation Units for each Fund on an agency basis. The Distributor does not
maintain a secondary market in shares of the Funds. The Distributor's principal
address is 1290 Broadway, Suite 1100, Denver, Colorado 80203.
The Distributor has no role in determining the policies of any Fund or the
securities that are purchased or sold by any Fund.
Additional Notices
Shares of the Trust are not sponsored, endorsed, or promoted by any listing
exchange ("Exchange"). The Exchange makes no representation or warranty, express
or implied, to the owners of the shares of any Fund or any member of the public
regarding the ability of a Fund to track the total return performance of any
Index or the ability of any Index identified herein to track stock market
performance. The Exchange is not responsible for, nor has it participated in,
the determination of the compilation or the calculation of any Index, nor in the
determination of the timing of, prices of, or quantities of the shares of any
Fund to be issued, nor in the determination or calculation of the equation by
which the shares are redeemable. The Exchange has no obligation or liability to
owners of the shares of any Fund in connection with the administration,
marketing, or trading of the shares of the Fund.
The Exchange does not guarantee the accuracy and/or the completeness of any
Index or any data included therein. The Exchange makes no warranty, express or
implied, as to results to be obtained by the WisdomTree Trust on behalf of its
Funds, owners of the shares, or any other person or entity from the use of the
subject Indexes or any data included therein. The Exchange makes no express or
implied warranties, and hereby expressly disclaims all warranties of
merchantability or fitness for a particular purpose with respect to any Index or
any data included therein. Without limiting any of the foregoing, in no event
shall the Exchange have any liability for any lost profits or indirect,
punitive, special, or consequential damages even if notified of the possibility
thereof.
WisdomTree Investments, WisdomTree Asset Management and the Funds make no
representation or warranty, express or implied, to the owners of shares of the
Funds or any member of the public regarding the advisability of investing in
securities generally or in the Funds particularly or the ability of the Indexes
to track general stock market performance. WisdomTree
46 WisdomTree Trust Prospectus
Investments is the licensor of certain trademarks, service marks and trade names
of the Funds. WisdomTree Investments has no obligation to take the needs of the
Funds or the owners of shares of the Funds into consideration in determining,
composing, or calculating the Indexes. WisdomTree Investments is not responsible
for and has not participated in the determination of the timing of, prices at,
or quantities of shares of the Funds to be issued or in the determination or
calculation of the equation by which the shares of the Funds are redeemable.
WisdomTree Investments, WisdomTree Asset Management and the Funds do not
guarantee the accuracy, completeness, or performance of any Index or the data
included therein.
Financial Highlights
The financial highlights table is intended to help you understand each Fund's
financial performance since inception. The total return in the table represent
the rate that an investor would have earned (or lost) on an investment in the
respective Fund (assuming reinvestment of all dividends and distributions). This
information has been derived from the financial statements audited by Ernst &
Young LLP, independent registered public accounting firm, whose report, along
with the Funds' financial statements, are included in the Funds' Annual Report,
which is available upon request.
WisdomTree Trust Prospectus 47
Financial Highlights
WisdomTree International Sector Funds
Selected data for a share of beneficial interest outstanding throughout the
indicated period is presented below:
---------------------------------------------------------------------------------------------------------------------
For the For the period
Year Ended October 13, 2006(1) through
WisdomTree International Basic Materials Sector Fund March 31, 2008 March 31, 2007
---------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 32.03 $ 25.46
---------------------------------------------------------------------------------------------------------------------
Investment operations:
Net investment income(2) 0.61 0.25
Net realized and unrealized gain 3.58 6.32
---------------------------------------------------------------------------------------------------------------------
Total from investment operations 4.19 6.57
---------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Net investment income (0.26) --
Capital gains (0.00)(3) --
---------------------------------------------------------------------------------------------------------------------
Total dividends and distributions to shareholders (0.26) --
---------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 35.96 $ 32.03
---------------------------------------------------------------------------------------------------------------------
TOTAL RETURN(4) 13.09% 25.81%
---------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted) $ 93,507 $ 6,406
Ratio to average net assets of:
Expenses, net of expense reimbursements 0.58% 0.58%(5)
Expenses, prior to expense reimbursements 0.58% 0.88%(5)
Net investment income 1.62% 1.89%(5)
---------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(6) 11% 0%(7)
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
For the For the period
Year Ended October 13, 2006(1) through
WisdomTree International Communications Sector Fund March 31, 2008 March 31, 2007
---------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 28.97 $ 25.38
---------------------------------------------------------------------------------------------------------------------
Investment operations:
Net investment income(2) 1.17 0.16
Net realized and unrealized gain 1.13 3.61
---------------------------------------------------------------------------------------------------------------------
Total from investment operations 2.30 3.77
---------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Net investment income (0.80) (0.18)
Capital gains (0.00)(3) (0.00)(3)
---------------------------------------------------------------------------------------------------------------------
Total dividends and distributions to shareholders (0.80) (0.18)
---------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 30.47 $ 28.97
---------------------------------------------------------------------------------------------------------------------
TOTAL RETURN(4) 7.62% 14.87%
---------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted) $ 30,472 $ 23,174
Ratio to average net assets of:
Expenses, net of expense reimbursements 0.58% 0.58%(5)
Expenses, prior to expense reimbursements 0.58% 0.72%(5)
Net investment income 3.56% 1.43%(5)
---------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(6) 19% 0%(7)
---------------------------------------------------------------------------------------------------------------------
(1) Commencement of investment operations.
(2) Based on average shares outstanding.
(3) Amount is less than $0.005.
(4) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all dividends
and distributions at net asset value during the period and redemption on
the last day of the period. Total return calculated for a period of less
than one year is not annualized. The total return would have been lower if
certain expenses had not been reimbursed by the investment adviser.
(5) Annualized.
(6) Portfolio turnover rate is not annualized and excludes the value of
portfolio securities received or delivered as a result of in-kind
creations or redemptions of the Fund's capital shares.
(7) Amount represents less than 1%.
48 WisdomTree Trust Prospectus
Financial Highlights
WisdomTree International Sector Funds
Selected data for a share of beneficial interest outstanding throughout the
indicated period is presented below:
---------------------------------------------------------------------------------------------------------------------
For the For the period
Year Ended October 13, 2006(1) through
WisdomTree International Consumer Discretionary Sector Fund March 31, 2008 March 31, 2007
---------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 30.44 $ 25.27
---------------------------------------------------------------------------------------------------------------------
Investment operations:
Net investment income(2) 0.64 0.15
Net realized and unrealized gain (loss) (3.89) 5.06
---------------------------------------------------------------------------------------------------------------------
Total from investment operations (3.25) 5.21
---------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Net Investment Income (0.63) (0.04)
Capital gains (0.04) (0.00)(3)
---------------------------------------------------------------------------------------------------------------------
Total dividends and distributions to shareholders (0.67) (0.04)
---------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 26.52 $ 30.44
---------------------------------------------------------------------------------------------------------------------
TOTAL RETURN(4) (10.82)% 20.63%
---------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted) $ 5,304 $ 6,089
Ratio to average net assets of:
Expenses, net of expense reimbursements 0.58% 0.58%(5)
Expenses, prior to expense reimbursements 0.58% 0.89%(5)
Net investment income 2.11% 1.18%(5)
---------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(6) 21% 3%
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
For the For the period
Year Ended October 13, 2006(1) through
WisdomTree International Consumer Staples Sector Fund March 31, 2008 March 31, 2007
---------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 28.23 $ 24.89
---------------------------------------------------------------------------------------------------------------------
Investment operations:
Net investment income(2) 0.66 0.25
Net realized and unrealized gain (loss) (0.31) 3.11
---------------------------------------------------------------------------------------------------------------------
Total from investment operations 0.35 3.36
---------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Net investment income (0.50) (0.02)
Capital gains (0.01) (0.00)(3)
---------------------------------------------------------------------------------------------------------------------
Total dividends and distributions to shareholders (0.51) (0.02)
---------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 28.07 $ 28.23
---------------------------------------------------------------------------------------------------------------------
TOTAL RETURN(4) 1.12% 13.49%
---------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted) $ 33,689 $ 22,583
Ratio to average net assets of:
Expenses, net of expense reimbursements 0.58% 0.58%(5)
Expenses, prior to expense reimbursements 0.58% 0.69%(5)
Net investment income 2.30% 2.08%(5)
---------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(6) 8% 2%
---------------------------------------------------------------------------------------------------------------------
(1) Commencement of investment operations.
(2) Based on average shares outstanding.
(3) Amount is less than $0.005.
(4) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all dividends
and distributions at net asset value during the period and redemption on
the last day of the period. Total return calculated for a period of less
than one year is not annualized. The total return would have been lower if
certain expenses had not been reimbursed by the investment adviser.
(5) Annualized.
(6) Portfolio turnover rate is not annualized and excludes the value of
portfolio securities received or delivered as a result of in-kind
creations or redemptions of the Fund's capital shares.
WisdomTree Trust Prospectus 49
Financial Highlights
WisdomTree International Sector Funds
Selected data for a share of beneficial interest outstanding throughout the
indicated period is presented below:
---------------------------------------------------------------------------------------------------------------------
For the For the period
Year Ended October 13, 2006(1) through
WisdomTree International Energy Sector Fund March 31, 2008 March 31, 2007
---------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 28.55 $ 25.44
---------------------------------------------------------------------------------------------------------------------
Investment operations:
Net investment income(2) 0.79 0.22
Net realized and unrealized gain 3.18 2.92
---------------------------------------------------------------------------------------------------------------------
Total from investment operations 3.97 3.14
---------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Net investment income (0.53) (0.03)
Capital gains (0.01) --
---------------------------------------------------------------------------------------------------------------------
Total dividends and distributions to shareholders (0.54) (0.03)
---------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 31.98 $ 28.55
---------------------------------------------------------------------------------------------------------------------
TOTAL RETURN(3) 13.84% 12.36%
---------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted) $ 57,562 $ 22,840
Ratio to average net assets of:
Expenses, net of expense reimbursements 0.58% 0.58%(4)
Expenses, prior to expense reimbursements 0.58% 0.69%(4)
Net investment income 2.43% 1.82%(4)
---------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(5) 13% 1%
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
For the For the period
Year Ended October 13, 2006(1) through
WisdomTree International Financial Sector Fund March 31, 2008 March 31, 2007
---------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 27.90 $ 25.34
---------------------------------------------------------------------------------------------------------------------
Investment operations:
Net investment income(2) 0.89 0.19
Net realized and unrealized gain (loss) (3.70) 2.42
---------------------------------------------------------------------------------------------------------------------
Total from investment operations (2.81) 2.61
---------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Net investment income (0.74) (0.05)
Capital gains (0.06) (0.00)(6)
---------------------------------------------------------------------------------------------------------------------
Total dividends and distributions to shareholders (0.80) (0.05)
---------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 24.29 $ 27.90
---------------------------------------------------------------------------------------------------------------------
TOTAL RETURN(3) (10.29)% 10.32%
---------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted) $ 19,434 $ 22,321
Ratio to average net assets of:
Expenses, net of expense reimbursements 0.58% 0.58%(4)
Expenses, prior to expense reimbursements 0.58% 0.86%(4)
Net investment income 3.24% 1.98%(4)
---------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(5) 15% 5%
---------------------------------------------------------------------------------------------------------------------
(1) Commencement of investment operations.
(2) Based on average shares outstanding.
(3) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all dividends
and distributions at net asset value during the period and redemption on
the last day of the period. Total return calculated for a period of less
than one year is not annualized. The total return would have been lower if
certain expenses had not been reimbursed by the investment adviser.
(4) Annualized.
(5) Portfolio turnover rate is not annualized and excludes the value of
portfolio securities received or delivered as a result of in-kind
creations or redemptions of the Fund's capital shares.
(6) Amount represents less than $0.005.
50 WisdomTree Trust Prospectus
Financial Highlights
WisdomTree International Sector Funds
Selected data for a share of beneficial interest outstanding throughout the
indicated period is presented below:
---------------------------------------------------------------------------------------------------------------------
For the For the period
Year Ended October 13, 2006(1) through
WisdomTree International Health Care Sector Fund March 31, 2008 March 31, 2007
---------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 26.92 $ 24.93
---------------------------------------------------------------------------------------------------------------------
Investment operations:
Net investment income(2) 0.82 0.22
Net realized and unrealized gain (loss) (2.05) 1.78
---------------------------------------------------------------------------------------------------------------------
Total from investment operations (1.23) 2.00
---------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Net Investment Income (0.55) (0.01)
Capital gains (0.01) --
---------------------------------------------------------------------------------------------------------------------
Total dividends and distributions to shareholders (0.56) (0.01)
---------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 25.13 $ 26.92
---------------------------------------------------------------------------------------------------------------------
TOTAL RETURN(3) (4.66)% 8.03%
---------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted) $ 25,128 $ 21,536
Ratio to average net assets of:
Expenses, net of expense reimbursements 0.58% 0.58%(4)
Expenses, prior to expense reimbursements 0.58% 0.69%(4)
Net investment income 3.05% 1.81%(4)
---------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(5) 4% 3%
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
For the For the period
Year Ended October 13, 2006(1) through
WisdomTree International Industrial Sector Fund March 31, 2008 March 31, 2007
---------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 31.14 $ 25.39
---------------------------------------------------------------------------------------------------------------------
Investment operations:
Net investment income(2) 0.64 0.23
Net realized and unrealized gain (loss) (1.05) 5.54
---------------------------------------------------------------------------------------------------------------------
Total from investment operations (0.41) 5.77
---------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Net investment income (0.45) (0.02)
Capital gains (0.03) (0.00)(6)
---------------------------------------------------------------------------------------------------------------------
Total dividends and distributions to shareholders (0.48) (0.02)
---------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 30.25 $ 31.14
---------------------------------------------------------------------------------------------------------------------
TOTAL RETURN(3) (1.38)% 22.75%
---------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted) $ 48,402 $ 24,910
Ratio to average net assets of:
Expenses, net of expense reimbursements 0.58% 0.58%(4)
Expenses, prior to expense reimbursements 0.58% 0.76%(4)
Net investment income 1.93% 1.98%(4)
---------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(5) 11% 1%
---------------------------------------------------------------------------------------------------------------------
(1) Commencement of investment operations.
(2) Based on average shares outstanding.
(3) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all dividends
and distributions at net asset value during the period and redemption on
the last day of the period. Total return calculated for a period of less
than one year is not annualized. The total return would have been lower if
certain expenses had not been reimbursed by the investment adviser.
(4) Annualized.
(5) Portfolio turnover rate is not annualized and excludes the value of
portfolio securities received or delivered as a result of in-kind
creations or redemptions of the Fund's capital shares.
(6) Amount is less than $0.005.
WisdomTree Trust Prospectus 51
Financial Highlights
WisdomTree International Sector Funds
Selected data for a share of beneficial interest outstanding throughout the
indicated period is presented below:
----------------------------------------------------------------------------------------------
For the period
June 5, 2007(1)
through
WisdomTree International Real Estate Fund March 31, 2008
----------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 51.89
----------------------------------------------------------------------------------------------
Investment operations:
Net investment income(2) 1.22
Net realized and unrealized loss (9.32)
----------------------------------------------------------------------------------------------
Total from investment operations (8.10)
----------------------------------------------------------------------------------------------
Dividends to shareholders:
Net investment income (1.95)
----------------------------------------------------------------------------------------------
Total dividends to shareholders (1.95)
----------------------------------------------------------------------------------------------
Net asset value, end of period $ 41.84
----------------------------------------------------------------------------------------------
TOTAL RETURN(4) (15.90)%
----------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted) $ 112,962
Ratio to average net assets of:
Net expenses 0.58%(5)
Net investment income 3.17%(5)
----------------------------------------------------------------------------------------------
Portfolio turnover rate(6) 15%
----------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------
For the For the period
Year Ended October 13, 2006(1) through
WisdomTree International Technology Sector Fund March 31, 2008 March 31, 2007
------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 26.23 $ 25.13
------------------------------------------------------------------------------------------------
Investment operations:
Net investment income(2) 0.36 0.11
Net realized and unrealized gain (loss) (2.94) 1.02
------------------------------------------------------------------------------------------------
Total from investment operations (2.58) 1.13
------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Net investment income (0.21) (0.03)
------------------------------------------------------------------------------------------------
Capital gains (0.00)(3) --
------------------------------------------------------------------------------------------------
Total dividends and distributions to shareholders (0.21) (0.03)
------------------------------------------------------------------------------------------------
Net asset value, end of period $ 23.44 $ 26.23
------------------------------------------------------------------------------------------------
TOTAL RETURN(4) (9.85)% 4.51%
------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted) $ 9,378 $ 5,246
Ratio to average net assets of:
Expenses, net of expense reimbursements 0.58% 0.58%(5)
Expenses, prior to expense reimbursements 0.58% 0.91%(5)
Net investment income 1.28% 0.87%(5)
----------------------------------------------------------------------------------------------
Portfolio turnover rate(6) 14% 2%
----------------------------------------------------------------------------------------------
(1) Commencement of investment operations.
(2) Based on average shares outstanding.
(3) Amount is less than $0.005.
(4) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all dividends
and distributions at net asset value during the period and redemption on
the last day of the period. Total return calculated for a period of less
than one year is not annualized. The total return would have been lower if
certain expenses had not been reimbursed by the investment adviser.
(5) Annualized.
(6) Portfolio turnover rate is not annualized and excludes the value of
portfolio securities received or delivered as a result of in-kind
creations or redemptions of the Fund's capital shares.
52 WisdomTree Trust Prospectus
Financial Highlights
WisdomTree International Sector Funds
Selected data for a share of beneficial interest outstanding throughout the
indicated period is presented below:
------------------------------------------------------------------------------------------------
For the For the period
Year Ended October 13, 2006(1) through
WisdomTree International Utilities Sector Fund March 31, 2008 March 31, 2007
------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 29.71 $ 24.96
------------------------------------------------------------------------------------------------
Investment operations:
Net investment income(2) 0.55 0.18
Net realized and unrealized gain 2.75 4.61
------------------------------------------------------------------------------------------------
Total from investment operations 3.30 4.79
------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Net investment income (0.28) (0.04)
------------------------------------------------------------------------------------------------
Capital gains (0.00)(3) --
------------------------------------------------------------------------------------------------
Total dividends and distributions to shareholders (0.28) (0.04)
------------------------------------------------------------------------------------------------
Net asset value, end of period $ 32.73 $ 29.71
------------------------------------------------------------------------------------------------
TOTAL RETURN(4) 11.05% 19.18%
------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted) $ 78,561 $ 23,768
Ratio to average net assets of:
Expenses, net of expense reimbursements 0.58% 0.58%(5)
Expenses, prior to expense reimbursements 0.58% 0.68%(5)
Net investment income 1.62% 1.38%(5)
------------------------------------------------------------------------------------------------
Portfolio turnover rate(6) 13% 1%
------------------------------------------------------------------------------------------------
(1) Commencement of investment operations.
(2) Based on average shares outstanding.
(3) Amount is less than $0.005.
(4) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all dividends
and distributions at net asset value during the period and redemption on
the last day of the period. Total return calculated for a period of less
than one year is not annualized. The total return would have been lower if
certain expenses had not been reimbursed by the investment adviser.
(5) Annualized.
(6) Portfolio turnover rate is not annualized and excludes the value of
portfolio securities received or delivered as a result of in-kind
creations or redemptions of the Fund's capital shares.
WisdomTree Trust Prospectus 53
Frequency Distribution of Discounts & Premiums (unaudited)
WisdomTree International Sector Funds
The chart below presents information about differences between the per share net
asset value ("NAV") of each Fund and the market trading price of shares of each
Fund. For these purposes, the "market price" is the mid-point of the highest bid
and lowest offer for Fund shares as of the close of trading on the exchange
where Fund shares are listed. The term "premium" is sometimes used to describe a
market price in excess of NAV and the term "discount" is sometimes used to
describe a market price below NAV. The chart presents information about the size
and frequency of premiums or discounts. As with other exchange traded funds, the
market price of Fund shares is typically slightly higher or lower than the
Fund's per share NAV. Factors that contribute to the differences between market
price and NAV include the supply and demand for Fund shares and investors'
assessments of the underlying value of a Fund's portfolio securities.
Differences between the closing times of U.S. and non-U.S. markets may
contribute to differences between the NAV and market price of Fund shares. Many
non-U.S. markets close prior to the close of the U.S. securities exchanges.
Developments after the close of such markets as a result of ongoing price
discovery may be reflected in a Fund's market price but not in its NAV (or vice
versa).
------------------------------------------------------------------------------------------------------------------------------------
Market Price Above or Equal to Market Price Below
Net Asset Value Net Asset Value
------------------------------ ------------------------
Basis Point Number Percentage of Number Percentage of
Differential of Days Total Days of Days Total Days
------------------------------------------------------------------------------------------------------------------------------------
WisdomTree International Basic Materials Sector Fund
April 1, 2007 - June 30, 2008 0-24.9 38 12.06% 35 11.11%
----------------------------------------------------------------------
25-49.9 34 10.79% 21 6.67%
----------------------------------------------------------------------
50-74.9 48 15.24% 21 6.67%
----------------------------------------------------------------------
75-100.0 35 11.11% 15 4.76%
----------------------------------------------------------------------
>100.0 41 13.02% 27 8.57%
----------------------------------------------------------------------
Total 196 62.22% 119 37.78%
------------------------------------------------------------------------------------------------------------------------------------
WisdomTree International Communications Sector Fund
April 1, 2007 - June 30, 2008 0-24.9 27 8.57% 23 7.30%
----------------------------------------------------------------------
25-49.9 36 11.43% 24 7.62%
----------------------------------------------------------------------
50-74.9 45 14.29% 15 4.76%
----------------------------------------------------------------------
75-100.0 36 11.43% 10 3.17%
----------------------------------------------------------------------
>100.0 55 17.46% 44 13.97%
----------------------------------------------------------------------
Total 199 63.17% 116 36.83%
------------------------------------------------------------------------------------------------------------------------------------
WisdomTree International Consumer Discretionary Sector Fund
April 1, 2007 - June 30, 2008 0-24.9 66 20.95% 45 14.29%
----------------------------------------------------------------------
25-49.9 46 14.60% 26 8.25%
----------------------------------------------------------------------
50-74.9 21 6.67% 23 7.30%
----------------------------------------------------------------------
75-100.0 12 3.81% 16 5.08%
----------------------------------------------------------------------
>100.0 26 8.25% 34 10.79%
----------------------------------------------------------------------
Total 171 54.29% 144 45.71%
------------------------------------------------------------------------------------------------------------------------------------
WisdomTree International Consumer Staples Sector Fund
April 1, 2007 - June 30, 2008 0-24.9 39 12.38% 26 8.25%
----------------------------------------------------------------------
25-49.9 27 8.57% 18 5.71%
----------------------------------------------------------------------
50-74.9 45 14.29% 23 7.30%
----------------------------------------------------------------------
75-100.0 30 9.52% 21 6.67%
----------------------------------------------------------------------
>100.0 55 17.46% 31 9.84%
----------------------------------------------------------------------
Total 196 62.22% 119 37.78%
------------------------------------------------------------------------------------------------------------------------------------
54 WisdomTree Trust Prospectus
Frequency Distribution of Discounts & Premiums (unaudited) (concluded)
WisdomTree International Dividend Sector Funds
------------------------------------------------------------------------------------------------------------------------------------
Market Price Above or Equal to Market Price Below
Net Asset Value Net Asset Value
------------------------------ ------------------------
Basis Point Number Percentage of Number Percentage of
Differential of Days Total Days of Days Total Days
------------------------------------------------------------------------------------------------------------------------------------
WisdomTree International Energy Sector Fund
April 1, 2007 - June 30, 2008 0-24.9 34 10.79% 25 7.94%
----------------------------------------------------------------------
25-49.9 34 10.79% 20 6.35%
----------------------------------------------------------------------
50-74.9 27 8.57% 21 6.67%
----------------------------------------------------------------------
75-100.0 28 8.89% 12 3.81%
----------------------------------------------------------------------
>100.0 72 22.86% 42 13.33%
----------------------------------------------------------------------
Total 195 61.90% 120 38.10%
------------------------------------------------------------------------------------------------------------------------------------
WisdomTree International Financial Sector Fund
April 1, 2007 - June 30, 2008 0-24.9 20 6.35% 20 6.35%
----------------------------------------------------------------------
25-49.9 25 7.94% 13 4.13%
----------------------------------------------------------------------
50-74.9 50 15.87% 20 6.35%
----------------------------------------------------------------------
75-100.0 34 10.79% 18 5.71%
----------------------------------------------------------------------
>100.0 59 18.73% 56 17.78%
----------------------------------------------------------------------
Total 188 59.68% 127 40.32%
------------------------------------------------------------------------------------------------------------------------------------
WisdomTree International Health Care Sector Fund
April 1, 2007 - June 30, 2008 0-24.9 32 10.16% 15 4.76%
----------------------------------------------------------------------
25-49.9 44 13.97% 19 6.03%
----------------------------------------------------------------------
50-74.9 58 18.41% 16 5.08%
----------------------------------------------------------------------
75-100.0 29 9.21% 19 6.03%
----------------------------------------------------------------------
>100.0 67 21.27% 16 5.08%
----------------------------------------------------------------------
Total 230 73.02% 85 26.98%
------------------------------------------------------------------------------------------------------------------------------------
WisdomTree International Industrial Sector Fund
April 1, 2007 - June 30, 2008 0-24.9 31 9.84% 28 8.89%
----------------------------------------------------------------------
25-49.9 39 12.38% 25 7.94%
----------------------------------------------------------------------
50-74.9 51 16.19% 16 5.08%
----------------------------------------------------------------------
75-100.0 26 8.25% 18 5.71%
----------------------------------------------------------------------
>100.0 42 13.33% 39 12.38%
----------------------------------------------------------------------
Total 189 60.00% 126 40.00%
------------------------------------------------------------------------------------------------------------------------------------
WisdomTree International Technology Sector Fund
April 1, 2007 - June 30, 2008 0-24.9 33 10.48% 27 8.57%
----------------------------------------------------------------------
25-49.9 43 13.65% 16 5.08%
----------------------------------------------------------------------
50-74.9 33 10.48% 14 4.44%
----------------------------------------------------------------------
75-100.0 34 10.79% 11 3.49%
----------------------------------------------------------------------
>100.0 78 24.76% 26 8.25%
----------------------------------------------------------------------
Total 221 70.16% 94 29.84%
------------------------------------------------------------------------------------------------------------------------------------
WisdomTree International Utilities Sector Fund
April 1, 2007 - June 30, 2008 0-24.9 26 8.25% 28 8.89%
----------------------------------------------------------------------
25-49.9 39 12.38% 13 4.13%
----------------------------------------------------------------------
50-74.9 37 11.75% 25 7.94%
----------------------------------------------------------------------
75-100.0 40 12.70% 18 5.71%
----------------------------------------------------------------------
>100.0 51 16.19% 38 12.06%
----------------------------------------------------------------------
Total 193 61.27% 122 38.73%
------------------------------------------------------------------------------------------------------------------------------------
WisdomTree Trust Prospectus 55
Frequency Distribution of Discounts & Premiums (unaudited) (concluded)
WisdomTree International Dividend Sector Funds
------------------------------------------------------------------------------------------------------------------------------------
Market Price Above or Equal to Market Price Below
Net Asset Value Net Asset Value
------------------------------ ------------------------
Basis Point Number Percentage of Number Percentage of
Differential of Days Total Days of Days Total Days
------------------------------------------------------------------------------------------------------------------------------------
WisdomTree International Real Estate Fund
June 5, 2007 - June 30, 2008 0-24.9 26 9.59% 22 8.12%
----------------------------------------------------------------------
25-49.9 31 11.44% 14 5.17%
----------------------------------------------------------------------
50-74.9 43 15.87% 11 4.06%
----------------------------------------------------------------------
75-100.0 30 11.07% 6 2.21%
----------------------------------------------------------------------
>100.0 65 23.99% 23 8.49%
----------------------------------------------------------------------
Total 195 71.96% 76 28.04%
------------------------------------------------------------------------------------------------------------------------------------
56 WisdomTree Trust Prospectus
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WisdomTree Trust Prospectus 57
The Trust's current SAI provides additional detailed information about the
Funds. The Trust has electronically filed the SAI with the SEC. It is
incorporated by reference in this Prospectus.
Additional information about the Funds' investments is available in the Funds'
annual and semi-annual reports to shareholders. In the annual report you will
find a discussion of the market conditions and investment strategies that
significantly affected the Funds' performance during the last fiscal year.
To make shareholder inquiries, for more detailed information on the Funds or to
request the SAI, annual or semi-annual shareholder reports free of charge,
please:
--------------------------------------------------------------------------------
Call: 1-866-909-9473
Monday through Friday
8:00 a.m. - 8:00 p.m. (Eastern time)
--------------------------------------------------------------------------------
Write: WisdomTree Trust
c/o ALPS Distributors, Inc.
1290 Broadway, Suite 1100
Denver, Colorado 80203
--------------------------------------------------------------------------------
Visit: www.wisdomtree.com
--------------------------------------------------------------------------------
Information about the Funds (including the SAI) can be reviewed and copied at
the SEC's Public Reference Room in Washington, D.C., and information on the
operation of the Public Reference Room may be obtained by calling the SEC at
1-202-942-8090. Reports and other information about the Funds are available on
the EDGAR Database on the SEC's Internet site at www.sec.gov, and copies of this
information may be obtained, after paying a duplicating fee, by electronic
request at the following E-mail address: publicinfo@sec.gov, or by writing the
SEC's Public Reference Section, Washington, D.C. 20549-0102.
No person is authorized to give any information or to make any representations
about any Fund and its shares not contained in this Prospectus and you should
not rely on any other information. Read and keep this Prospectus for future
reference.
(C)2008 WisdomTree Trust
WisdomTree Funds are distributed by ALPS Distributors, Inc.
1290 Broadway, Suite 1100
Denver, Colorado 80203
WisdomTree(R) is a registered mark of WisdomTree Investments, Inc.
INVESTMENT COMPANY ACT FILE NO. 811-21864
[WISDOMTREE LOGO]
WisdomTree Trust
380 Madison Avenue, 21st Floor
New York, NY 10017
[WISDOMTREE LOGO]
--------------------------------------------------------------------------------
Equity Funds
--------------------------------------------------------------------------------
PROSPECTUS
July 29, 2008
--------------------------------------------------------------------------------
WisdomTree(R) Trust
--------------------------------------------------------------------------------
WisdomTree
Earnings Funds
WisdomTree India Earnings Fund
WisdomTree Total Earnings Fund
WisdomTree Earnings 500 Fund
WisdomTree MidCap Earnings Fund
WisdomTree SmallCap Earnings Fund
WisdomTree Earnings Top 100 Fund
WisdomTree Low P/E Fund
--------------------------------------------------------------------------------
THE 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 Trust (the "Trust") is a registered investment company that consists
of separate investment portfolios called "Funds." Each Fund seeks investment
results that closely correspond to the price and yield performance, before fees
and expenses, of a particular index that defines a specific segment of the U.S.
or Indian stock market. The indexes are created using proprietary methodologies
developed by WisdomTree Investments, Inc. The Funds described in this Prospectus
are listed in the Table of Contents.
Each Fund is an "exchange traded fund." This means that shares of the Funds are
listed on a national securities exchange, such as NYSE Arca, and trade at market
prices. The market price for a Fund's shares may be different from its net asset
value per share ("NAV"). Each Fund has its own CUSIP number and exchange trading
symbol.
Each Fund described in this Prospectus issues and redeems shares at NAV only in
large blocks of shares, typically 50,000 shares or more ("Creation Units").
These transactions are usually in exchange for a basket of securities and an
amount of cash. As a practical matter, only institutions or large investors
purchase or redeem Creation Units. Except when aggregated in Creation Units,
shares of each Fund are not redeemable securities.
--------------------------------------------------------------------------------
A NOTE TO RETAIL INVESTORS
Shares can be purchased directly from the issuing Fund only in exchange for a
basket of securities that is expected to be worth several million dollars. Most
individual investors, therefore, will not be able to purchase shares directly
from a Fund. Instead, these investors will purchase shares in the secondary
market through a brokerage account or with the assistance of a broker. Thus,
some of the information contained in this Prospectus - such as information about
purchasing and redeeming shares from a Fund and references to transaction fees
imposed on purchases and redemptions - is not relevant to most individual
investors. Shares purchased or sold through a brokerage account or with the
assistance of a broker may be subject to brokerage commissions and charges.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
INVESTMENT PRODUCTS: o ARE NOT FDIC INSURED o MAY LOSE VALUE
o ARE NOT BANK GUARANTEED
--------------------------------------------------------------------------------
WisdomTree Trust
--------------------------------------------------------------------------------
Table of Contents
--------------------------------------------------------------------------------
Overview 2
Investment Objective 2
Principal Investment Strategies 2
Principal Risk Factors Common to All Funds 3
WisdomTree Earnings Funds 6
WisdomTree India Earnings Fund 6
WisdomTree Total Earnings Fund 10
WisdomTree Earnings 500 Fund 12
WisdomTree MidCap Earnings Fund 14
WisdomTree SmallCap Earnings Fund 16
WisdomTree Earnings Top 100 Fund 18
WisdomTree Low P/E Fund 20
Management 22
Investment Adviser 22
Sub-Adviser 22
Portfolio Managers 23
Portfolio Holdings Information 23
Buying and Selling Shares 23
Share Trading Prices 24
Determination of Net Asset Value 24
Dividends and Distributions 25
Book Entry 25
Delivery of Shareholder Documents - Householding 25
Frequent Purchases and Redemptions of Fund Shares 25
Investments by Registered Investment Companies 25
Taxes 26
Taxes on Distributions 26
Taxes When Fund Shares are Sold 27
Taxes on Creation and Redemption of Creation Units 27
Creation and Redemption 28
Authorized Participants and the Continuous Offering of Shares 28
Creation and Redemption Transaction Fees for Creation Units 28
Distribution 29
Additional Notices 29
Financial Highlights 31
Frequency Distribution of Discounts & Premiums 35
WisdomTree Trust Prospectus 1
Overview
This Prospectus provides the information you need to make an informed decision
about investing in the Funds.* It contains important facts about the Trust as a
whole and each Fund in particular.
Each Fund is an exchange-traded fund ("ETF"). ETFs are index funds whose shares
are listed on a stock exchange and traded like equity securities at market
prices. ETFs, such as the Funds, allow you to buy or sell shares that represent
the collective performance of a selected group of securities. ETFs are designed
to add the flexibility, ease and liquidity of stock-trading to the benefits of
traditional index-fund investing.
WisdomTree Asset Management, Inc. ("WisdomTree Asset Management") is the
investment adviser to each Fund. WisdomTree Investments, Inc. ("WisdomTree
Investments") is the parent company of WisdomTree Asset Management.
Investment Objective
Each Fund seeks investment returns that closely correspond to the price and
yield performance, before fees and expenses, of a particular index ("Index")
developed by WisdomTree Investments. Each Index consists of securities in the
market suggested by its name that meet specific criteria developed by WisdomTree
Investments.
Principal Investment Strategies
Each Fund tracks a specific stock Index created by WisdomTree Investments that
is designed to measure a specific segment of the market for U.S. or Indian
securities. Each Fund seeks investment returns that closely correspond to the
price and yield performance, before fees and expenses, of its underlying Index.
Common stocks, real estate investment trusts and holding companies are eligible
for inclusion in each Index.
The WisdomTree Indexes are "fundamentally weighted." The Indexes differ from
most traditional indexes in that the proportion, or weighting, of the securities
in each Index is based on a measure of fundamental value. In this case, the
Indexes are weighted based on earnings or earnings yield. Most traditional
indexes and index funds weight their securities by looking simply at the market
capitalization of such securities.
The "Earnings" Indexes weight securities based on either the amount of earnings
of the companies in each Index or the earnings yields of such companies. This
means that securities of companies that have higher earnings or earnings yields
generally will be more heavily weighted in each Earnings Index and Fund. To
determine a company's earnings, each Earnings Index (except the India Earnings
Index) currently uses the concept of "Core Earnings." Core Earnings is a
standardized calculation of earnings developed by Standard & Poor's that is
designed to include expenses, incomes and activities that reflect the actual
profitability of a company's ongoing operations.** The India Earnings Index
weights companies based on earnings in their fiscal year prior to the Index
measurement date adjusted for a factor that takes into account shares available
to foreign investors. "Earnings" for this Index are determined using a company's
reported net income.
Under normal circumstances, at least 95% of a Fund's total assets (exclusive of
collateral held from securities lending) will be invested in the component
securities of its Index. Each Fund will normally invest at least 80% of its net
assets, plus the amount of any borrowings for investment purposes, in the types
of securities suggested by its name. Each Fund generally may invest up to 5% of
its total assets in securities not included in its Index, but which the Fund
believes will help it track its Index. For example, a Fund may invest in
securities that are not components of its Index in order to reflect various
corporate actions and other changes to its Index (such as reconstitutions,
additions and deletions). Under normal circumstances, as long as a Fund invests
at least 95% of its total assets in the securities of its Index, it also may
invest its other assets in cash and cash equivalents, as well as in
--------------------------------------------------------------------------------
* "WisdomTree" is a registered mark of WisdomTree Investments and has been
licensed for use by the Trust. WisdomTree Investments has patent
applications pending on the methodology and operation of its Indexes and
the Funds.
** WisdomTree Investments has contracted with Standard & Poor's ("S&P") to
calculate each Earnings Index. S&P shall have no liability for any errors
or omissions in calculating any Earnings Index.
2 WisdomTree Trust Prospectus
shares of other investment companies, futures contracts, options on futures
contracts, options, and swaps. WisdomTree Asset Management expects that, over
time, the correlation between each Fund's performance and that of its Index,
before fees and expenses, will be 95% or better.
Each Fund uses a "Representative Sampling" strategy in seeking to track the
performance of its Index. A Fund using a Representative Sampling strategy
generally will invest in a sample of the securities in its Index whose risk,
return and other characteristics closely resemble the risk, return and other
characteristics of the Index as a whole.
To the extent that a Fund's underlying Index concentrates (i.e., holds 25% or
more of its total assets) in the securities of a particular industry or group of
industries, a Fund will concentrate its investments to approximately the same
extent as its Index.
Principal Risk Factors Common to All Funds
Each Fund is subject to the risks described below. Certain additional risks
associated with a Fund are discussed in the specific section describing that
Fund. Some or all of these risks may adversely affect a Fund's NAV, trading
price, yield, total return and/or its ability to meet its objectives.
Stock Market Risk
The trading price of equity securities fluctuates in response to a variety of
factors. These factors include events impacting a single issuer, as well as
political, market and economic developments that affect specific market segments
and the market as a whole. Each Fund's NAV and market price, like stock prices
generally, will fluctuate within a wide range in response to these factors. As a
result, an investor could lose money over short or even long periods.
Investment Style Risk
The returns from the types of securities in which a Fund invests may
underperform returns from the various general securities markets or different
asset classes. This may cause a 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.
Interest Rate Risk
Each of the underlying Indexes, and therefore the Funds, may be more heavily
weighted than other types of investments in market sectors that are sensitive to
interest rate fluctuations (such as the financial and real estate sectors). The
Funds therefore may be more sensitive to fluctuations in interest rates than
other types of investments. In particular, increases to prevailing interest
rates could have a negative impact on the performance of the Funds.
Investment Approach Risk
Each Fund invests in the securities included in, or representative of, its Index
regardless of their investment merit. The Funds do not attempt to outperform
their Indexes or take defensive positions in declining markets. As a result,
each Fund's performance may be adversely affected by a general decline in the
U.S. or foreign market segments relating to its Index.
WisdomTree Trust Prospectus 3
Concentration Risk
To the extent that a Fund's Index concentrates in the securities of a particular
industry or group of industries, the Fund will concentrate its investments to
approximately the same extent as its Index. A Fund that concentrates, or
otherwise invests a large portion of its assets in a single industry or group of
industries, may be more susceptible to any single economic, market, political or
regulatory occurrence affecting that industry or group of industries. In such
case, a Fund may be more volatile than funds based on broader or less volatile
market segments.
Financial Sector Risk
The Funds generally invest a relatively large percentage of their assets in
securities of companies in the financial sector and therefore the performance of
the Funds will be impacted by events affecting this sector. This sector can be
significantly affected by changes in interest rates, the rate of corporate and
consumer debt defaulted, price competition, and the availability and cost of
capital.
Non-Diversification Risk
Each 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. As a result, a 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 a Fund's performance.
Issuer-Specific Risk
Changes in the financial condition of an issuer or counterparty, changes in
specific economic or political conditions that affect a particular type of
security or issuer, and changes in general economic or political conditions can
affect a security's or instrument's value. The value of securities of smaller,
less well-known issuers can be more volatile than that of larger issuers.
Issuer-specific events can have a negative impact on the value of a Fund.
Non-Correlation Risk
The performance of a Fund and its Index may vary somewhat for a variety of
reasons. For example, each Fund incurs operating expenses and portfolio
transaction costs not incurred by its Index. In addition, a Fund may not be
fully invested in the securities of its Index at all times. The use of sampling
techniques may affect a Fund's ability to achieve close correlation with its
Index. A Fund using a Representative Sampling strategy generally can be expected
to have a greater non-correlation risk.
Management Risk
Because each Fund may not fully replicate its Index and may hold securities not
included in its Index, a Fund is subject to management risk. This is the risk
that the Fund's investment strategy, the implementation of which is subject to a
number of constraints, may not produce the intended results.
Market Trading Risk
Although Fund shares are listed on national securities exchanges, there can be
no assurance that an active trading market for Fund shares will develop or be
maintained. If an active market is not maintained, investors may find it
difficult to buy or sell Fund shares. Trading of shares of a Fund on a stock
exchange may be halted if exchange officials deem such action appropriate, if
the Fund is delisted, or if the activation of marketwide "circuit breakers"
halts stock trading generally. If a Fund's shares are delisted, the Fund may
seek to list its shares on another market, merge with another ETF or redeem its
shares at NAV. WisdomTree Asset Management believes that, under normal market
conditions, large market price discounts or premiums to NAV will not be
sustained because of arbitrage opportunities.
4 WisdomTree Trust Prospectus
Shares of the Funds 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
each Fund will approximate the respective Fund's NAV, there may be times when
the market price and the NAV vary significantly. Thus, you may pay more than NAV
when you buy shares of a Fund in the secondary market, and you may receive less
than NAV when you sell those shares in the secondary market.
The market price of Fund shares during the trading day, like the price of any
exchange-traded security, includes a "bid/ask" spread charged by the exchange
specialist, market makers or other participants that trade the Fund shares. The
bid/ask spread on ETF shares is likely to be larger on ETFs that are traded less
frequently. In addition, in times of severe market disruption, the bid/ask
spread can increase significantly. At those times, Fund shares are most likely
to be traded at a discount to NAV, and the discount is likely to be greatest
when the price of shares is falling fastest, which may be the time that you most
want to sell your shares. WisdomTree Asset Management believes that, under
normal market conditions, large market price discounts or premiums to NAV will
not be sustained because of arbitrage opportunities.
Lack of Governmental Insurance or Guarantee
An investment in a Fund is not a bank deposit and it is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
WisdomTree Trust Prospectus 5
--------------------------------------------------------------------------------
WisdomTree Earnings Funds
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
WisdomTree India
Earnings Fund
Fund Facts
--------------------------------------------------------------------------------
Cusip Number:
o 97717W422
Exchange Trading Symbol:
o EPI
--------------------------------------------------------------------------------
WisdomTree India Earnings Fund
Investment Objective
The Fund seeks to track the price and yield performance, before fees and
expenses, of the WisdomTree India Earnings Index. The Index measures the
performance of profitable companies incorporated and traded in India that are
eligible to be purchased by foreign investors and that meet specific criteria
developed by WisdomTree Investments. Since the Fund's investment objective has
been adopted as a non-fundamental investment policy, the Fund's investment
objective may be changed without a vote of shareholders.
Primary Investment Strategies
The Fund employs a "passive management" - or indexing - investment approach
designed to track the performance of the WisdomTree India Earnings Index. The
Fund attempts to invest all, or substantially all, of its assets in the stocks
that make up the Index. The Fund makes its investments through a wholly-owned
subsidiary, the WisdomTree India Investment Portfolio, Inc.
Index Description
The WisdomTree India Earnings Index consists of companies that: (i) are
incorporated in India, (ii) are listed on a major stock exchange in India; (iii)
have generated at least $5 million in earnings in their fiscal year prior to the
Index measurement date, (iv) have a market capitalization of at least $200
million on the Index measurement date, (v) have an average daily dollar volume
of at least $200,000 for each of the six months prior to the Index measurement
date, (vi) have traded at least 250,000 shares per month for each of the six
months prior to the Index measurement date, and (vii) have a price to earnings
ratio ("P/E ratio") of at least 2 as of the Index measurement date. Companies
are weighted in the Index based on earnings in their fiscal year prior to the
Index measurement date adjusted for a factor that takes into account shares
available to foreign investors. "Earnings" are determined using a company's
reported net income. Only common stocks and holding companies, including real
estate holding companies, are eligible for inclusion in the Index. As of June
30, 2008, approximately 57% of the weight of the Index consisted of securities
with market capitalizations of over $10 billion, approximately 28% of the Index
consisted of securities with market capitalizations between $2 and $10 billion,
and approximately 14% of the Index consisted of companies with market
capitalizations less than $2 billion.
6 WisdomTree Trust Prospectus
Primary Investment Risks
You can lose money on your investment in the Fund. For information about the
risks of investing in the Fund, see the section herein entitled "Principal Risk
Factors Common to All Funds." In addition, the Fund is subject to the following
potential risks. As with all potential risks, this could decrease the value of
your Fund investment.
o Emerging Markets Risk. Investing in securities listed and traded in
emerging markets may be subject to additional risks associated with
emerging market economies. 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. Emerging markets are generally less liquid
and less efficient than developed securities markets.
o Geographic Concentration Risk (India). Because the Fund invests a
significant portion of its assets in the securities of companies of a
single country, it will be impacted by events or conditions affecting that
country. Political and economic conditions and changes in regulatory, tax,
or economic policy in India could significantly affect the market in that
country and in surrounding or related countries and have a negative impact
on the Fund's performance. The Indian economy may differ favorably or
unfavorably from the U.S. economy in such respects as the rate of growth
of gross domestic product, the rate of inflation, capital reinvestment,
resource self-sufficiency and balance of payments position. Agriculture
occupies a prominent position in the Indian economy and the Indian economy
therefore may be negatively affected by adverse weather conditions. The
Indian government has exercised and continues to exercise significant
influence over many aspects of the economy, and the number of public
sector enterprises in India is substantial. Accordingly, Indian government
actions in the future could have a significant effect on the Indian
economy.
The Indian economy has experienced generally sustained growth during the
last several years. There are no guarantees this will continue. While the
Indian government has implemented economic structural reforms with the
objective of liberalizing India's exchange and trade policies, reducing
the fiscal deficit, controlling inflation, promoting a sound monetary
policy, reforming the financial sector, and placing greater reliance on
market mechanisms to direct economic activity, there can be no assurance
that these policies will continue or that the economic recovery will be
sustained.
Religious and border disputes persist in India. In addition, India has
experienced civil unrest and hostilities with neighboring countries such
as Pakistan. The Indian government has confronted separatist movements in
several Indian states. Investment and repatriation restrictions in India
may impact the ability of the Fund to track its Index. Each of the factors
described above could have a negative impact on the Fund's performance and
increase the volatility of the Fund.
o Currency Risk. 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.
o Small and Mid-Capitalization Investing. The Fund invests a relatively
large percentage of its assets in securities of small- and
mid-capitalization companies. As a result, the Fund may be more volatile
than funds that invest in larger, more established companies. The
securities of small- and mid- capitalization companies generally trade in
lower volumes and are subject to greater and more unpredictable price
changes than larger capitalization stocks or the stock market as a whole.
Small- and mid-capitalization companies may be particularly sensitive to
changes in interest rates, borrowing costs and earnings.
WisdomTree Trust Prospectus 7
o Energy Investing. The Fund generally invests a relatively large percentage
of its assets in the energy sector. The energy sector can be significantly
affected by, among other things: economic growth, worldwide demand,
political instability in the Middle East, and volatile oil prices.
o Basic Materials Investing. The Fund generally invests a relatively large
percentage of its assets in the basic materials sector. The basic
materials sector includes, for example, metals and mining, chemicals and
forest product companies. The basic materials sector can be significantly
affected by, among other things: commodity price volatility, demand for
basic materials, world economic growth, and depletion of natural
resources.
o Technology Investing. The Fund generally invests a relatively large
percentage of its assets in the technology sector. The technology sector
can be significantly affected by, among other things, worldwide economic
growth, supply and demand for specific products and services, rapid
technological development and government intervention.
o Cash Redemption Risk. Unlike most ETFs, the WisdomTree India Earnings Fund
does not generally make in-kind redemptions because restrictions on
in-kind transactions in India prevent the Fund from using this approach.
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 a capital gain it might not have recognized if it had made a
redemption in-kind. As a result, the Fund may pay out higher annual
capital gain distributions than if the in-kind redemption process was
used.
Performance Information
Although the Fund commenced operations on February 22, 2008, no performance
information is presented for the Fund because it has been in operation for less
than one full calendar year. After the first full calendar year, a risk/return
chart and table will be provided. Any past performance of the Fund that will be
shown will not be an indication of future results.
Fees and Expenses
The following table describes the fees and expenses you may pay if you buy and
hold shares of the Fund. The fees are expressed as a percentage of the Fund's
average net assets. You may also incur customary brokerage charges when buying
or selling Fund shares.
--------------------------------------------------------------------------------
Shareholder Fees
(fees paid directly from your investment, but see the Creation
Transaction Fees and Redemption Transaction Fees section below) None
--------------------------------------------------------------------------------
Annual Fund Operating Expenses (expenses deducted from Fund assets)
--------------------------------------------------------------------------------
Management Fees 0.68%
--------------------------------------------------------------------------------
Distribution and/or Service (12b-1) Fees None
--------------------------------------------------------------------------------
Other Expenses(a) 0.20%
--------------------------------------------------------------------------------
Total Expenses(b) 0.88%
--------------------------------------------------------------------------------
(a) "Other expenses" are based on estimated amounts for the current fiscal
year.
(b) WisdomTree Asset Management has agreed to limit Total Expenses to 0.88%
through March 31, 2009.
8 WisdomTree Trust Prospectus
The following example is intended to help retail investors compare the cost of
investing in the Fund with the cost of investing in other funds. It illustrates
the hypothetical expenses that such investors would incur over various periods
if they invest $10,000 in the Fund for the time periods indicated and then
redeemed all of the shares at the end of those periods. This example assumes
that the Fund provides a return of 5% a year and that operating expenses remain
the same. This example does not include the brokerage commission that retail
investors may pay to buy and sell shares of the Fund. Although your actual costs
may be higher or lower, based on these assumptions, your costs would be:
--------------------------------------------------------------------------------
1 Year 3 Years
--------------------------------------------------------------------------------
$90 $281
--------------------------------------------------------------------------------
You would pay the following expenses if you did not redeem your shares:
--------------------------------------------------------------------------------
1 Year 3 Years
--------------------------------------------------------------------------------
$90 $281
--------------------------------------------------------------------------------
WisdomTree Trust Prospectus 9
--------------------------------------------------------------------------------
WisdomTree Earnings Funds
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
WisdomTree Total
Earnings Fund
Fund Facts
--------------------------------------------------------------------------------
Cusip Number:
o 97717W596
Exchange Trading Symbol:
o EXT
--------------------------------------------------------------------------------
WisdomTree Total Earnings Fund
Investment Objective
The Fund seeks to track the price and yield performance, before fees and
expenses, of the WisdomTree Earnings Index. Since the Fund's investment
objective has been adopted as a non-fundamental investment policy, the Fund's
investment objective may be changed without a vote of shareholders.
Primary Investment Strategies
The Fund employs a "passive management" - or indexing - investment approach
designed to track the performance of the WisdomTree Earnings Index. The Fund
attempts to invest all, or substantially all, of its assets in the stocks that
make up the Index. The Fund generally uses a Representative Sampling strategy to
achieve its investment objective.
Index Description
The WisdomTree Earnings Index is a fundamentally weighted index that measures
the performance of earnings-generating companies within the broad U.S. stock
market. The Index consists of companies that: (i) are incorporated in the United
States (including Puerto Rico), (ii) are listed on the New York Stock Exchange,
American Stock Exchange, NASDAQ Global Select Market, or NASDAQ Global Market
("NASDAQ"), (iii) have generated positive earnings on a cumulative basis in
their most recent four fiscal quarters preceding the Index measurement date,
(iv) have a market capitalization of at least $100 million on the Index
measurement date, (v) have an average daily dollar volume of at least $200,000
for each of the six months prior to the Index measurement date, and (vi) have a
price to earnings ratio ("P/E ratio") of at least 2 as of the Index measurement
date. Companies are weighted in the Index based on their earnings over their
most recent four fiscal quarters preceding the Index measurement date. For these
purposes, "earnings" are determined using a company's "Core Earnings." Core
Earnings is a standardized calculation of earnings developed by Standard &
Poor's that is designed to include expenses, incomes and activities that reflect
the actual profitability of a company's ongoing operations. The Index includes
large-capitalization, mid-capitalization and small-capitalization securities and
is, in this sense, an earnings-weighted index for the total U.S. market. As of
June 30, 2008, approximately 75% of the capitalization of the Index consisted of
companies with market capitalizations over $10 billion.
Primary Investment Risks
You can lose money on your investment in the Fund. For information about the
risks of investing in the Fund, see the section herein entitled "Principal Risk
Factors Common to All Funds." In addition, the Fund is subject to the following
potential risk. As with all potential risks, this could decrease the value of
your investment.
10 WisdomTree Trust Prospectus
o Energy Investing. The Fund generally invests a relatively large percentage
of its assets in the energy sector. The energy sector can be significantly
affected by, among other things, economic growth, worldwide demand,
political instability in the Middle East, and volatile oil prices.
Performance Information
Although the Fund commenced operations on February 23, 2007, no performance
information is presented for the Fund because it has been in operation for less
than one full calendar year. After the first full calendar year, a risk/return
chart and table will be provided. Any past performance of the Fund that will be
shown will not be an indication of future results.
Fees and Expenses
The following table describes the fees and expenses you may pay if you buy and
hold shares of the Fund. The fees are expressed as a percentage of the Fund's
average net assets. You may also incur customary brokerage charges when buying
or selling Fund shares.
--------------------------------------------------------------------------------
Shareholder Fees
(fees paid directly from your investment, but see the Creation
Transaction Fees and Redemption Transaction Fees section below) None
--------------------------------------------------------------------------------
Annual Fund Operating Expenses (expenses deducted from Fund assets)
--------------------------------------------------------------------------------
Management Fees 0.28%
--------------------------------------------------------------------------------
Distribution and/or Service (12b-1) Fees None
--------------------------------------------------------------------------------
Other Expenses(a) 0.00%
--------------------------------------------------------------------------------
Total Annual Fund Operating Expenses 0.28%
--------------------------------------------------------------------------------
(a) WisdomTree Asset Management has agreed to pay all operating expenses of
the Fund, except interest expenses and taxes, any brokerage expenses,
future distribution fees or expenses, and extraordinary expenses through
July 31, 2009. WisdomTree Asset Management receives a fee of up to .0044%
in exchange for providing certain non-advisory services to the Fund.
The following example is intended to help retail investors compare the cost of
investing in the Fund with the cost of investing in other funds. It illustrates
the hypothetical expenses that such investors would incur over various periods
if they invest $10,000 in the Fund for the time periods indicated and then
redeemed all of the shares at the end of those periods. This example assumes
that the Fund provides a return of 5% a year and that operating expenses remain
the same. This example does not include the brokerage commission that retail
investors may pay to buy and sell shares of the Fund. Although your actual costs
may be higher or lower, based on these assumptions, your costs would be:
--------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
--------------------------------------------------------------------------------
$29 $90 $157 $356
--------------------------------------------------------------------------------
You would pay the following expenses if you did not redeem your shares:
--------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
--------------------------------------------------------------------------------
$29 $90 $157 $356
--------------------------------------------------------------------------------
WisdomTree Trust Prospectus 11
--------------------------------------------------------------------------------
WisdomTree Earnings Funds
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
WisdomTree Earnings
500 Fund
Fund Facts
--------------------------------------------------------------------------------
Cusip Number:
o 97717W588
Exchange Trading Symbol:
o EPS
--------------------------------------------------------------------------------
WisdomTree Earnings 500 Fund
Investment Objective
The Fund seeks to track the price and yield performance, before fees and
expenses, of the WisdomTree Earnings 500 Index. Since the Fund's investment
objective has been adopted as a non-fundamental investment policy, the Fund's
investment objective may be changed without a vote of shareholders.
Primary Investment Strategies
The Fund employs a "passive management" - or indexing - investment approach
designed to track the performance of the WisdomTree Earnings 500 Index. The Fund
attempts to invest all, or substantially all, of its assets in the stocks that
make up the Index. The Fund generally uses a Representative Sampling strategy to
achieve its investment objective.
Index Description
The WisdomTree Earnings 500 Index is a fundamentally weighted index that
measures the performance of earnings-generating companies within the
large-capitalization segment of the U.S. stock market. The Index consists of the
500 largest companies ranked by market capitalization in the WisdomTree Earnings
Index as of the Index measurement date. Companies are weighted in the Index
based on their earnings over their most recent four fiscal quarters preceding
the Index measurement date. For these purposes, "earnings" are determined using
a company's "Core Earnings." Core Earnings is a standardized calculation of
earnings developed by Standard & Poor's that is designed to include expenses,
incomes and activities that reflect the actual profitability of a company's
ongoing operations. The Index includes primarily large-capitalization
securities. As of June 30, 2008, approximately 88% of the capitalization of the
Index consisted of companies with market capitalizations over $10 billion.
Primary Investment Risks
You can lose money on your investment in the Fund. For information about the
risks of investing in the Fund, see the section herein entitled "Principal Risk
Factors Common to All Funds." In addition, the Fund is subject to the following
potential risk. As with all potential risks, this could decrease the value of
your Fund investment.
o Energy Investing. The Fund generally invests a relatively large percentage
of its assets in the energy sector. The energy sector can be significantly
affected by, among other things: economic growth, worldwide demand,
political instability in the Middle East, and volatile oil prices.
12 WisdomTree Trust Prospectus
Performance Information
Although the Fund commenced operations on February 23, 2007, no performance
information is presented for the Fund because it has been in operation for less
than one full calendar year. After the first full calendar year, a risk/return
chart and table will be provided. Any past performance of the Fund that will be
shown will not be an indication of future results.
Fees and Expenses
The following table describes the fees and expenses you may pay if you buy and
hold shares of the Fund. The fees are expressed as a percentage of the Fund's
average net assets. You may also incur customary brokerage charges when buying
or selling Fund shares.
--------------------------------------------------------------------------------
Shareholder Fees
(fees paid directly from your investment, but see the Creation
Transaction Fees and Redemption Transaction Fees section below) None
--------------------------------------------------------------------------------
Annual Fund Operating Expenses (expenses deducted from Fund assets)
--------------------------------------------------------------------------------
Management Fees 0.28%
--------------------------------------------------------------------------------
Distribution and/or Service (12b-1) Fees None
--------------------------------------------------------------------------------
Other Expenses(a) 0.00%
--------------------------------------------------------------------------------
Total Annual Fund Operating Expenses 0.28%
--------------------------------------------------------------------------------
(a) WisdomTree Asset Management has agreed to pay all operating expenses of
the Fund, except interest expenses and taxes, any brokerage expenses,
future distribution fees or expenses, and extraordinary expenses through
July 31, 2009. WisdomTree Asset Management receives a fee of up to .0044%
in exchange for providing certain non-advisory services to the Fund.
The following example is intended to help retail investors compare the cost of
investing in the Fund with the cost of investing in other funds. It illustrates
the hypothetical expenses that such investors would incur over various periods
if they invest $10,000 in the Fund for the time periods indicated and then
redeemed all of the shares at the end of those periods. This example assumes
that the Fund provides a return of 5% a year and that operating expenses remain
the same. This example does not include the brokerage commission that retail
investors may pay to buy and sell shares of the Fund. Although your actual costs
may be higher or lower, based on these assumptions, your costs would be:
--------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
--------------------------------------------------------------------------------
$29 $90 $157 $356
--------------------------------------------------------------------------------
You would pay the following expenses if you did not redeem your shares:
--------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
--------------------------------------------------------------------------------
$29 $90 $157 $356
--------------------------------------------------------------------------------
WisdomTree Trust Prospectus 13
--------------------------------------------------------------------------------
WisdomTree Earnings Funds
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
WisdomTree MidCap
Earnings Fund
Fund Facts
--------------------------------------------------------------------------------
Cusip Number:
o 97717W570
Exchange Trading Symbol:
o EZM
--------------------------------------------------------------------------------
WisdomTree MidCap Earnings Fund
Investment Objective
The Fund seeks to track the price and yield performance, before fees and
expenses, of the WisdomTree MidCap Earnings Index. Since the Fund's investment
objective has been adopted as a non-fundamental investment policy, the Fund's
investment objective may be changed without a vote of shareholders.
Primary Investment Strategies
The Fund employs a "passive management" - or indexing - investment approach
designed to track the performance of the WisdomTree MidCap Earnings Index. The
Fund attempts to invest all, or substantially all, of its assets in the stocks
that make up the Index. The Fund generally uses a Representative Sampling
strategy to achieve its investment objective.
Index Description
The WisdomTree MidCap Earnings Index is a fundamentally weighted index that
measures the performance of earnings-generating companies within the
mid-capitalization segment of the U.S. stock market. The Index is created by
first removing the 500 companies with the highest market capitalizations as of
the Index measurement date from the WisdomTree Earnings Index. Those companies
that comprise the top 75% of the remaining market capitalization of the
WisdomTree Earnings Index are included in the WisdomTree MidCap Earnings Index.
Companies are weighted in the Index based on their earnings over their most
recent four fiscal quarters preceding the Index measurement date. For these
purposes, "earnings" are determined using a company's "Core Earnings." Core
Earnings is a standardized calculation of earnings developed by Standard &
Poor's that is designed to include expenses, income and activities that reflect
the actual profitability of a company's ongoing operations. The Index includes
primarily mid-capitalization securities. As of June 30, 2008, approximately 65%
of the capitalization of the Index consisted of companies with market
capitalizations between $2 billion and $10 billion.
Primary Investment Risks
You can lose money on your investment in the Fund. For information about the
risks of investing in the Fund, see the section herein entitled "Principal Risk
Factors Common to All Funds." In addition, the Fund is subject to the following
potential risks. As with all potential risks, this could decrease the value of
your Fund investment.
o Small- and Mid-Capitalization Investing. The Fund invests primarily in
securities of small- and mid-capitalization companies. As a result, the
Fund may be more volatile than funds that invest in larger, more
established companies. The securities of small- and mid-capitalization
companies generally trade in lower volumes and are subject to greater and
more unpredictable price changes than larger
14 WisdomTree Trust Prospectus
capitalization stocks or the stock market as a whole. Small- and
mid-capitalization companies may be particularly sensitive to changes in
interest rates, borrowing costs and earnings.
o Consumer Discretionary Investing. The Fund generally invests a relatively
large percentage of its assets in the consumer discretionary sector. This
sector consists of, for example, automobile, media and retail companies.
The consumer discretionary sector of the economy can be significantly
affected by, among other things, economic growth, worldwide demand and
consumers' disposable income levels and propensity to spend.
o Industrial Investing. The Fund generally invests a relatively large
percentage of its assets in the industrial sector. The industrial sector
can be significantly affected by, among other things: economic growth,
supply and demand for specific products and services, rapid technological
prices, and government regulation.
Performance Information
Although the Fund commenced operations on February 23, 2007, no performance
information is presented for the Fund because it has been in operation for less
than one full calendar year. After the first full calendar year, a risk/return
chart and table will be provided. Any past performance of the Fund that will be
shown will not be an indication of future results.
Fees and Expenses
The following table describes the fees and expenses you may pay if you buy and
hold shares of the Fund. The fees are expressed as a percentage of the Fund's
average net assets. You may also incur customary brokerage charges when buying
or selling Fund shares.
--------------------------------------------------------------------------------
Shareholder Fees
(fees paid directly from your investment, but see the Creation
Transaction Fees and Redemption Transaction Fees section below) None
--------------------------------------------------------------------------------
Annual Fund Operating Expenses (expenses deducted from Fund assets)
--------------------------------------------------------------------------------
Management Fees 0.38%
--------------------------------------------------------------------------------
Distribution and/or Service (12b-1) Fees None
--------------------------------------------------------------------------------
Other Expenses(a) 0.00%
--------------------------------------------------------------------------------
Total Annual Fund Operating Expenses 0.38%
--------------------------------------------------------------------------------
(a) WisdomTree Asset Management has agreed to pay all operating expenses of
the Fund, except interest expenses and taxes, any brokerage expenses,
future distribution fees or expenses, and extraordinary expenses through
July 31, 2009. WisdomTree Asset Management receives a fee of up to .0044%
in exchange for providing certain non-advisory services to the Fund.
The following example is intended to help retail investors compare the cost of
investing in the Fund with the cost of investing in other funds. It illustrates
the hypothetical expenses that such investors would incur over various periods
if they invest $10,000 in the Fund for the time periods indicated and then
redeemed all of the shares at the end of those periods. This example assumes
that the Fund provides a return of 5% a year and that operating expenses remain
the same. This example does not include the brokerage commission that retail
investors may pay to buy and sell shares of the Fund. Although your actual costs
may be higher or lower, based on these assumptions, your costs would be:
--------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
--------------------------------------------------------------------------------
$39 $122 $213 $480
--------------------------------------------------------------------------------
You would pay the following expenses if you did not redeem your shares:
--------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
--------------------------------------------------------------------------------
$39 $122 $213 $480
--------------------------------------------------------------------------------
WisdomTree Trust Prospectus 15
--------------------------------------------------------------------------------
WisdomTree Earnings Funds
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
WisdomTree SmallCap
Earnings Fund
Fund Facts
--------------------------------------------------------------------------------
Cusip Number:
o 97717W562
Exchange Trading Symbol:
o EES
--------------------------------------------------------------------------------
WisdomTree SmallCap Earnings Fund
Investment Objective
The Fund seeks to track the price and yield performance, before fees and
expenses, of the WisdomTree SmallCap Earnings Index. Since the Fund's investment
objective has been adopted as a non-fundamental investment policy, the Fund's
investment objective may be changed without a vote of shareholders.
Primary Investment Strategies
The Fund employs a "passive management" - or indexing - investment approach
designed to track the performance of the WisdomTree SmallCap Earnings Index. The
Fund attempts to invest all, or substantially all, of its assets in the stocks
that make up the Index. The Fund generally uses a Representative Sampling
strategy to achieve its investment objective.
Index Description
The WisdomTree SmallCap Earnings Index is a fundamentally weighted index that
measures the performance of earnings-generating companies within the
small-capitalization segment of the U.S. stock market. The Index is created by
first removing the 500 companies with the highest market capitalizations as of
the Index measurement date from the WisdomTree Earnings Index. Those companies
that comprise the bottom 25% of the remaining market capitalization of the
WisdomTree Earnings Index are included in the WisdomTree SmallCap Earnings
Index. Companies are weighted in the Index based on their earnings over their
most recent four fiscal quarters preceding the Index measurement date. For these
purposes, "earnings" are determined using a company's "Core Earnings." Core
Earnings is a standardized calculation of earnings developed by Standard &
Poor's that is designed to include expenses, incomes and activities that reflect
the actual profitability of a company's ongoing operations. The Index includes
primarily small-capitalization securities. As of June 30, 2008, approximately
99% of the capitalization of the Index consisted of companies with market
capitalizations less than $2 billion.
Primary Investment Risks
You can lose money on your investment in the Fund. For information about the
risks of investing in the Fund, see the section herein entitled "Principal Risk
Factors Common to All Funds." In addition, the Fund is subject to the following
potential risks. As with all potential risks, this could decrease the value of
your Fund investment.
o Small-Capitalization Investing. The Fund invests primarily in securities
of small-capitalization companies. As a result, the Fund may be more
volatile than funds that invest in larger, more established companies. The
securities of small-capitalization companies generally trade in lower
volumes and are subject to greater and more unpredictable price changes
than larger capitalization stocks or the stock market as a whole.
Small-capitalization companies may be particularly sensitive to changes in
interest rates, borrowing costs and earnings.
16 WisdomTree Trust Prospectus
o Industrial Investing. The Fund generally invests a relatively large
percentage of its assets in the industrial sector. The industrial sector
can be significantly affected by, among other things: economic growth,
supply and demand for specific products and services, rapid technological
prices, and government regulation.
o Consumer Discretionary Investing. The Fund generally invests a relatively
large percentage of its assets in the consumer discretionary sector. The
consumer discretionary sector includes, for example, automobile, retail
and media companies. The consumer discretionary sector can be
significantly affected by, among other things, economic growth, worldwide
demand and consumers' disposable income levels and propensity to spend.
Performance Information
Although the Fund commenced operations on February 23, 2007, no performance
information is presented for the Fund because it has been in operation for less
than one full calendar year. After the first full calendar year, a risk/return
chart and table will be provided. Any past performance of the Fund that will be
shown will not be an indication of future results.
Fees and Expenses
The following table describes the fees and expenses you may pay if you buy and
hold shares of the Fund. The fees are expressed as a percentage of the Fund's
average net assets. You may also incur customary brokerage charges when buying
or selling Fund shares.
---------------------------------------------------------------------------------------
Shareholder Fees None
(fees paid directly from your investment, but see the Creation Transaction Fees
and Redemption Transaction Fees section below)
---------------------------------------------------------------------------------------
Annual Fund Operating Expenses (expenses deducted from Fund assets)
---------------------------------------------------------------------------------------
Management Fees 0.38%
---------------------------------------------------------------------------------------
Distribution and/or Service (12b-1) Fees None
---------------------------------------------------------------------------------------
Other Expenses(a) 0.00%
---------------------------------------------------------------------------------------
Total Annual Fund Operating Expenses 0.38%
---------------------------------------------------------------------------------------
(a) WisdomTree Asset Management has agreed to pay all operating expenses of
the Fund, except interest expenses and taxes, any brokerage expenses,
future distribution fees or expenses, and extraordinary expenses through
July 31, 2009. WisdomTree Asset Management receives a fee of up to .0044%
in exchange for providing certain non-advisory services to the Fund.
The following example is intended to help retail investors compare the cost of
investing in the Fund with the cost of investing in other funds. It illustrates
the hypothetical expenses that such investors would incur over various periods
if they invest $10,000 in the Fund for the time periods indicated and then
redeemed all of the shares at the end of those periods. This example assumes
that the Fund provides a return of 5% a year and that operating expenses remain
the same. This example does not include the brokerage commission that retail
investors may pay to buy and sell shares of the Fund. Although your actual costs
may be higher or lower, based on these assumptions, your costs would be:
--------------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
--------------------------------------------------------------------------------------
$39 $122 $213 $480
--------------------------------------------------------------------------------------
You would pay the following expenses if you did not redeem your shares:
--------------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
--------------------------------------------------------------------------------------
$39 $122 $213 $480
--------------------------------------------------------------------------------------
WisdomTree Trust Prospectus 17
--------------------------------------------------------------------------------
WisdomTree Earnings Funds
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
WisdomTree Earnings
Top 100 Fund
Fund Facts
--------------------------------------------------------------------------------
Cusip Number:
o 97717W554
Exchange Trading Symbol:
o EEZ
--------------------------------------------------------------------------------
WisdomTree Earnings Top 100 Fund
Investment Objective
The Fund seeks to track the price and yield performance, before fees and
expenses, of the WisdomTree Earnings Top 100 Index. Since the Fund's investment
objective has been adopted as a non-fundamental investment policy, the Fund's
investment objective may be changed without a vote of shareholders.
Primary Investment Strategies
The Fund employs a "passive management" - or indexing - investment approach
designed to track the performance of the WisdomTree Earnings Top 100 Index. The
Fund attempts to invest all, or substantially all, of its assets in the stocks
that make up the Index. The Fund generally uses a Representative Sampling
strategy to achieve its investment objective.
Index Description
The WisdomTree Earnings Top 100 Index is a fundamentally weighted index that
measures the performance of 100 large-cap companies with relatively high
earnings yields. The Index is created by selecting the 100 companies with the
highest earnings yields from the 300 largest companies within the WisdomTree
Earnings 500 Index as of the Index measurement date. Unlike the other Earnings
Indexes, which weight companies based on aggregate earnings, the Earnings Top
100 Index is weighted by earnings yield. A component company's weight in the
Index at the Index measurement date is determined by its earnings yield.
Earnings yield is calculated by dividing a company's trailing 12 months earnings
by its market capitalization. This amount is then divided by the sum of all
earnings yields for all the component companies in the Index. For these
purposes, "earnings" are determined using a company's "Core Earnings." Core
Earnings is a standardized calculation of earnings developed by Standard &
Poor's that is designed to include expenses, incomes and activities that reflect
the actual profitability of a company's ongoing operations. The Index includes
primarily large-capitalization securities. As of June 30, 2008, approximately
86% of the capitalization of the Index consisted of companies with market
capitalizations over $10 billion.
Primary Investment Risks
You can lose money on your investment in the Fund. For information about the
risks of investing in the Fund, see the section herein entitled "Principal Risk
Factors Common to All Funds." In addition, the Fund is subject to the following
potential risk. As with all potential risks, this could decrease the value of
your investment.
o Energy Investing. The Fund generally invests a relatively large percentage
of its assets in the energy sector. The energy sector can be significantly
affected by, among other things, economic growth, worldwide demand,
political instability in the Middle East, and volatile oil prices.
18 WisdomTree Trust Prospectus
Performance Information
Although the Fund commenced operations on February 23, 2007, no performance
information is presented for the Fund because it has been in operation for less
than one full calendar year. After the first full calendar year, a risk/return
chart and table will be provided. Any past performance of the Fund that will be
shown will not be an indication of future results.
Fees and Expenses
The following table describes the fees and expenses you may pay if you buy and
hold shares of the Fund. The fees are expressed as a percentage of the Fund's
average net assets. You may also incur customary brokerage charges when buying
or selling Fund shares.
---------------------------------------------------------------------------------------
Shareholder Fees None
(fees paid directly from your investment, but see the Creation
Transaction Fees and Redemption Transaction Fees section below)
---------------------------------------------------------------------------------------
Annual Fund Operating Expenses (expenses deducted from Fund assets)
---------------------------------------------------------------------------------------
Management Fees 0.38%
---------------------------------------------------------------------------------------
Distribution and/or Service (12b-1) Fees None
---------------------------------------------------------------------------------------
Other Expenses(a) 0.00%
---------------------------------------------------------------------------------------
Total Annual Fund Operating Expenses 0.38%
---------------------------------------------------------------------------------------
(a) WisdomTree Asset Management has agreed to pay all operating expenses of
the Fund, except interest expenses and taxes, any brokerage expenses,
future distribution fees or expenses, and extraordinary expenses through
July 31, 2009. WisdomTree Asset Management receives a fee of up to .0044%
in exchange for providing certain non-advisory services to the Fund.
The following example is intended to help retail investors compare the cost of
investing in the Fund with the cost of investing in other funds. It illustrates
the hypothetical expenses that such investors would incur over various periods
if they invest $10,000 in the Fund for the time periods indicated and then
redeemed all of the shares at the end of those periods. This example assumes
that the Fund provides a return of 5% a year and that operating expenses remain
the same. This example does not include the brokerage commission that retail
investors may pay to buy and sell shares of the Fund. Although your actual costs
may be higher or lower, based on these assumptions, your costs would be:
--------------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
--------------------------------------------------------------------------------------
$39 $122 $213 $480
--------------------------------------------------------------------------------------
You would pay the following expenses if you did not redeem your shares:
--------------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
--------------------------------------------------------------------------------------
$39 $122 $213 $480
--------------------------------------------------------------------------------------
WisdomTree Trust Prospectus 19
--------------------------------------------------------------------------------
WisdomTree Earnings Funds
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
WisdomTree
Low P/E Fund
Fund Facts
--------------------------------------------------------------------------------
Cusip Number:
o 97717W547
Exchange Trading Symbol:
o EZY
--------------------------------------------------------------------------------
WisdomTree Low P/E Fund
Investment Objective
The Fund seeks to track the price and yield performance, before fees and
expenses, of the WisdomTree Low P/E Index. Since the Fund's investment objective
has been adopted as a non-fundamental investment policy, the Fund's investment
objective may be changed without a vote of shareholders.
Primary Investment Strategies
The Fund employs a "passive management" - or indexing - investment approach
designed to track the performance of the WisdomTree Low P/E Index. The Fund
attempts to invest all, or substantially all, of its assets in the stocks that
make up the Index. The Fund generally uses a Representative Sampling strategy to
achieve its investment objective.
Index Description
The WisdomTree Low P/E Index is a fundamentally weighted index that measures the
performance of companies with the lowest price to earnings, or "P/E", ratios
within the WisdomTree Earnings Index. The starting point for the calculation of
the WisdomTree Low P/E Index is the WisdomTree Earnings Index. Companies in the
Earnings Index with market capitalizations of at least $200 million as of the
Index measurement date are ranked by their respective P/E ratios. Those
companies with the lowest P/E ratios are ranked highest. The top 30% of these
companies are included in the low P/E Index. Companies are weighted in the Index
based on their earnings over their most recent four fiscal quarters preceding
the Index measurement date. For these purposes, "earnings" are determined using
a company's "Core Earnings." Core Earnings is a standardized calculation of
earnings developed by Standard & Poor's that is designed to include expenses,
incomes and activities that reflect the actual profitability of a company's
ongoing operations. The Index includes primarily large-capitalization
securities. As of June 30, 2008, approximately 73% of the Index consisted of
companies with market capitalizations over $10 billion.
Primary Investment Risks
You can lose money on your investment in the Fund. For information about the
risks of investing in the Fund, see the section herein entitled "Principal Risk
Factors Common to All Funds." In addition, the Fund is subject to the following
potential risk. As with all potential risks, this could decrease the value of
your Fund investment.
20 WisdomTree Trust Prospectus
o Energy Investing. The Fund generally invests a relatively large percentage
of its assets in the Energy sector. Energy sector risks include but are
not limited to: slowdowns in economic growth, worldwide demand, political
instability in the Middle East, and volatile oil prices.
Performance Information
Although the Fund commenced operations on February 23, 2007, no performance
information is presented for the Fund because it has been in operation for less
than one full calendar year. After the first full calendar year, a risk/return
chart and table will be provided. Any past performance of the Fund that will be
shown will not be an indication of future results.
Fees and Expenses
The following table describes the fees and expenses you may pay if you buy and
hold shares of the Fund. The fees are expressed as a percentage of the Fund's
average net assets. You may also incur customary brokerage charges when buying
or selling Fund shares.
---------------------------------------------------------------------------------------
Shareholder Fees None
(fees paid directly from your investment, but see the Creation
Transaction Fees and Redemption Transaction Fees section below)
---------------------------------------------------------------------------------------
Annual Fund Operating Expenses (expenses deducted from Fund assets)
---------------------------------------------------------------------------------------
Management Fees 0.38%
---------------------------------------------------------------------------------------
Distribution and/or Service (12b-1) Fees None
---------------------------------------------------------------------------------------
Other Expenses(a) 0.00%
---------------------------------------------------------------------------------------
Total Annual Fund Operating Expenses 0.38%
---------------------------------------------------------------------------------------
(a) WisdomTree Asset Management has agreed to pay all operating expenses of
the Fund, except interest expenses and taxes, any brokerage expenses,
future distribution fees or expenses, and extraordinary expenses through
July 31, 2009. WisdomTree Asset Management receives a fee of up to .0044%
in exchange for providing certain non-advisory services to the Fund.
The following example is intended to help retail investors compare the cost of
investing in the Fund with the cost of investing in other funds. It illustrates
the hypothetical expenses that such investors would incur over various periods
if they invest $10,000 in the Fund for the time periods indicated and then
redeemed all of the shares at the end of those periods. This example assumes
that the Fund provides a return of 5% a year and that operating expenses remain
the same. This example does not include the brokerage commission that retail
investors may pay to buy and sell shares of the Fund. Although your actual costs
may be higher or lower, based on these assumptions, your costs would be:
--------------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
--------------------------------------------------------------------------------------
$39 $122 $213 $480
--------------------------------------------------------------------------------------
You would pay the following expenses if you did not redeem your shares:
--------------------------------------------------------------------------------------
1 Year 3 Years 5 Years 10 Years
--------------------------------------------------------------------------------------
$39 $122 $213 $480
--------------------------------------------------------------------------------------
WisdomTree Trust Prospectus 21
Management
Investment Adviser
As investment adviser, WisdomTree Asset Management has overall responsibility
for the general management and administration of the Trust. WisdomTree Asset
Management provides an investment program for each Fund. WisdomTree Asset
Management also arranges for sub-advisory, transfer agency, custody, fund
administration, and all other non-distribution related services necessary for
the Funds to operate.
Under the Investment Advisory Agreement for each Fund (other than the India
Earnings Fund), WisdomTree Asset Management agrees to pay all expenses of the
Trust, except compensation and expenses of the Independent Trustees, counsel to
the Independent Trustees and the Trust's Chief Compliance Officer, interest
expenses and taxes, brokerage expenses, and other expenses connected with the
execution of portfolio transactions, any distribution fees or expenses, legal
fees or expenses and extraordinary expenses. Pursuant to a separate contractual
arrangement, WisdomTree Asset Management arranges for the provision of chief
compliance officer ("CCO") services with respect to each Fund (other than the
India Earnings Fund), and is liable and responsible for, and administers,
payments to the CCO, the Independent Trustees and counsel to the Independent
Trustees.
The basis for the Board of Trustees' approval of the Investment Advisory
Agreements is available in the Trust's Annual Report to Shareholders for the
period ended March 31, 2008.
WisdomTree Asset Management expects to receive fees from each 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 India Earnings Fund 0.68%
--------------------------------------------------------------------------------
WisdomTree Total Earnings Fund 0.28%
--------------------------------------------------------------------------------
WisdomTree Earnings 500 Fund 0.28%
--------------------------------------------------------------------------------
WisdomTree MidCap Earnings Fund 0.38%
--------------------------------------------------------------------------------
WisdomTree SmallCap Earnings Fund 0.38%
--------------------------------------------------------------------------------
WisdomTree Earnings Top 100 Fund 0.38%
--------------------------------------------------------------------------------
WisdomTree Low P/E Fund 0.38%
--------------------------------------------------------------------------------
WisdomTree Asset Management is a registered investment adviser with offices
located at 380 Madison Avenue, 21st Floor, New York, NY 10017 and is a leader in
ETF management.
Sub-Adviser
Mellon Capital Management Corporation ("Mellon Capital") serves as sub-adviser
to the Funds. Mellon Capital, a registered investment adviser, is a leading
innovator in the investment industry and manages global quantitative-based
investment strategies for institutional and private investors. Its principal
office is located at 50 Fremont Street, San Francisco, CA 94105. As of June 30,
2008, Mellon Capital had assets under management totaling approximately $204
billion. Mellon Capital is a wholly-owned indirect subsidiary of The Bank of New
York Mellon Corporation, a publicly traded financial holding company. Mellon
Capital chooses each Fund's portfolio investments and places orders to buy and
sell the Funds' portfolio investments. BNY Investment Advisors ("BNYIA")
previously served as sub-adviser to the Funds. In connection with the recent
merger between The Bank of New York Company, Inc. and Mellon Financial
Corporation BNYIA was integrated with its affiliate, Mellon Capital. As part of
22 WisdomTree Trust Prospectus
the integration, BNYIA transferred, and Mellon Capital assumed full
responsibility of, the Sub-Advisory Agreement between BNYIA and WisdomTree Asset
Management effective July 2008. WisdomTree Asset Management pays Mellon Capital
for providing sub-advisory services to the Funds in accordance with the table
set forth below.
The Sub-Adviser is entitled to receive the fees indicated below for acting as
Sub-Adviser to the Domestic Funds:
o 3 basis points (0.03%) of the first $2 billion in combined daily net
assets of all Domestic Funds;
o 2 basis points (0.02%) of the next $3 billion in combined daily net
assets of all Domestic Funds; and
o 1.5 basis points (0.015%) of the combined daily net assets of all
Domestic Funds in excess of $5 billion.
The Sub-Adviser is entitled to receive the fees indicated below for acting as
Sub-Adviser to the International Funds:
o 7.5 basis points (0.075%) of the first $1 billion in combined daily
net assets of all International Equity Funds;
o 5 basis points (0.05%) of the next $1 billion in combined daily net
assets of all International Equity Funds;
o 3 basis points (0.03%) of the next $3 billion in combined daily net
assets of all International Equity Funds; and
o 2 basis points (0.02%) of the combined daily net assets of all
International Equity Funds in excess of $5 billion.
Portfolio Managers
Each Fund is managed by Mellon Capital's Equity Index Strategies Portfolio
management team. The individual members of the team responsible for the
day-to-day management of the Funds' portfolios are listed below.
Denise Krisko is a Managing Director, Co-Head of the Equity Index Management and
Head of East Coast Equity Index Strategies for Mellon Capital. She was also a
Managing Director of The Bank of New York and Head of Equity Index Strategies
for BNY Investment Advisors since August of 2005. Prior to joining The Bank of
New York, from 2000 to 2004, Ms. Krisko held various senior investment positions
with Deutsche Asset Management and Northern Trust, including quantitative
strategies director, senior portfolio manager and trader. Ms. Krisko has over 15
years of investment experience.
Steven Wetter is a Vice President, Senior Portfolio Manager of Equity Index
Strategies. He obtained his M.B.A. from New York University, Stern School of
Business. Prior to joining The Bank of New York, he worked as portfolio manager
and trader at Bankers Trust and continued in that role after the division was
sold to Deutsche Bank in 1999 and then to Northern Trust in 2003. Mr. Wetter has
20 years of investment experience.
The Trust's Statement of Additional Information ("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 Funds for which they are Portfolio Managers.
Portfolio Holdings Information
Information about each Fund's daily portfolio holdings is available at
www.wisdomtree.com. In addition, each Fund discloses its complete portfolio
holdings as of the end of its fiscal year (March 31) and its second fiscal
quarter (September 30) in its reports to shareholders. Each Fund files its
complete portfolio holdings as of the end of its first and third fiscal quarters
(June 30 and December 31, respectively) with the SEC on Form N-Q no later than
60 days after the relevant fiscal period. You can find the SEC filings on the
SEC's website, www.sec.gov. A summarized description of the Funds' policies and
procedures with respect to the disclosure of each Fund's portfolio holdings is
available in the Trust's SAI.
WisdomTree Trust Prospectus 23
Buying and Selling Shares
Most investors will buy and sell shares of the Funds through brokers. Shares of
the Funds trade on national securities exchanges 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.
Shares of the Funds trade under the trading symbols listed for each respective
Fund in the section describing such Fund.
Shares of the Funds may be acquired or redeemed directly from a Fund only in
Creation Units or multiples thereof, as discussed in the Creation and Redemption
section. Once created, shares of the Funds trade in the secondary market in
amounts less than a Creation Unit.
Share Trading Prices
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.
The approximate value of shares of each Fund is disseminated every fifteen
seconds throughout the trading day by the national securities exchange on which
such Fund is listed or by other information providers. This approximate value
should not be viewed as a "real-time" update of the NAV, because the approximate
value may not be calculated in the same manner as the NAV, which is computed
once per day. The approximate value generally is determined by using current
market quotations and/or price quotations obtained from broker-dealers that may
trade in the portfolio securities held by the Funds. The Funds are not involved
in, or responsible for, the calculation or dissemination of the approximate
value and make no warranty as to its accuracy.
Determination of Net Asset Value
The NAV of each Fund's shares is calculated each day the national securities
exchanges are open for trading as of the close of regular trading on the New
York Stock Exchange, generally 4:00 p.m. New York time (the "NAV Calculation
Time"). NAV per share is calculated by dividing a Fund's net assets by the
number of Fund shares outstanding.
Stocks held by a Fund are valued at their market value when reliable market
quotations are readily available. Certain short-term debt instruments, which may
be used to manage a Fund's cash, are valued on the basis of amortized cost. The
values of any foreign securities held by a Fund are converted into U.S. dollars
using an exchange rate deemed appropriate by the Fund.
When reliable market quotations are not readily available, securities are priced
at their fair value, which is the price a security's owner might reasonably
expect to receive upon its sale. A Fund may also use fair-value pricing if the
value of a security it holds has been materially affected by events occurring
before the Fund's pricing time but after the close of the primary markets or
exchanges on which the security is traded. For example, this may occur with
foreign securities, which may trade on foreign exchanges that close many hours
before the Fund's pricing time. Intervening events might be company-specific
(e.g., earnings report, merger announcement), country-specific (e.g., natural
disaster, economic or political news, act of terrorism, interest rate change),
or global. Intervening events may include price movements in U.S. markets that
are deemed to affect the value of foreign securities. Fair-value pricing also
may be used if, for example, trading in a security is halted and does not resume
before the Fund's pricing time or if a security does not trade in the course of
a day. Since the WisdomTree India Earnings Fund invests in securities listed on
foreign exchanges that trade on weekends or other days when the Fund does not
price its shares, the NAV of this Fund may change on days when shareholders will
not be able to purchase or redeem the Fund's shares. Fair-value prices are
determined by the Funds according to procedures adopted by the Board of
Trustees. When fair-value pricing is employed, the prices of securities used by
a Fund to calculate its NAV may differ from quoted or published prices for the
same securities.
Transactions in Fund shares will be priced at NAV only if you purchase or redeem
shares directly from a Fund in Creation Units. Fund shares are purchased or sold
on a national securities exchange at market prices, which may be higher or lower
than NAV.
24 WisdomTree Trust Prospectus
Dividends and Distributions
Each Fund pays out dividends, if any, to investors at least annually. Each Fund
distributes its net realized capital gains, if any, to investors annually. The
Funds 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.
Book Entry
Shares of the Funds 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 each Fund.
Investors owning shares of the Funds are beneficial owners as shown on the
records of DTC or its participants. DTC serves as the securities depository for
all shares of the Funds. 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.
Delivery of Shareholder Documents - Householding
Householding is an option available to certain investors of the Funds.
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 Funds 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 Funds have adopted policies and procedures with respect to frequent
purchases and redemptions of Creation Units of Fund shares. Since the Funds are
ETFs, only a few institutional investors (known as "Authorized Participants")
are authorized to purchase and redeem shares directly with the Funds. Because
purchase and redemption transactions with Authorized Participants are an
essential part of the ETF process and help keep ETF trading prices in line with
NAV, each Fund accommodates frequent purchases and redemptions by Authorized
Participants. Frequent purchases and redemptions for cash may increase index
tracking error and portfolio transaction costs and may lead to realization of
capital gains. Frequent in-kind creations and redemptions do not give rise to
these concerns. Each Fund reserves the right, to reject any purchase order at
any time. Each Fund reserves the right to impose restrictions on disruptive,
excessive, or short-term trading and may reject purchase or redemption orders in
such instances.
Investments by Registered Investment Companies
Section 12(d)(1) of the Investment Company Act of 1940 restricts investments by
registered investment companies in the securities of other investment companies,
including shares of each Fund. Registered investment companies are permitted to
invest in the Funds beyond the limits set forth in section 12(d)(1), subject to
certain terms and conditions set forth in an SEC exemptive order issued to the
WisdomTree Trust, including that such investment companies enter into an
agreement with the Funds.
WisdomTree Trust Prospectus 25
Taxes
The following discussion is a summary of some important U.S. federal income tax
considerations generally applicable to investments in the Funds. Your investment
in a 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.
Each Fund intends to qualify each year as a regulated investment company. A
regulated investment company is not subject to tax at the fund level on income
and gains from investments that are timely distributed to shareholders. However,
a Fund's failure to qualify as a regulated investment company would result in
fund-level taxation, and consequently, a reduction in income available for
distribution to shareholders.
Unless your investment in shares is made through a tax-exempt entity or
tax-deferred retirement account, such as an individual retirement account, you
need to be aware of the possible tax consequences when:
o A Fund makes distributions,
o You sell shares, and
o You purchase or redeem Creation Units (for institutional investors
only)
Taxes on Distributions
For federal income tax purposes, distributions of investment income are
generally taxable as ordinary income. Taxes on distributions of capital gains
(if any) are determined by how long a Fund owned the investments that generated
them, rather than how long you have owned your Fund shares. Distributions of net
capital gains (the excess of net long-term capital gains from the sale of
investments that a Fund owned for more than one year over net short-term capital
losses) that are properly designated by the Fund as capital gain dividends
("Capital Gain Dividends") will be taxable as long-term capital gains. Long-term
capital gain rates have been temporarily reduced - in general, to 15%, with
lower rates applying to taxpayers in the 10% and 15% rate brackets - for taxable
years beginning before January 1, 2011. Distributions of gains from the sale of
investments that a Fund owned for one year or less will be taxable as ordinary
income.
For taxable years beginning before January 1, 2011, distributions of investment
income designated by a Fund as derived from "qualified dividend income" are
taxed to individuals at rates applicable to long-term capital gain, provided
holding period and other requirements are met at both the shareholder and the
Fund level.
In general, your distributions are subject to federal income tax for the year in
which they are paid. Certain distributions paid in January, however, may be
treated as paid on December 31 of the prior year. Distributions are taxable even
if they are paid from income or gains earned by a Fund before your investment
(and thus were included in the price you paid for your shares).
Dividends, interest and gains received by a Fund with respect to foreign
securities may be subject to withholding and other taxes imposed by foreign
countries, which may reduce amounts available for distribution to you and
returns to you from a Fund. Tax conventions between certain countries and the
United States may, in some cases, reduce or eliminate such taxes. Because more
than 50% of the total assets of the WisdomTree India Earnings Fund will consist
of foreign stocks or securities, the Wisdom Tree India Earnings Fund intends to
"pass through" to you certain foreign income taxes (including withholding taxes)
paid by the Fund. This means that you will be considered to have received as an
additional dividend your share of such foreign taxes, but you may be entitled to
either a corresponding tax deduction or a credit in calculating your federal
income tax.
If you are neither a resident nor a citizen of the United States or if you are a
foreign entity, dividends (other than Capital Gain Dividends) paid to you by the
Funds will generally be subject to a 30% U.S. withholding tax, unless a lower
treaty rate applies.
26 WisdomTree Trust Prospectus
The Funds (or financial intermediaries, such as brokers, through which a
shareholder owns Fund shares) generally are required to withhold and 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.
Taxes When Fund Shares are Sold
Any capital gain or loss realized upon a sale of Fund shares is generally
treated as a long-term gain or loss if the shares have been held 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
long-term capital loss to the extent that capital gain dividends were paid with
respect to such shares. The ability to deduct capital losses may be limited.
Taxes on Creation and Redemption of Creation Units
An Authorized Participant who exchanges securities for Creation Units generally
will recognize a gain or a loss equal to the difference between the market value
of the Creation Units at the time of the exchange and the sum of the exchanger's
aggregate basis in the securities surrendered and the cash component paid. 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 market value of the securities and the amount of cash
received for such Creation Units. The Internal Revenue Service, however, may
assert that a loss realized upon an exchange of securities for Creation Units
cannot be deducted currently under the rules governing "wash sales," or on the
basis that there has been no significant change in economic position. Persons
exchanging securities for Creation Units should consult a tax advisor with
respect to whether the wash sale rules apply and when a loss might be
deductible.
Any capital gain or loss realized upon a redemption (or creation) of Creation
Units is generally treated as long-term capital gain or loss if the Fund shares
(or securities surrendered) have been held for more than one year and as
short-term capital gain or loss if the shares (or securities surrendered) have
been held for one year or less.
If you purchase or redeem Creation Units, you will be sent a confirmation
statement showing how many shares you purchased or sold and at what price.
Persons purchasing or redeeming Creation Units should consult their own tax
advisors with respect to the tax treatment of any creation or redemption
transaction.
Taxes on WisdomTree India Earnings Fund
The WisdomTree India Earnings Fund operates through the WisdomTree India
Investment Portfolio, Inc., a wholly-owned subsidiary in the Republic of
Mauritius, in order to take advantage of favorable tax treatment by the Indian
government pursuant to a taxation treaty between India and Mauritius. The
Portfolio is advised by WisdomTree Asset Management, and is sub-advised by
Mellon Capital. The Supreme Court of India upheld the validity of this tax
treaty in response to a lower court challenge contesting the treaty's
applicability to entities such as WisdomTree India Earnings Fund. No assurance
can be given that the terms of the Treaty will not be subject to re-negotiation
in the future or subject to a different interpretation. Any change in the
provision of this treaty or in its applicability to WisdomTree India Earnings
Fund could result in the imposition of withholding and other taxes on the Fund
by tax authorities in India. This would reduce the return to the Fund on its
investments and the return received by WisdomTree India Earnings Fund
shareholders.
WisdomTree Trust Prospectus 27
Creation and Redemption
The shares that trade in the secondary market are "created" at NAV. Each Fund
issues and redeems shares only in large blocks of shares, typically 50,000
shares or more ("Creation Units"). Only institutional investors who have entered
into an authorized participant agreement purchase or redeem Creation Units.
Creation Units generally are issued and redeemed in exchange for a specified
basket of securities approximating the holdings of a Fund and a designated
amount of cash. Each business day prior to the opening of trading each Fund
publishes the specific securities and designated amount of cash included in that
day's basket for the Fund through the National Securities Clearing Corporation
("NSCC") or other method of public dissemination. Each Fund reserves the right
to accept or pay out a basket of securities or cash that differs from the
published basket. The India Earnings Fund intends to issue and redeem Creation
Units solely for cash. The prices at which creations and redemptions occur are
based on the next calculation of NAV after an order is received in proper form.
Creations and redemptions must be made by an Authorized Participant or through a
firm that is either a member of the Continuous Net Settlement System of the NSCC
or a DTC participant, and in each case, must have executed an agreement with the
Distributor with respect to creations and redemptions of Creation Unit
aggregations. Information about the procedures regarding creation and redemption
of Creation Units is included in the Trust's SAI.
Authorized Participants and the Continuous Offering of Shares
Because new shares may be created and issued on an ongoing basis, at any point
during the life of a Fund, a "distribution," as such term is used in the
Securities Act of 1933 ("Securities Act"), may be occurring. 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 that could render them statutory underwriters and subject to the
prospectus-delivery and liability provisions of the Securities Act. Nonetheless,
any determination of whether one is an underwriter must take into account all
the relevant facts and circumstances of each particular case.
Broker-dealers should also note that dealers who are not "underwriters," but are
participating in a distribution (as contrasted to ordinary secondary
transactions), and thus dealing with shares that are part of an "unsold
allotment" within the meaning of Section 4(3)(C) of the Securities Act, would be
unable to take advantage of the prospectus delivery exemption provided by
Section 4(3) of the Securities Act. For delivery of prospectuses to exchange
members, the prospectus delivery mechanism of Rule 153 under the Securities Act
is only available with respect to transactions on a national securities
exchange.
Creation and Redemption Transaction Fees for Creation Units
Each Fund may impose a creation transaction fee and a redemption transaction fee
to offset transfer and other transaction costs associated with the issuance and
redemption of Creation Units of shares. The creation and redemption transaction
fees applicable to each Fund are listed below. The standard creation transaction
fee is charged to each purchaser on the day such purchaser creates a Creation
Unit. The standard fee is a single charge and will be the amount indicated below
regardless of the number of Creation Units purchased by an investor on the same
day. Similarly, the standard redemption transaction fee will be the amount
indicated regardless of the number of Creation Units redeemed that day.
Purchasers and redeemers of Creation Units of a Fund for cash (other than the
Middle East Dividend Fund) will also be subject to an additional variable charge
of up to a maximum of four times the amount shown below under "Maximum
Creation/Redemption Transaction Fee" to offset the transaction cost to the Fund
of buying portfolio securities. In addition, purchasers and redeemers of shares
in Creation Units are responsible for payment of the costs of transferring
securities to or out of a Fund. From time to time, WisdomTree Asset Management
may cover the cost of any transaction fees.
28 WisdomTree Trust Prospectus
The following table also shows, as of July 1, 2008, the approximate value of one
Creation Unit per Fund, including the standard creation and redemption
transaction fee. These fees are payable only by investors who purchase shares
directly from a Fund. Retail investors who purchase shares through their
brokerage account will not pay these fees.
---------------------------------------------------------------------------------------------
Approximate Standard Creation/ Maximum Creation/
Value of One Redemption Redemption
Name of Fund Creation Unit Transaction Fee Transaction Fee
---------------------------------------------------------------------------------------------
WisdomTree Earnings Funds
---------------------------------------------------------------------------------------------
WisdomTree India Earnings Fund $ 5,000,000 $ 5,000 $ 20,000
---------------------------------------------------------------------------------------------
WisdomTree Total Earnings Fund $ 3,000,000 $ 5,500 $ 12,090
---------------------------------------------------------------------------------------------
WisdomTree Earnings 500 Fund $ 3,000,000 $ 2,500 $ 2,500
---------------------------------------------------------------------------------------------
WisdomTree MidCap Earnings Fund $ 3,000,000 $ 3,500 $ 4,000
---------------------------------------------------------------------------------------------
WisdomTree SmallCap Earnings Fund $ 3,000,000 $ 4,000 $ 5,705
---------------------------------------------------------------------------------------------
WisdomTree Earnings Top 100 Fund $ 3,000,000 $ 500 $ 500
---------------------------------------------------------------------------------------------
WisdomTree Low P/E Fund $ 3,000,000 $ 2,000 $ 3,500
---------------------------------------------------------------------------------------------
Distribution
ALPS Distributors, Inc. (the "Distributor") serves as the distributor of
Creation Units for each Fund on an agency basis. The Distributor does not
maintain a secondary market in shares of the Funds. The Distributor's principal
address is 1290 Broadway, Suite 1100, Denver, Colorado 80203.
The Distributor has no role in determining the policies of any Fund or the
securities that are purchased or sold by any Fund.
Additional Notices
Shares of the Trust are not sponsored, endorsed, or promoted by any listing
exchange ("Exchange"). The Exchange makes no representation or warranty, express
or implied, to the owners of the shares of any Fund or any member of the public
regarding the ability of a fund to track the total return performance of any
Index or the ability of any Index identified herein to track stock market
performance. The Exchange is not responsible for, nor has it participated in,
the determination of the compilation or the calculation of any Index, nor in the
determination of the timing of, prices of, or quantities of the shares of any
Fund to be issued, nor in the determination or calculation of the equation by
which the shares are redeemable. The Exchange has no obligation or liability to
owners of the shares of any Fund in connection with the administration,
marketing, or trading of the shares of the Fund.
The Exchange does not guarantee the accuracy and/or the completeness of any
Index or any data included therein. The Exchange makes no warranty, express or
implied, as to results to be obtained by the WisdomTree Trust on behalf of its
Funds, owners of the shares, or any other person or entity from the use of the
subject Indexes or any data included therein. The Exchange makes no express or
implied warranties, and hereby expressly disclaims all warranties of
merchantability or fitness for a particular purpose with respect to any Index or
any data included therein. Without limiting any of the foregoing, in no event
shall the Exchange have any liability for any lost profits or indirect,
punitive, special, or consequential damages even if notified of the possibility
thereof.
WisdomTree Investments, WisdomTree Asset Management and the Funds make no
representation or warranty, express or implied, to the owners of shares of the
Funds or any member of the public regarding the advisability of investing in
securities generally or in the Funds particularly or the ability of the Indexes
to track general stock market performance. WisdomTree Investments is the
licensor of certain trademarks, service marks and trade names of the Funds.
WisdomTree Investments has no obligation to take the needs of the Funds or the
owners of shares of the Funds into consideration in determining,
WisdomTree Trust Prospectus 29
composing, or calculating the Indexes. WisdomTree Investments is not responsible
for, and has not participated in, the determination of the timing of, prices at,
or quantities of shares of the Funds to be issued or in the determination or
calculation of the equation by which the shares of the Funds are redeemable.
The Funds, WisdomTree Investments and WisdomTree Asset Management do not
guarantee the accuracy, completeness, or performance of any Index or the data
included therein and shall have no liability in connection with any Index or
Index calculation. WisdomTree Investments has contracted with Standard & Poor's
("S&P") to maintain and calculate each Earnings Index. S&P shall have no
liability for any errors or omissions in calculating any Earnings Index.
Financial Highlights
The financial highlights table is intended to help you understand the Funds'
financial performance since inception. The total return in the table represents
the rate that an investor would have earned (or lost) on an investment in the
respective Fund (assuming reinvestment of all dividends and distributions). This
information has been derived from the financial statements audited by Ernst &
Young LLP, independent registered public accounting firm, whose report, along
with the Funds' financial statements, are included in the Funds' Annual Report,
which is available upon request.
30 WisdomTree Trust Prospectus
Financial Highlights
WisdomTree Earnings Funds
Selected data for a share of beneficial interest outstanding throughout the
indicated period is presented below:
---------------------------------------------------------------------------------------------
For the period
For the February 23, 2007(1)
Year Ended through
WisdomTree Total Earnings Fund March 31, 2008 March 31, 2007
---------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 48.99 $ 49.97
---------------------------------------------------------------------------------------------
Investment operations:
Net investment income(2) 0.85 0.11
Net realized and unrealized loss (3.56) (1.00)
---------------------------------------------------------------------------------------------
Total from investment operations (2.71) (0.89)
---------------------------------------------------------------------------------------------
Dividends to shareholders:
Net investment income (0.96) (0.09)
---------------------------------------------------------------------------------------------
Total dividends to shareholders (0.96) (0.09)
---------------------------------------------------------------------------------------------
Net asset value, end of period $ 45.32 $ 48.99
---------------------------------------------------------------------------------------------
TOTAL RETURN(3) (5.69)% (1.79)%
---------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted) $ 15,861 $ 24,497
Ratio to average net assets of:
Expenses, net of expense reimbursements 0.28% 0.28%(4)
Expenses, prior to expense reimbursements 0.28% 0.35%(4)
Net investment income 1.76% 2.21%(4)
---------------------------------------------------------------------------------------------
Portfolio turnover rate(5) 11% 1%
---------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------
For the period
For the February 23, 2007(1)
Year Ended through
WisdomTree Earnings 500 Fund March 31, 2008 March 31, 2007
---------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 48.85 $ 49.77
---------------------------------------------------------------------------------------------
Investment operations:
Net investment income(2) 0.94 0.11
Net realized and unrealized loss (3.18) (0.94)
---------------------------------------------------------------------------------------------
Total from investment operations (2.24) (0.83)
---------------------------------------------------------------------------------------------
Dividends to shareholders:
Net investment income (0.84) (0.09)
---------------------------------------------------------------------------------------------
Total dividends to shareholders (0.84) (0.09)
---------------------------------------------------------------------------------------------
Net asset value, end of period $ 45.77 $ 48.85
---------------------------------------------------------------------------------------------
TOTAL RETURN(3) (4.72)% (1.67)%
---------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted) $ 54,927 $ 19,538
Ratio to average net assets of:
Expenses, net of expense reimbursements 0.28% 0.28%(4)
Expenses prior to expense reimbursements 0.28% 0.37%(4)
Net investment income 1.93% 2.24%(4)
---------------------------------------------------------------------------------------------
Portfolio turnover rate(5) 8% 1%
---------------------------------------------------------------------------------------------
(1) Commencement of investment operations.
(2) Based on average shares outstanding.
(3) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all dividends
and distributions at net asset value during the period and redemption on
the last day of the period. Total return calculated for a period of less
than one year is not annualized. The total return would have been lower if
certain expenses had not been reimbursed by the investment adviser.
(4) Annualized.
(5) Portfolio turnover rate is not annualized and excludes the value of
portfolio securities received or delivered as a result of in-kind
creations or redemptions of the Fund's capital shares.
WisdomTree Trust Prospectus 31
Financial Highlights
WisdomTree Earnings Funds
Selected data for a share of beneficial interest outstanding throughout the
indicated period is presented below:
---------------------------------------------------------------------------------------------
For the period
For the February 23, 2007(1)
Year Ended through
WisdomTree Midcap Earnings Fund March 31, 2008 March 31, 2007
---------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 48.77 $ 50.01
---------------------------------------------------------------------------------------------
Investment operations:
Net investment income(2) 0.81 0.07
Net realized and unrealized loss (6.90) (1.25)
---------------------------------------------------------------------------------------------
Total from investment operations (6.09) (1.18)
---------------------------------------------------------------------------------------------
Dividends to shareholders:
Net investment income (0.60) (0.06)
---------------------------------------------------------------------------------------------
Total dividends to shareholders (0.60) (0.06)
---------------------------------------------------------------------------------------------
Net asset value, end of period $ 42.08 $ 48.77
---------------------------------------------------------------------------------------------
TOTAL RETURN(3) (12.57)% (2.37)%
---------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted) $ 25,247 $ 4,877
Ratio to average net assets of:
Expenses, net of expense reimbursements 0.38% 0.38%(4)
Expenses, prior to expense reimbursements 0.38% 0.74%(4)
Net investment income 1.70% 1.47%(4)
---------------------------------------------------------------------------------------------
Portfolio turnover rate(5) 45% 0%(6)
---------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------
For the period
For the February 23, 2007(1)
Year Ended through
WisdomTree SmallCap Earnings Fund March 31, 2008 March 31, 2007
---------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 48.03 $ 50.03
---------------------------------------------------------------------------------------------
Investment operations:
Net investment income(2) 0.58 0.06
Net realized and unrealized loss (9.17) (2.02)
---------------------------------------------------------------------------------------------
Total from investment operations (8.59) (1.96)
---------------------------------------------------------------------------------------------
Dividends to shareholders:
Net investment income (0.48) (0.04)
---------------------------------------------------------------------------------------------
Total dividends to shareholders (0.48) (0.04)
---------------------------------------------------------------------------------------------
Net asset value, end of period $ 38.96 $ 48.03
---------------------------------------------------------------------------------------------
TOTAL RETURN(3) (17.97)% (3.92)%
---------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted) $ 15,585 $ 9,607
Ratio to average net assets of:
Expenses, net of expense reimbursements 0.38% 0.38%(4)
Expenses, prior to expense reimbursements 0.38% 0.58%(4)
Net investment income 1.28% 1.39%(4)
---------------------------------------------------------------------------------------------
Portfolio turnover rate(5) 37% 0%(6)
---------------------------------------------------------------------------------------------
(1) Commencement of investment operations.
(2) Based on average shares outstanding.
(3) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all dividends
and distributions at net asset value during the period and redemption on
the last day of the period. Total return calculated for a period of less
than one year is not annualized. The total return would have been lower if
certain expenses had not been reimbursed by the investment adviser.
(4) Annualized.
(5) Portfolio turnover rate is not annualized and excludes the value of
portfolio securities received or delivered as a result of in-kind
creations or redemptions of the Fund's capital shares.
(6) Amount represents less than 1%.
32 WisdomTree Trust Prospectus
Financial Highlights
WisdomTree Earnings Funds
Selected data for a share of beneficial interest outstanding throughout the
indicated period is presented below:
------------------------------------------------------------------------------------
For the period
For the February 23, 2007(1)
Year Ended through
WisdomTree Earnings Top 100 Fund March 31, 2008 March 31, 2007
------------------------------------------------------------------------------------
Net asset value, beginning of period $ 49.38 $ 50.15
------------------------------------------------------------------------------------
Investment operations:
Net investment income(2) 0.90 0.10
Net realized and unrealized loss (4.69) (0.80)
------------------------------------------------------------------------------------
Total from investment operations (3.79) (0.70)
------------------------------------------------------------------------------------
Dividends to shareholders:
Net investment income (1.03) (0.07)
------------------------------------------------------------------------------------
Total dividends to shareholders (1.03) (0.07)
------------------------------------------------------------------------------------
Net asset value, end of period $ 44.56 $ 49.38
------------------------------------------------------------------------------------
TOTAL RETURN(3) (7.89)% (1.39)%
------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted) $ 13,368 $ 24,688
Ratio to average net assets of:
Expenses, net of expense reimbursements 0.38% 0.38%(4)
Expenses, prior to expense reimbursements 0.38% 0.45%(4)
Net investment income 1.83% 2.03%(4)
------------------------------------------------------------------------------------
Portfolio turnover rate(5) 13% 2%
------------------------------------------------------------------------------------
------------------------------------------------------------------------------------
For the period
For the February 23, 2007(1)
Year Ended through
WisdomTree Low P/E Fund March 31, 2008 March 31, 2007
------------------------------------------------------------------------------------
Net asset value, beginning of period $ 49.06 $ 49.99
------------------------------------------------------------------------------------
Investment operations:
Net investment income(2) 1.03 0.10
Net realized and unrealized loss (5.49) (0.95)
------------------------------------------------------------------------------------
Total from investment operations (4.46) (0.85)
------------------------------------------------------------------------------------
Dividends to shareholders:
Net investment income (1.07) (0.08)
------------------------------------------------------------------------------------
Total dividends to shareholders (1.07) (0.08)
------------------------------------------------------------------------------------
Net asset value, end of period $ 43.53 $ 49.06
------------------------------------------------------------------------------------
TOTAL RETURN(3) (9.31)% (1.69)%
------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted) $ 23,940 $ 24,529
Ratio to average net assets of:
Expenses, net of expense reimbursements 0.38% 0.38%(4)
Expenses, prior to expense reimbursements 0.38% 0.45%(4)
Net investment income 2.10% 1.98%(4)
------------------------------------------------------------------------------------
Portfolio turnover rate(5) 20% 1%
------------------------------------------------------------------------------------
(1) Commencement of investment operations.
(2) Based on average shares outstanding.
(3) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all dividends
and distributions at net asset value during the period and redemption on
the last day of the period. Total return calculated for a period of less
than one year is not annualized. The total return would have been lower if
certain expenses had not been reimbursed by the investment adviser.
(4) Annualized.
(5) Portfolio turnover rate is not annualized and excludes the value of
portfolio securities received or delivered as a result of in-kind
creations or redemptions of the Fund's capital shares.
WisdomTree Trust Prospectus 33
Financial Highlights
WisdomTree Earnings Funds
Selected data for a share of beneficial interest outstanding throughout the
indicated period is presented below:
--------------------------------------------------------------------------------
For the period
February 22, 2008(1)
through
WisdomTree India Earnings Fund March 31, 2008
--------------------------------------------------------------------------------
Net asset value, beginning of period $ 24.94
--------------------------------------------------------------------------------
Investment operations:
Net investment loss(2) (0.01)
Net realized and unrealized loss (2.36)
--------------------------------------------------------------------------------
Total from investment operations (2.37)
--------------------------------------------------------------------------------
Net asset value, end of period $ 22.57
--------------------------------------------------------------------------------
TOTAL RETURN(3) (9.50)%
--------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted) $ 162,540
Ratio to average net assets of:
Expenses, net of expense reimbursements 0.88%(4)
Expenses, prior to expense reimbursements 2.10%(4)
Net investment income (0.41)%(4)
--------------------------------------------------------------------------------
Portfolio turnover rate(5) 0%(6)
--------------------------------------------------------------------------------
(1) Commencement of investment operations.
(2) Based on average shares outstanding.
(3) Total return is calculated assuming an initial investment made at the net
asset value at the beginning of the period, reinvestment of all dividends
and distributions at net asset value during the period and redemption on
the last day of the period. Total return calculated for a period of less
than one year is not annualized. The total return would have been lower if
certain expenses had not been reimbursed by the investment adviser.
(4) Annualized.
(5) Portfolio turnover rate is not annualized and excludes the value of
portfolio securities received or delivered as a result of in-kind
creations or redemptions of the Fund's capital shares.
(6) Amount represents less than 1%.
34 WisdomTree Trust Prospectus
Frequency Distribution of Discounts & Premiums (unaudited)
WisdomTree Earnings Funds
The chart below presents information about differences between the per share net
asset value ("NAV") of each Fund and the market trading price of shares of each
Fund. For these purposes, the "market price" is the mid-point of the highest bid
and lowest offer for Fund shares as of the close of trading on the exchange
where Fund shares are listed. The term "premium" is sometimes used to describe a
market price in excess of NAV and the term "discount" is sometimes used to
describe a market price below NAV. The chart presents information about the size
and frequency of end of day premiums or discounts. As with other exchange traded
funds, the market price of Fund shares is typically slightly higher or lower
than the Fund's per share NAV. Factors that contribute to the differences
between market price and NAV include the supply and demand for Fund shares and
investors' assessments of the underlying value of a Fund's portfolio securities.
---------------------------------------------------------------------------------------------------------------------
Market Price Above or Equal to Market Price Below
Net Asset Value Net Asset Value
------------------------------ -------------------------
Basis Point Number Percentage of Number Percentage of
Differential of Days Total Days of Days Total Days
---------------------------------------------------------------------------------------------------------------------
February 22, 2008* - June 30, 2008
WisdomTree India Earnings Fund 0-24.9 9 10.00% 1 1.11%
---------------------------------------------------------------------------
25-49.9 6 6.67% 5 5.56%
---------------------------------------------------------------------------
50-74.9 7 7.78% 5 5.56%
---------------------------------------------------------------------------
75-100.0 9 10.00% 2 2.22%
---------------------------------------------------------------------------
>100.0 32 35.56% 14 15.56%
---------------------------------------------------------------------------
Total 63 70.00% 27 30.00%
---------------------------------------------------------------------------------------------------------------------
April 1, 2007 - June 30, 2008
WisdomTree Total Earnings Fund 0-24.9 116 36.83% 183 58.10%
---------------------------------------------------------------------------
25-49.9 5 1.59% 7 2.22%
---------------------------------------------------------------------------
50-74.9 1 0.32% 1 0.32%
---------------------------------------------------------------------------
75-100.0 1 0.32% 0 0.00%
---------------------------------------------------------------------------
>100.0 1 0.32% 0 0.00%
---------------------------------------------------------------------------
Total 124 39.37% 191 60.63%
---------------------------------------------------------------------------------------------------------------------
April 1, 2007 - June 30, 2008
WisdomTree Earnings 500 Fund 0-24.9 133 42.22% 164 52.06%
---------------------------------------------------------------------------
25-49.9 9 2.86% 4 1.27%
---------------------------------------------------------------------------
50-74.9 2 0.63% 0 0.00%
---------------------------------------------------------------------------
75-100.0 1 0.32% 0 0.00%
---------------------------------------------------------------------------
>100.0 2 0.63% 0 0.00%
---------------------------------------------------------------------------
Total 147 46.67% 168 53.33%
---------------------------------------------------------------------------------------------------------------------
April 1, 2007 - June 30, 2008
WisdomTree MidCap Earnings Fund 0-24.9 135 42.86% 163 51.75%
---------------------------------------------------------------------------
25-49.9 6 1.90% 5 1.59%
---------------------------------------------------------------------------
50-74.9 2 0.63% 2 0.63%
---------------------------------------------------------------------------
75-100.0 1 0.32% 0 0.00%
---------------------------------------------------------------------------
>100.0 1 0.32% 0 0.00%
---------------------------------------------------------------------------
Total 145 46.03% 170 53.97%
---------------------------------------------------------------------------------------------------------------------
April 1, 2007 - June 30, 2008
WisdomTree SmallCap Earnings Fund 0-24.9 124 39.37% 151 47.94%
---------------------------------------------------------------------------
25-49.9 12 3.81% 13 4.13%
---------------------------------------------------------------------------
50-74.9 4 1.27% 3 0.95%
---------------------------------------------------------------------------
75-100.0 2 0.63% 0 0.00%
---------------------------------------------------------------------------
>100.0 4 1.27% 2 0.63%
---------------------------------------------------------------------------
Total 146 46.35% 169 53.65%
---------------------------------------------------------------------------------------------------------------------
* Commencement of investment operations.
WisdomTree Trust Prospectus 35
Frequency Distribution of Discounts & Premiums (unaudited) (concluded)
WisdomTree Earnings Funds
---------------------------------------------------------------------------------------------------------------------
Market Price Above or Equal to Market Price Below
Net Asset Value Net Asset Value
------------------------------ -------------------------
Basis Point Number Percentage of Number Percentage of
Differential of Days Total Days of Days Total Days
---------------------------------------------------------------------------------------------------------------------
April 1, 2007 - June 30, 2008
WisdomTree Earnings Top 100 Fund 0-24.9 133 42.22% 163 51.75%
---------------------------------------------------------------------------
25-49.9 5 1.59% 6 1.90%
---------------------------------------------------------------------------
50-74.9 1 0.32% 2 0.63%
---------------------------------------------------------------------------
75-100.0 1 0.32% 1 0.32%
---------------------------------------------------------------------------
>100.0 2 0.63% 1 0.32%
---------------------------------------------------------------------------
Total 142 45.08% 173 54.92%
---------------------------------------------------------------------------------------------------------------------
April 1, 2007 - June 30, 2008
WisdomTree Low P/E Fund 0-24.9 126 40.00% 168 53.33%
---------------------------------------------------------------------------
25-49.9 8 2.54% 4 1.27%
---------------------------------------------------------------------------
50-74.9 1 0.32% 4 1.27%
---------------------------------------------------------------------------
75-100.0 2 0.63% 0 0.00%
---------------------------------------------------------------------------
>100.0 2 0.63% 0 0.00%
---------------------------------------------------------------------------
Total 139 44.13% 176 55.87%
---------------------------------------------------------------------------------------------------------------------
36 WisdomTree Trust Prospectus
(This page intentionally left blank.)
WisdomTree Trust Prospectus 37
The Trust's current SAI provides additional detailed information about the
Funds. The Trust has electronically filed the SAI with the SEC. It is
incorporated by reference in this Prospectus.
Additional information about the Funds' investments is available in the Funds'
annual and semi-annual reports to shareholders. In the annual report you will
find a discussion of the market conditions and investment strategies that
significantly affected the Funds' performance during the last fiscal year.
To make shareholder inquiries, for more detailed information on the Funds or to
request the SAI, annual or semi-annual shareholder reports free of charge,
please:
--------------------------------------------------------------------------------
Call: 1-866-909-9473
Monday through Friday
8:00 a.m. to 8:00 p.m. (Eastern time)
--------------------------------------------------------------------------------
Write: WisdomTree Trust
c/o ALPS Distributors, Inc.
1290 Broadway, Suite 1100
Denver, Colorado 80203
--------------------------------------------------------------------------------
Visit: www.wisdomtree.com
--------------------------------------------------------------------------------
Information about the Funds (including the SAI) can be reviewed and copied at
the SEC's Public Reference Room in Washington, D.C., and information on the
operation of the Public Reference Room may be obtained by calling the SEC at
1-202-942-8090. Reports and other information about the Funds are available on
the EDGAR Database on the SEC's Internet site at www.sec.gov, and copies of this
information may be obtained, after paying a duplicating fee, by electronic
request at the following E-mail address: publicinfo@sec.gov, or by writing the
SEC's Public Reference Section, Washington, D.C. 20549-0102.
No person is authorized to give any information or to make any representations
about any Fund and its shares not contained in this Prospectus and you should
not rely on any other information. Read and keep this Prospectus for future
reference.
(C)2008 WisdomTree Trust
WisdomTree Funds are distributed by
ALPS Distributors,Inc.
1290 Broadway, Suite 1100
Denver, Colorado 80203
WisdomTree(R) is a registered mark of WisdomTree
Investments, Inc.
INVESTMENT COMPANY ACT FILE NO. 811-21864
[WISDOMTREE LOGO]
WisdomTree Trust
380 Madison Avenue, 21st Floor
New York, NY 10017
STATEMENT OF ADDITIONAL INFORMATION DATED JULY 29, 2008
WISDOMTREE(R) TRUST
This Statement of Additional Information ("SAI") is not a Prospectus. It should
be read in conjunction with the current Prospectus ("Prospectus") for the
following separate investment portfolios (each, a "Fund") of WisdomTree Trust
(the "Trust"), as each such Prospectus may be revised from time to time:
WISDOMTREE DOMESTIC DIVIDEND FUNDS
WisdomTree Total Dividend Fund
WisdomTree High-Yielding Equity Fund
WisdomTree LargeCap Dividend Fund
WisdomTree Dividend Top 100 Fund
WisdomTree MidCap Dividend Fund
WisdomTree SmallCap Dividend Fund
WISDOMTREE EARNINGS FUNDS
WisdomTree Total Earnings Fund
WisdomTree Earnings 500 Fund
WisdomTree MidCap Earnings Fund
WisdomTree SmallCap Earnings Fund
WisdomTree Earnings Top 100 Fund
WisdomTree Low P/E Fund
WisdomTree India Earnings Fund
WISDOMTREE INTERNATIONAL DIVIDEND FUNDS
WisdomTree DEFA Fund
WisdomTree DEFA High-Yielding Equity Fund
WisdomTree Europe Total Dividend Fund
WisdomTree Europe High-Yielding Equity Fund
WisdomTree Europe SmallCap Dividend Fund
WisdomTree Japan Total Dividend Fund
WisdomTree Japan High-Yielding Equity Fund
WisdomTree Japan SmallCap Dividend Fund
WisdomTree Pacific ex-Japan Total Dividend Fund
WisdomTree Pacific ex-Japan High-Yielding Equity Fund
WisdomTree International LargeCap Dividend Fund
WisdomTree International Dividend Top 100 Fund
WisdomTree International MidCap Dividend Fund
WisdomTree International SmallCap Dividend Fund
WisdomTree Emerging Markets High-Yielding Equity Fund
WisdomTree Emerging Markets SmallCap Dividend Fund
WisdomTree Middle East Dividend Fund
WISDOMTREE INTERNATIONAL SECTOR FUNDS
WisdomTree International Basic Materials Sector Fund
WisdomTree International Communications Sector Fund
WisdomTree International Consumer Discretionary Sector Fund
WisdomTree International Consumer Staples Sector Fund
WisdomTree International Energy Sector Fund
WisdomTree International Financial Sector Fund
WisdomTree International Health Care Sector Fund
WisdomTree International Industrial Sector Fund
WisdomTree International Technology Sector Fund
WisdomTree International Utilities Sector Fund
WisdomTree International Real Estate Fund
The current Prospectus for each of the Domestic and International Dividend
Funds, the International Sector Funds and the Earnings Funds is dated July 29,
2008. The International Dividend Funds, International Sector Funds and the India
Earnings Fund are sometimes referred to collectively as the "International
Funds." Capitalized terms used herein that are not defined have the same meaning
as in the Prospectus, unless otherwise noted. The Funds' audited financial
statements for the period ended March 31, 2008 are incorporated in this SAI by
reference to the Funds' 2008 Annual Reports to Shareholders (File No.
811-21864). You may obtain a copy of the Funds' Annual Report at no charge by
request to the Fund at the address or phone number noted below. Since the
WisdomTree Middle East Dividend Fund did not commence operations until after the
close of the fiscal year, financial statements for this Fund are not yet
available.
A copy of the Prospectus for each Fund may be obtained, without charge, by
calling 1-866-909-9473 or visiting www.wisdomtree.com, or writing to WisdomTree
Trust, c/o ALPS Distributors, Inc., 1290 Broadway, Suite 1100, Denver, Colorado
80203.
SAI dated July 29, 2008
TABLE OF CONTENTS
General Description of the Trust and the Funds ............................ 1
WisdomTree Domestic Dividend Funds ..................................... 1
WisdomTree Earnings Funds .............................................. 1
WisdomTree International Dividend Funds ................................ 1
WisdomTree International Sector Funds .................................. 1
Investment Strategies and Risks ........................................... 2
Principal Investment Strategy .......................................... 2
General Risks .......................................................... 3
Lack of Diversification ................................................ 3
Specific Investment Strategies ......................................... 4
Securities Lending ..................................................... 4
Money Market Instruments ............................................... 4
Repurchase Agreements .................................................. 4
Reverse Repurchase Agreements .......................................... 4
Investment Company Securities .......................................... 5
Real Estate Investment Trusts .......................................... 5
Non-U.S. Securities .................................................... 5
Depositary Receipts .................................................... 10
Currency Transactions .................................................. 11
Illiquid Securities .................................................... 11
Futures, Options and Options on Futures Contracts ...................... 11
Risks of Futures and Options Transactions .............................. 12
Swap Agreements ........................................................ 12
Participation Certificates ............................................. 12
Tracking Stocks ........................................................ 13
Future Developments .................................................... 13
Proxy Voting Policy ....................................................... 13
Portfolio Holding Disclosure Policies and Procedures ...................... 14
Description of the WisdomTree Indexes ..................................... 15
WisdomTree Domestic Dividend Indexes ................................... 16
WisdomTree Dividend Index ........................................... 16
WisdomTree High-Yielding Equity Index ............................... 16
WisdomTree LargeCap Dividend Index .................................. 17
WisdomTree Dividend Top 100 Index ................................... 17
WisdomTree MidCap Dividend Index .................................... 17
WisdomTree SmallCap Dividend Index .................................. 17
WisdomTree Earnings Indexes ............................................ 17
WisdomTree Earnings Index ........................................... 17
WisdomTree Earnings 500 Index ....................................... 18
WisdomTree MidCap Earnings Index .................................... 18
WisdomTree SmallCap Earnings Index .................................. 18
WisdomTree Earnings Top 100 Index ................................... 18
WisdomTree Low P/E Index ............................................ 19
WisdomTree India Earnings Index ..................................... 19
WisdomTree International Dividend Indexes .............................. 19
WisdomTree DEFA Index ............................................... 19
WisdomTree DEFA High-Yielding Equity Index .......................... 20
WisdomTree Europe Dividend Index .................................... 20
WisdomTree Europe High-Yielding Equity Index ........................ 20
WisdomTree Europe SmallCap Dividend Index ........................... 20
WisdomTree Japan Dividend Index ..................................... 20
WisdomTree Japan High-Yielding Equity Index ......................... 21
WisdomTree Japan SmallCap Dividend Index ............................ 21
WisdomTree Pacific ex-Japan Dividend Index .......................... 21
WisdomTree Pacific ex-Japan High-Yielding Equity Index .............. 21
WisdomTree International LargeCap Dividend Index .................... 21
WisdomTree International Dividend Top 100 Index ..................... 21
WisdomTree International MidCap Dividend Index ...................... 22
WisdomTree International SmallCap Dividend Index .................... 22
WisdomTree Emerging Markets High-Yielding Equity Index .............. 22
WisdomTree Emerging Markets SmallCap Dividend Index ................. 22
WisdomTree Middle East Dividend Index ............................... 23
WisdomTree International Sector Indexes ................................ 23
WisdomTree International Basic Materials Sector Index ............... 23
WisdomTree International Communications Sector Index ................ 23
WisdomTree International Consumer Discretionary Sector Index ........ 23
WisdomTree International Consumer Staples Sector Index .............. 24
WisdomTree International Energy Sector Index ........................ 24
WisdomTree International Financial Sector Index ..................... 24
WisdomTree International Health Care Sector Index ................... 24
WisdomTree International Industrial Sector Index .................... 24
WisdomTree International Technology Sector Index .................... 25
WisdomTree International Utilities Sector Index ..................... 25
WisdomTree International Real Estate Index .......................... 25
Investment Limitations .................................................... 26
Fundamental Policies ...................................................... 26
Senior Securities ...................................................... 26
Borrowing .............................................................. 26
Underwriting ........................................................... 26
Concentration .......................................................... 26
Real Estate ............................................................ 26
Commodities ............................................................ 26
Loans .................................................................. 27
Continuous Offering ....................................................... 27
Management of the Trust ................................................... 28
Trustees and Officers ..................................................... 28
Interested Trustee and Officers ........................................... 28
Independent Trustees ...................................................... 29
Committees of the Board of Trustees .................................... 30
Audit Committee ........................................................ 30
Governance and Nominating Committee .................................... 30
Remuneration of Trustees ............................................... 31
Control Persons and Principal Holders of Securities .................... 31
Investment Adviser ..................................................... 48
Sub-Adviser ............................................................ 50
Portfolio Managers ..................................................... 51
Portfolio Manager Fund Ownership ....................................... 52
Portfolio Manager Compensation ......................................... 52
Code of Ethics ......................................................... 53
Administrator, Custodian and Transfer Agent ............................ 53
Distributor ............................................................ 54
Brokerage Transactions .................................................... 55
Additional Information Concerning the Trust ............................... 60
Shares ................................................................. 60
Termination of the Trust or a Fund ..................................... 60
Role of DTC ............................................................ 60
Creation & Redemption of Creation Unit Aggregations .................... 61
Creation ............................................................... 61
Fund Deposit ........................................................... 61
Procedures for Creation of Creation Unit Aggregations .................. 62
Placement of Creation Orders for Domestic Dividend and Earnings
Weighted Funds Using the Clearing Process ........................... 63
Placement of Creation Orders for Domestic Dividend and Earnings
Weighted Funds Outside the Clearing Process ......................... 63
Placement of Creation Orders for International Funds ................... 64
Acceptance of Orders for Creation Unit Aggregations .................... 65
Creation Transaction Fee ............................................... 65
Placement of Redemption Orders for Domestic Dividend and Earnings
Weighted Funds Using the Clearing Process ........................... 66
Placement of Redemption Orders for Domestic Dividend and Earnings
Weighted Funds Outside the Clearing Process ......................... 67
Placement of Redemption Orders for International Funds ................. 67
Regular Holidays .......................................................... 68
Taxes ..................................................................... 73
Determination of NAV ...................................................... 80
Dividends and Distributions ............................................... 80
Financial Statements ...................................................... 81
Miscellaneous Information ................................................. 81
GENERAL DESCRIPTION OF THE TRUST AND THE FUNDS
The Trust was organized as a Delaware statutory trust on December 15, 2005 and
is authorized to have multiple series or portfolios. The Trust is an open-end,
non-diversified 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"). This SAI relates to the following Funds:
WISDOMTREE DOMESTIC DIVIDEND FUNDS
WisdomTree Total Dividend Fund
WisdomTree High-Yielding Equity Fund
WisdomTree LargeCap Dividend Fund
WisdomTree Dividend Top 100 Fund
WisdomTree MidCap Dividend Fund
WisdomTree SmallCap Dividend Fund
WISDOMTREE EARNINGS FUNDS
WisdomTree Total Earnings Fund
WisdomTree Earnings 500 Fund
WisdomTree MidCap Earnings Fund
WisdomTree SmallCap Earnings Fund
WisdomTree Earnings Top 100 Fund
WisdomTree Low P/E Fund
WisdomTree India Earnings Fund
WISDOMTREE INTERNATIONAL DIVIDEND FUNDS
WisdomTree DEFA Fund
WisdomTree DEFA High-Yielding Equity Fund
WisdomTree Europe Total Dividend Fund
WisdomTree Europe High-Yielding Equity Fund
WisdomTree Europe SmallCap Dividend Fund
WisdomTree Japan Total Dividend Fund
WisdomTree Japan High-Yielding Equity Fund
WisdomTree Japan SmallCap Dividend Fund
WisdomTree Pacific ex-Japan Total Dividend Fund
WisdomTree Pacific ex-Japan High-Yielding Equity Fund
WisdomTree International LargeCap Dividend Fund
WisdomTree International Dividend Top 100 Fund
WisdomTree International MidCap Dividend Fund
WisdomTree International SmallCap Dividend Fund
WisdomTree Emerging Markets High-Yielding Equity Fund
WisdomTree Emerging Markets SmallCap Dividend Fund
WisdomTree Middle East Dividend Fund
WISDOMTREE INTERNATIONAL SECTOR FUNDS
WisdomTree International Basic Materials Sector Fund
WisdomTree International Communications Sector Fund
WisdomTree International Consumer Discretionary Sector Fund
WisdomTree International Consumer Staples Sector Fund
WisdomTree International Energy Sector Fund
WisdomTree International Financial Sector Fund
WisdomTree International Health Care Sector Fund
WisdomTree International Industrial Sector Fund
WisdomTree International Technology Sector Fund
WisdomTree International Utilities Sector Fund
WisdomTree International Real Estate Fund
1
Each Fund described in this SAI seeks investment returns that closely correspond
to the price and yield performance, before fees and expenses, of a particular
index ("Index") that defines a specific segment of the U.S. or international
stock markets. The Indexes are created using proprietary methodology developed
by WisdomTree Investments, Inc. ("WisdomTree Investments"). WisdomTree
Investments is the parent company of WisdomTree Asset Management, Inc.
("WisdomTree Asset Management"), the investment adviser to each Fund. Mellon
Capital Management Corporation ("Mellon Capital") (formerly, BNY Investment
Advisors) is the investment sub-adviser ("Sub-Adviser") to each Fund. ALPS
Distributors, Inc. is the distributor (the "Distributor") of the shares of each
Fund.
Each Fund issues and redeems shares at net asset value per share ("NAV") only in
large blocks of shares, typically 50,000 shares or more ("Creation Units").
These transactions are usually in exchange for a basket of securities and an
amount of cash. As a practical matter, only institutions or large investors
purchase or redeem Creation Units. Except when aggregated in Creation Units,
shares of each Fund are not redeemable securities.
Shares of each Fund are listed on a national securities exchange, such as NYSE
Arca or the NASDAQ Stock Market ("NASDAQ") (each, a "Listing Exchange"), and
trade throughout the day on the Listing Exchange and other secondary markets at
market prices that may differ from NAV. As in the case of other publicly-traded
securities, brokers' commissions on transactions will be based on negotiated
commission rates at customary levels.
The Trust reserves the right to adjust the share 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 applicable Fund.
"WisdomTree" is a registered mark of WisdomTree Investments and has been
licensed for use by the Trust. WisdomTree Investments has patent applications
pending on the methodology and operation of its Indexes and the Funds.
INVESTMENT STRATEGIES AND RISKS
PRINCIPAL INVESTMENT STRATEGY. Each Fund seeks investment returns that closely
correspond to the price and yield performance, before fees and expenses, of a
particular Index developed by WisdomTree Investments. The Funds do not try to
beat the Indexes that they track and do not seek temporary defensive positions
when equity markets decline or appear to be overvalued.
This investment strategy, known as indexing, may eliminate some of the risks of
active portfolio management, such as poor security selection. In addition,
indexing may also help increase after-tax investment performance by keeping
portfolio turnover low in comparison to actively managed investment companies.
Under normal circumstances, at least 95% of a Fund's total assets (exclusive of
collateral held from securities lending) will be invested in the component
securities of its Index. Each Fund generally may invest up to 5% of its total
assets in securities not included in its underlying Index but which the Fund
believes will help it track its Index. For example, a Fund may invest in
securities that are not components of the relevant Index in order to reflect
various corporate actions and other changes to its relevant Index (such as
reconstitutions, additions and deletions). Under normal circumstances, as long
as a Fund invests at least 95% of its total assets in the stocks of its Index,
it also may invest its other assets in cash and cash equivalents, as well as in
other investment companies, futures contracts, options on futures contracts,
options, and swaps. The International Funds, from time to time, may have less
than 95% of their assets invested in securities of their respective underlying
Indexes in order to comply with the requirements of the Internal Revenue Code,
to meet regulatory requirements in non-U.S. jurisdictions or to manage major
Index changes. In these situations, which are expected to be infrequent and of
limited duration, an International Fund may not have less than 90% of its total
assets invested in securities of its underlying Index. WisdomTree Asset
Management expects that, over time, the correlation between each Fund's
performance and that of its underlying Index, before fees and expenses, will be
95% or better.
As a matter of general policy, each Fund will invest at least 80% of its net
assets, plus the amount of any borrowings for investment purposes, in the types
of securities suggested by its name. If, subsequent to an investment, the 80%
requirement is no longer met, a Fund's future investments will be made in a
manner that will
2
bring the Fund into compliance with this policy. The Trust will provide
shareholders with sixty (60) days prior notice of any change to this policy for
a Fund.
The WisdomTree India Earnings Fund attempts to achieve its investment objective
by investing in securities through the WisdomTree India Investment Portfolio,
Inc. (the "Portfolio"), a wholly-owned subsidiary of the WisdomTree India
Earnings Fund. References to the investment strategies and other policies of the
India Earnings Fund should be understood to also refer to the strategies and
polices of the Portfolio. The Portfolio is advised by WisdomTree Asset
Management and sub-advised by Mellon Capital.
GENERAL RISKS. An investment in a Fund should be made with an understanding that
the value of a Fund's portfolio securities may fluctuate 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 and changes in general economic or political conditions.
An investment in a Fund should also be made with an understanding of the risks
inherent in an investment in equity securities, including the risk that the
financial condition of issuers may become impaired or that the general condition
of the stock market may deteriorate (either of which may cause a decrease in the
value of the portfolio securities and thus in the value of shares of the Trust).
Common stocks are susceptible to general stock market fluctuations and to
volatile increases and decreases in value as market confidence and perceptions
of their issuers change. These investor perceptions 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 or banking crises.
Holders of common stocks incur more risk than holders of preferred stocks and
debt obligations because common stockholders, as owners of the issuer generally
have inferior rights to receive payments from the issuer in comparison with the
rights of creditors, or holders of debt obligations or preferred stocks.
Further, unlike debt securities, which typically have a stated principal amount
payable at maturity (whose value, however, is subject to market fluctuations
prior thereto), or preferred stocks, which typically have a liquidation
preference and which may have stated optional or mandatory redemption
provisions, common stocks have neither a fixed principal amount nor a maturity.
Common stock values are subject to market fluctuations as long as the common
stock remains outstanding.
Although all of the securities in the Indexes are listed on major U.S. or
non-U.S. stock exchanges, there can be no guarantees 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 a Fund's shares will be adversely affected if
trading markets for a Fund's portfolio securities are limited or absent, or if
bid/ask spreads are wide.
A discussion of some of the other risks associated with an investment in a Fund
is contained in each Fund's Prospectus.
LACK OF DIVERSIFICATION. Each Fund is considered to be "non-diversified." A
"non-diversified" classification means that a Fund is not limited by the 1940
Act with regard to the percentage of its assets that may be invested in the
securities of a single issuer. As a result, each of the Funds may invest more of
its assets in the securities of a single issuer or a smaller number of issuers
than if it were classified as a diversified fund. Therefore, each 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.
Each Fund does, however, intend to maintain the level of diversification
necessary to qualify as a regulated investment company ("RIC") under Subchapter
M of the Internal Revenue Code of 1986, as amended (the "Code"). The Subchapter
M diversification tests generally require that (i) a Fund invest no more than
25% of its total assets in securities (other than securities of the U.S.
government or other RICs) of any one issuer or two or more issuers that are
controlled by a Fund and that are engaged in the same, similar or related trades
or businesses, and (ii) at least 50% of a Fund's total assets consist of cash
and cash items, U.S. government securities, securities of other RICs and other
securities, with investments in such other securities limited in respect of any
one issuer to an amount not greater than 5% of the value of a Fund's total
assets and 10% of the outstanding voting securities of such issuer. These tax
requirements are generally applied at the end of each quarter of a Fund's
taxable year.
3
SPECIFIC INVESTMENT STRATEGIES. A description of certain investment strategies
and types of investments used by some or all of the Funds is set forth below.
SECURITIES LENDING. Each Fund may lend portfolio securities to certain
creditworthy borrowers, including the Funds' securities lending agent. Loans of
portfolio securities provide the Funds 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 high grade debt obligations at least equal at all times to
the market value of the loaned securities. The borrower pays to the Funds an
amount equal to any dividends or interest received on loaned securities. The
Funds retain all or a portion of the interest received on investment of cash
collateral or receives 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. A Fund will generally
not have the right to vote securities while they are being loaned.
MONEY MARKET INSTRUMENTS. Each 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 a 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 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.
REPURCHASE AGREEMENTS. Each Fund may enter into repurchase agreements with
counterparties that are deemed to present acceptable credit risks. A repurchase
agreement is a transaction in which a 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. A Fund maintains
custody of the underlying obligations prior to their repurchase, either through
its regular custodian or through a special "triparty" 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 a 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. Each Fund may enter into reverse repurchase
agreements, which involve the sale of securities held by a 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 each 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, a Fund will maintain the segregation, either on its
records or with the Trust's custodian, of cash or other liquid securities,
marked to market daily, in an amount at least equal to its obligations under the
reverse repurchase agreement.
Reverse repurchase agreements involve the risk that the buyer of the securities
sold by a Fund might be unable to deliver them when that 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
4
determine whether to enforce a 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.
INVESTMENT COMPANY SECURITIES. Each Fund may invest in the securities of other
investment companies (including money market funds). 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. All Funds may invest in the
securities of open-end funds (including money market funds) as permitted under
the 1940 Act. Each Fund may purchase shares of affiliated exchange traded funds
in secondary market transactions.
REAL ESTATE INVESTMENT TRUSTS. Each 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 are also subject to heavy
cash flow dependency, defaults by borrowers, self liquidation and the
possibility of failing to qualify for tax-free pass-through of income and net
gains under the Code, and to maintain exemption from the 1940 Act. 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.
NON-U.S. SECURITIES. The International Funds invest a significant portion of
their assets in non-U.S. equity securities. Investments in non-U.S. equity
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. Losses and other expenses may be incurred in converting between
various currencies in connection with purchases and sales of foreign securities.
Non-U.S. stock 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.
stock markets generally has been growing, such markets usually have
substantially less volume than U.S. markets. Therefore, a Fund's investment in
non-U.S. equity 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, which increase the likelihood of a failed settlement, which can result
in losses to a Fund. The value of non-U.S. investments and the investment income
derived from them may also be affected unfavorably by changes in currency
exchange control regulations.
Foreign brokerage commissions, custodial expenses and other fees are also
generally higher than for securities traded in the U.S. This may cause the
International Funds to incur higher portfolio transaction costs than domestic
equity funds.
5
Fluctuations in exchange rates may also 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.
Certain non-U.S. issuers in which the Funds, and in particular the International
Real Estate Fund, may invest may be treated as passive foreign investment
companies ("PFICs"). Investments in PFICs may decrease the tax efficiency of a
Fund. For a more detailed discussion of the U.S. federal income tax consequences
of a Fund's investment in PFICs, please see "Taxes."
Set forth below for certain markets in which the Funds may invest are brief
descriptions of some of the conditions and risks in each such market.
INVESTMENTS IN EMERGING MARKETS. The Emerging Markets SmallCap Dividend,
Emerging Markets High-Yielding Equity, India Earnings and Middle East Dividend
Funds invest substantially all of their assets in markets that are considered to
be "emerging." Investing in securities listed and traded in emerging markets may
be subject to additional risks associated with emerging market economies. 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. Emerging markets are generally less
liquid and less efficient than developed securities markets.
INVESTMENTS IN FRONTIER MARKETS. The Middle East Dividend Fund invests in
countries that are generally considered to be "frontier markets." The economies
of frontier markets included in the WisdomTree Middle East Dividend Index (i.e.,
Bahrain, Egypt, Jordan, Kuwait, Morocco, Oman, Qatar and the United Arab
Emirates) generally have lower trading volumes and greater potential for
illiquidity and price volatility than more developed markets. These markets have
a smaller number of issuers and participants and therefore may also be affected
to a greater extent by the actions of a small number of issuers and investors. A
significant change in cash flows investing in these markets could have a
substantial effect on local stock prices and, therefore, prices of Fund shares.
Investments in certain frontier market countries is restricted or controlled to
varying extents. At times, these restrictions or controls may limit or prevent
foreign investment and/or increase the investment costs and expenses of the
Fund. Frontier markets may be subject to greater political instability, threat
of war or terrorism and government intervention than more developed markets,
included many emerging market economies. Frontier markets generally are not as
correlated to global economic cycles as those of more developed countries. These
and other factors make investing in the frontier market countries significantly
riskier than investing in developed market and emerging market countries.
Certain frontier countries impose additional restrictions, such as: requiring
governmental approval prior to investments by foreign persons, limiting the
amount of investment by foreign persons in a particular issuer, limiting
investment by foreign persons to a particular class of securities of an issuer
that may have less advantageous rights than other classes, and imposing
additional taxes. For countries that require prior government approval, delays
in obtaining such approval would delay investments, and consequently the Fund
may be unable to invest in all of the securities included in the index until
such approval is final. This could increase index tracking error. Some frontier
countries may also limit investment opportunities in issuers in industries
considered essential to national interests and may require governmental approval
for the repatriation of investment income, capital or the proceeds of security
sales by foreign investors, including the Fund. Some frontier country
governments may levy certain taxes on dividend and interest income. Although in
some countries a portion of these taxes are recoverable, the non-recovered
portion of foreign withholding taxes will decrease the income generated from
investments in such countries.
Some banks are eligible foreign sub-custodians in frontier markets may have been
organized only recently or otherwise not have extensive operating experience.
There may also be legal restrictions or limitations on the ability of the Fund
to recover assets held in custody by a foreign sub-custodian, such as in cases
where the sub-custodian becomes bankrupt. Settlement systems may not be as
established as in developed markets or even emerging markets. As a result,
settlements may be delayed and cash or Fund securities may be jeopardized
because of system defects. In addition, the laws of certain countries in which
the Fund invests may require the Fund to release local
6
shares before receiving cash payment, or to make cash payment before receiving
local shares. This increases the risk of loss to the Fund.
The Fund invests in some frontier countries that use share blocking. "Share
blocking" refers to the practice of predicating voting rights related to an
issuer's securities on these securities being blocked from trading at the
custodian or sub-custodian level, for a period of time near the date of a
shareholder meeting. Such restrictions have the potential to effectively prevent
securities from being voted and from trading within a specified number of days
before, and in some cases after the shareholder meeting. Share blocking may
preclude the Fund from purchasing or selling securities for a period of time.
During the time that shares are blocked, trades in such securities will not
settle. Although practices may vary by market, a blocking period may last from
one day to several weeks. Once blocked, the block may be removed only by
withdrawing a previously cast vote or abstaining from voting completely, a
process that may be burdensome. In certain countries, the block cannot be
removed. Share blocking may impose operational difficulties on the Fund,
including the potential effect that a block would have on pending trades. Share
blocking may cause pending trades to fail or remain unsettled for an extended
period of time. Fails may also expose the transfer agent and the Fund to
situations in which counterparty may have the right to go to market, buy a
security at the current market price and have any additional expense borne by
the Fund or transfer agent if the counterparty is unable to deliver shares after
a certain period of time. The Adviser, on behalf of the Fund, reserves the right
to abstain from voting proxies in share blocking proxy markets. These and other
factors could have a negative impact on Fund performance.
INVESTMENTS IN AUSTRALIA. Certain of the International Funds may invest in
companies organized and listed in Australia. The Pacific ex-Japan Total Dividend
Fund and the Pacific ex-Japan High-Yielding Equity Fund generally invest a
relatively large percentage of their assets in companies organized in Australia.
The economy of Australia is heavily dependent on the demand for natural
resources and agricultural products. Conditions that weaken demand for such
products worldwide could have a negative impact on the Australian economy as a
whole. These and other factors could have a negative impact on a Fund's
performance.
INVESTMENTS IN BRAZIL. Certain of the International Funds may invest in
companies organized and listed in Brazil. Investing in securities of Brazilian
companies involves certain considerations not typically associated with
investing in securities of United States companies or the United States
government, including (i) investment and repatriation controls, which could
affect the Fund's ability to operate, and to qualify for the favorable tax
treatment afforded to regulated investment companies for U.S. Federal income tax
purposes, (ii) fluctuations in the rate of exchange between the Brazilian Real
and the U.S. Dollar, (iii) the generally greater price volatility and lesser
liquidity that characterize Brazilian securities markets, as compared with U.S.
markets, (iv) the effect that a trade deficit could have on economic stability
and the Brazilian government's economic policy, (v) high rates of inflation,
(vi) governmental involvement in and influence on the private sector, (vii)
Brazilian accounting, auditing and financial standards and requirements, which
differ from those in the United States, and (viii) political and other
considerations, including changes in applicable Brazilian tax laws. These and
other factors could have a negative impact on a Fund's performance.
INVESTMENTS IN CANADA. Certain of the International Funds may invest in
companies organized and listed in Canada. The U.S. is Canada's largest trading
partner and foreign investor. As a result, changes to the U.S. economy may
significantly affect the Canadian economy. The economy of Canada is also heavily
dependent on the demand for natural resources and agricultural products.
Conditions that weaken demand for such products worldwide could have a negative
impact on the Canadian economy as a whole. These and other factors could have a
negative impact on a Fund's performance.
INVESTMENTS IN CHINA AND HONG KONG. Certain of the International Funds may
invest in securities listed and traded on the Hong Kong Stock Exchange. In
addition to the aforementioned risks of investing in non-U.S. securities,
investing in securities listed and traded in Hong Kong involves special
considerations not typically associated with investing in countries with more
democratic governments or more established economies or securities markets. Such
risks may include:
(i) the risk of nationalization or expropriation of assets or confiscatory
taxation; (ii) greater social, economic and political uncertainty (including the
risk of war); (iii) dependency on exports and the corresponding importance of
international trade; (iv) the increasing competition from Asia's other low-cost
emerging economies; (v) currency
7
exchange rate fluctuations and the lack of available currency hedging
instruments; (vi) higher rates of inflation; (vii) controls on foreign
investment and limitations on repatriation of invested capital and on the Fund's
ability to exchange local currencies for U.S. dollars; (viii) greater
governmental involvement in and control over the economy; (ix) the risk that the
Chinese government may decide not to continue to support the economic reform
programs implemented since 1978 and could return to the prior, completely
centrally planned, economy; (x) the fact that China companies, particularly
those located in China, may be smaller, less seasoned and newly-organized
companies; (xi) the difference in, or lack of, auditing and financial reporting
standards which may result in unavailability of material information about
issuers, particularly in China; (xii) the fact that statistical information
regarding the economy of China may be inaccurate or not comparable to
statistical information regarding the U.S. or other economies; (xiii) the less
extensive, and still developing, regulation of the securities markets, business
entities and commercial transactions; (xiv) the fact that the settlement period
of securities transactions in foreign markets may be longer; (xv) the
willingness and ability of the Chinese government to support the Chinese and
Hong Kong economies and markets is uncertain; (xvi) the risk that it may be more
difficult, or impossible, to obtain and/or enforce a judgment than in other
countries; (xvii) the rapidity and erratic nature of growth, particularly in
China, resulting in inefficiencies and dislocations; (xviii) the risk that,
because of the degree of interconnectivity between the economies and financial
markets of China and Hong Kong, any sizable reduction in the demand for goods
from China, or an economic downturn in China, could negatively affect the
economy and financial market of Hong Kong, as well; and (ixx) the risk that
certain companies in the Fund's Index may have dealings with countries subject
to sanctions or embargoes imposed by the U.S. government or identified as state
sponsors of terrorism.
Investments in Hong Kong are also subject to certain political risks. Following
the establishment of the People's Republic of China by the Communist Party in
1949, the Chinese government renounced various debt obligations incurred by
China's predecessor governments, which obligations remain in default, and
expropriated assets without compensation. There can be no assurance that the
Chinese government will not take similar action in the future. An investment in
the Fund involves risk of a total loss. China has committed by treaty to
preserve Hong Kong's autonomy and its economic, political and social freedoms
for fifty years from the July 1, 1997 transfer of sovereignty from Great Britain
to China. However, if China would exert its authority so as to alter the
economic, political or legal structures or the existing social policy of Hong
Kong, investor and business confidence in Hong Kong could be negatively
affected, which in turn could negatively affect markets and business
performance. These and other factors could have a negative impact on a Fund's
performance.
INVESTMENTS IN INDIA. The India Earnings Fund, Emerging Markets High-Yielding
Equity Fund and Emerging Markets SmallCap Dividend Fund invest in securities
listed and traded in India. Investments in India may be more volatile and less
liquid and may offer higher potential for gains and losses than investments in
more developed markets. Economic and political structures in India may lack the
stability of more developed nations. Unanticipated political or social
developments in India and surrounding regions may affect the value of a Fund's
investments and the value of Fund shares. Although the government has recently
begun to institute economic reform policies, there can be no assurance that they
will continue to pursue such policies or, if they do, that such policies will
succeed. Monsoons and other natural disasters in India and surrounding regions
also can affect the value of Fund investments.
The laws relating to limited liability of corporate shareholders, fiduciary
duties of officers and directors, and the bankruptcy of state enterprises are
generally less well developed than or different from such laws in the United
States. It may be more difficult to obtain a judgment in Indian courts than it
is in the United States.
The market for securities in India may be less liquid and transparent than the
markets in more developed countries. In addition, strict restrictions on foreign
investment may decrease the liquidity of a Fund's portfolio or inhibit the
Fund's ability to achieve its investment objective. A Fund may be unable to buy
or sell securities or receive full value for such securities. Settlement of
securities transactions in the Indian subcontinent are subject to risk of loss,
may be delayed and are generally less efficient than in the United States. In
addition, disruptions due to work stoppages and trading improprieties in these
securities markets have caused such markets to close. If extended closings were
to occur in stock markets where the Fund was heavily invested, a Fund's ability
to redeem Fund shares could become correspondingly impaired. Each of these
events could have a negative impact on the liquidity and value of the Fund's
investments. To mitigate these risks, a Fund may maintain a higher cash position
than it
8
otherwise would, or a Fund may have to sell more liquid securities which it
would not otherwise choose to sell, possibly diluting its return and inhibiting
its ability to track its Index.
In recent years, exchange-listed companies in the technology sector and related
sectors (such as software) have grown so as to represent a significant portion
of the total capitalization of the Indian market. The value of these companies
will generally fluctuate in response to technological and regulatory
developments. The stock markets in the region are undergoing a period of growth
and change, which may result in trading or price volatility and difficulties in
the settlement and recording of transactions, and in interpreting and applying
the relevant laws and regulations. The securities industries in these countries
are comparatively underdeveloped, and stockbrokers and other intermediaries may
not perform as well as their counterparts in the United States and other more
developed securities markets. In some cases, physical delivery of securities in
small lots has been required in India and a shortage of vault capacity and
trained personnel has existed among qualified custodial Indian banks. These and
other factors could have a negative impact on a Fund's performance.
INVESTMENTS IN FRANCE. Certain of the International Funds may invest in
companies organized and listed in France. France is a member of the European
Economic and Monetary Union ("EMU"). EMU member countries share coordinated
economic policies and a common currency. As a result, the economy of France may
be significantly affected by changes in the economies of the EMU members or
other European countries. These and other factors could have a negative impact
on a Fund's performance.
INVESTMENTS IN GERMANY. Certain of the International Funds may invest in
companies organized and listed in Germany. Germany is a member of the EMU. EMU
member countries share coordinated economic policies and a common currency. As a
result, the economy of Germany may be significantly affected by changes in the
economies of the EMU members or other European countries. Challenges related to
the rebuilding of infrastructure and unemployment in the former area of East
Germany may also impact the economy of Germany. These and other factors could
have a negative impact on a Fund's performance.
INVESTMENTS IN JAPAN. Certain of the international Funds may invest in companies
organized and listed in Japan. The Japanese economy is characterized by
government intervention and protectionism, an unstable financial services
sector, and relatively high unemployment. Economic growth is heavily dependent
on international trade, government support and consistent government policy.
Slowdowns in the economies of key trading partners such as the United States,
China and countries in Southeast Asia could have a negative impact on the
Japanese economy as a whole. These and other factors could have a negative
impact on a Fund's performance.
INVESTMENTS IN THE MIDDLE EAST. The Middle East Dividend Fund invests in
companies organized and listed in Bahrain, Egypt, Jordan, Kuwait, Morocco, Oman,
Qatar and the United Arab Emirates. Countries in the Middle East may be affected
by political instability, war or the threat of war, regional instability,
terrorist activities and religious, ethnic and/or socioeconomic unrest. Markets
in the Middle East generally have lower trading volumes and greater potential
for illiquidity and price volatility than more developed markets. These markets
also have a smaller number of issuers and participants and therefore may also be
affected to a greater extent by the actions of a small number of issuers and
investors. A significant change in cash flows investing in these markets could
have a substantial effect on local stock prices. Some Middle Eastern countries
prohibit or impose substantial restrictions on investments in their capital
markets, particularly their equity markets, by foreign entities such as the
Fund. For example, certain countries may require governmental approval prior to
investment by foreign persons or limit the amount of investment by foreign
persons in a particular issuer. They may also limit the investment by foreign
persons to only a specific class of securities of an issuer that may have less
advantageous terms (including price) than securities of the issuer available for
purchase by nationals. The manner in which foreign investors may invest in
companies in certain Middle Eastern, as well as limitations on those
investments, may have an adverse impact on the operations of the Fund. For
example, the Fund may be required in certain of these countries to invest
initially through a local broker or other entity and then have the shares that
were purchased re-registered in the name of the Fund. Re-registration in some
instances may not be possible on a timely basis. This may result in a delay
during which the Fund may be denied certain of its rights as in investor,
including rights as to dividends or to be made aware of certain corporate
actions. The legal systems in certain Middle Eastern countries may have an
adverse impact on the Fund. For example, the potential liability of a
shareholder in a U.S. corporation with respect to acts of the corporation
generally is limited to the amount of the shareholder's investment. However, the
notion of limited
9
liability is less clear in certain Middle Eastern countries. The Fund therefore
may be liable in certain Middle Eastern countries for the acts of a corporation
in which it invests for an amount greater than the Fund's actual investment in
that corporation. Similarly, the rights of investors in Middle Eastern issuers
may be more limited than those of shareholders of a U.S. corporation. It may be
difficult or impossible to obtain and/or enforce a judgment in a Middle Eastern
country. These and other factors could have a negative impact on Fund
performance.
INVESTMENTS IN SINGAPORE. Certain of the International Funds may invest in
companies organized and listed in Singapore. The economy of Singapore is heavily
dependent on international trade and export. Conditions that weaken demand for
such products worldwide or in the Asian region could have a negative and
significant impact on the Singaporean economy as a whole. In addition, the
economy of Singapore may be particularly vulnerable to external market changes
because of its smaller size. These and other factors could have a negative
impact on a Fund's performance.
INVESTMENTS IN SOUTH AFRICA. The Emerging Markets High-Yielding Equity and
Emerging Markets SmallCap Dividend Funds may invest in companies organized and
listed in South Africa. Although South Africa is a developing country with a
solid economic infrastructure (in some regards rivaling other developed
countries) certain issues, such as unemployment, access to healthcare, limited
economic opportunity, and other financial constraints, continue to present
obstacles towards full economic development. There can be no assurance that
initiatives by the government to address these issues will achieve the desired
results. South Africa's currency may be vulnerable to devaluation. These and
other factors could have a negative impact on a Fund's performance.
INVESTMENTS IN SOUTH KOREA. The Emerging Markets High-Yielding Equity and
Emerging Markets SmallCap Dividend Funds may invest in companies organized and
listed in South Korea. The economy of South Korea is heavily dependent on
exports and the demand for certain finished goods. South Korea's main industries
include electronics, automobile production, chemicals, shipbuilding, steel,
textiles, clothing, footwear, and food processing. Conditions that weaken demand
for such products worldwide or in other Asian countries could have a negative
impact on the South Korean economy as a whole. Relations with North Korea could
also have a significant impact on the economy of South Korea. These and other
factors could have a negative impact on a Fund's performance.
INVESTMENTS IN TAIWAN. The Emerging Markets High-Yielding Equity and Emerging
Markets SmallCap Dividend Funds may invest in companies organized and listed in
Taiwan. The economy of Taiwan is heavily dependent on exports. Currency
fluctuations, increasing competition from Asia's other emerging economies, and
conditions that weaken demand for Taiwan's export products worldwide could have
a negative impact on the Taiwanese economy as a whole. Concerns over Taiwan's
history of political contention and its current relationship with China may also
have a significant impact on the economy of Taiwan. These and other factors
could have a negative impact on a Fund's performance.
INVESTMENTS IN THE UNITED KINGDOM. Certain of the International Funds invest in
companies organized and listed in the United Kingdom. The United Kingdom has one
of the largest economies in Europe and trades heavily with other European
countries. The economy of the United Kingdom may be impacted by changes to the
economic health of other European countries. These and other factors could have
a negative impact on a Fund's performance.
DEPOSITARY RECEIPTS. To the extent a Fund invests in stocks of foreign
corporations, a Fund's investment in such stocks may also be in the form of
Depositary Receipts or other 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. American
Depositary Receipts ("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. Global Depositary
Receipts ("GDRs") are receipts issued throughout the world 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. Depositary Receipts
will not necessarily be denominated in the same currency as their underlying
securities.
10
A Fund will not 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, a 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.
CURRENCY TRANSACTIONS. The Funds may enter into foreign currency forward and
foreign currency futures contracts to facilitate local securities settlements or
to protect against currency exposure in connection with distributions to
shareholders. The Funds do not expect to engage in currency transactions for the
purpose of hedging against declines in the value of a Fund's assets that are
denominated in one or more foreign currencies. The Funds may not enter into such
contracts for speculative purposes.
FORWARD FOREIGN CURRENCY TRANSACTIONS. A forward foreign currency exchange
contract ("forward contract") involves an obligation to purchase or sell a
specific currency at a future date, which may be any fixed number of days from
the date of the contract agreed upon by the parties, at a price set at the time
of the contract. These contracts are principally traded in the interbank market
conducted directly between currency traders (usually large, commercial banks)
and their customers. A forward contract generally has no margin deposit
requirement, and no commissions are charged at any stage for trades.
FOREIGN CURRENCY FUTURES CONTRACTS. A foreign currency futures contract is a
contract involving an obligation to deliver or acquire the specified amount of a
specific currency, at a specified price and at a specified future time. Futures
contracts may be settled on a net cash payment basis rather than by the sale and
delivery of the underlying currency.
Foreign exchange transactions involve a significant degree of risk and the
markets in which foreign exchange transactions are effected are highly volatile,
highly specialized and highly technical. Significant changes, including changes
in liquidity and prices, can occur in such markets within very short periods of
time, often within minutes. Foreign exchange trading risks include, but are not
limited to, exchange rate risk, maturity gap, interest rate risk, and potential
interference by foreign governments through regulation of local exchange
markets, foreign investment or particular transactions in foreign currency. If a
Fund utilizes foreign exchange transactions at an inappropriate time, such
transactions may not serve their intended purpose of improving the correlation
of a Fund's return with the performance of its underlying Index and may lower
the Fund's return. A Fund could experience losses if the value of any currency
forwards, options and futures positions is poorly correlated with its other
investments or if it could not close out its positions because of an illiquid
market. In addition, each Fund will incur transaction costs, including trading
commissions, in connection with certain foreign currency transactions.
ILLIQUID SECURITIES. Each Fund may invest up to an aggregate amount of 15% of
its net assets in illiquid securities. Illiquid securities include securities
subject to contractual or other restrictions on resale and other instruments
that lack readily available markets. The inability of a Fund to dispose of
illiquid or not readily marketable investments readily or at a reasonable price
could impair a Fund's ability to raise cash for redemptions or other purposes.
The liquidity of securities purchased by a Fund which are eligible for resale
pursuant to Rule 144A will be monitored by each Fund on an ongoing basis. In the
event that such a security is deemed to be no longer liquid, a Fund's holdings
will be reviewed to determine what action, if any, is required to ensure that
the retention of such security does not result in a Fund having more than 15% of
its assets invested in illiquid or not readily marketable securities.
FUTURES, OPTIONS AND OPTIONS ON FUTURES CONTRACTS. Each Fund may enter into U.S.
or foreign futures contracts and options and options on futures contracts. When
a Fund purchases a futures contract, it agrees to purchase a specified
underlying instrument at a specified future date. When a Fund sells a futures
contract, it agrees to sell the underlying instrument at a specified future
date. The price at which the purchase and sale will take place is fixed when the
Fund enters into the contract. Futures can be held until their delivery dates,
or can be closed out before then if a liquid secondary market is available. To
the extent a Fund uses futures and options, it will do so only in accordance
with Rule 4.5 of the Commodity Exchange Act ("CEA"). The Trust, on behalf of
each Fund, has filed a notice of eligibility for exclusion from the definition
of the term "commodity pool
11
operator" in accordance with Rule 4.5 so that each Fund is not subject to
registration or regulation as a commodity pool operator under the CEA.
RISKS OF FUTURES AND OPTIONS TRANSACTIONS. The risk of loss in trading futures
contracts or uncovered call options in some strategies (e.g., selling uncovered
stock index futures contracts) is potentially unlimited. The Funds do not plan
to use futures and options contracts in this way. The risk of a futures position
may still be large as traditionally measured due to the low margin deposits
required. In many cases, a relatively small price movement in a futures contract
may result in immediate and substantial loss or gain to the investor relative to
the size of a required margin deposit. The Funds, however, intend to utilize
futures and options contracts in a manner designed to limit their risk exposure
to levels comparable to direct investment in stocks.
Utilization of futures and options on futures by a Fund involves the risk of
imperfect or even negative correlation to the underlying Index if the index
underlying the futures contract differs from the underlying Index. There is also
the risk of loss by a Fund of margin deposits in the event of bankruptcy of a
broker with whom a Fund has an open position in the futures contract or option.
The purchase of put or call options will be based upon predictions by the Fund
as to anticipated trends, which predictions could prove to be incorrect.
The potential for loss related to the purchase of an option on a futures
contract is limited to the premium paid for the option plus transaction costs.
Because the value of the option is fixed at the point of sale, there are no
daily cash payments by the purchaser to reflect changes in the value of the
underlying contract; however, the value of the option changes daily and that
change would be reflected in the NAV of each Fund. The potential for loss
related to writing options is unlimited.
Although each Fund intends to enter into futures contracts only if there is an
active market for such contracts, there is no assurance that an active market
will exist for the contracts at any particular time.
SWAP AGREEMENTS. Swap agreements can be individually negotiated and structured
to include exposure to a variety of different types of investments or market
factors. Depending on their structure, swap agreements may increase or decrease
a Fund's exposure to long or short-term interest rates (in the United States or
abroad), foreign currency values, mortgage securities, corporate borrowing
rates, or other factors such as security prices or inflation rates. Swap
agreements can take many different forms and are known by a variety of names.
Swap agreements will tend to shift a Fund's investment exposure from one type of
investment to another. For example, if the Fund agreed to exchange payments in
dollars for payments in foreign currency, the swap agreement would tend to
decrease the Fund's exposure to U.S. interest rates and increase its exposure to
foreign currency and interest rates. Caps and floors have an effect similar to
buying or writing options. Depending on how they are used, swap agreements may
increase or decrease the overall volatility of a Fund's investments and its
share price.
Swap agreements also may allow a Fund to acquire or reduce credit exposure to a
particular issuer. The most significant factor in the performance of swap
agreements is the change in the factors that determine the amounts of payments
due to and from a Fund. If a swap agreement calls for payments by the Fund, the
Fund must be prepared to make such payments when due. If a swap counterparty's
creditworthiness declines, the risk that they may not perform may increase,
potentially resulting in a loss to the Fund. Although there can be no assurance
that the Fund will be able to do so, the Fund may be able to reduce or eliminate
its exposure under a swap agreement either by assignment or other disposition,
or by entering into an offsetting swap agreement with the same party or a
similarly creditworthy party.
PARTICIPATION CERTIFICATES. The Middle East Dividend Fund may invest in
participation certificates ("Participation Certificates") as a substitute for
investing directly in securities included in the Middle East Dividend Index.
These instruments are also referred to as "Participation Notes". Participation
Certificates are certificates or notes issued by banks or broker-dealers and are
designed to provide returns corresponding with the performance of an underlying
equity security or market. Participation Certificates are subject to the risk
that the issuer of the note will default on its obligation, in which case the
Fund could lose the entire value of its investment. The use of Participation
Certificates can increase tracking error relative to the Index. A holder of a
Participation Certificate that is linked to an underlying security may receive
any dividends paid in connection with the underlying security. However, a holder
of a Participation Certificate does not have voting rights, as the holder would
if it owned the underlying security directly. Investing in Participation
Certificate may subject the Funds to
12
counterparty risk. In addition, there can be no assurance that the trading price
of a Participation Certificate will be equal to the underlying value of the
company or market that it seeks to replicate. The Fund will be relying on the
creditworthiness of the counterparty issuing the Participation Certificate and
would lose its investment if such counterparty became insolvent. The Fund will
have no rights against the issuer of the underlying security. A Participation
Certificate may also include transaction costs in addition to those applicable
to a direct investment in securities. The markets on which the Participation
Certificates are traded may be less liquid than the markets for other securities
due to liquidity and transfer restrictions. The markets for Participation
Certificates typically are "over the counter" and may be less transparent than
the markets for listed securities. This may limit the availability of pricing
information and may make it more difficult for the Fund to accurately value its
investments in Participation Certificates. This may increase tracking error
relative to the Index.
TRACKING STOCKS. A tracking stock is a separate class of common stock whose
value is linked to a specific business unit or operating division within a
larger company and which is designed to "track" the performance of such business
unit or division. The tracking stock may pay dividends to shareholders
independent of the parent company. The parent company, rather than the business
unit or division, generally is the issuer of tracking stock. However, holders of
the tracking stock may not have the same rights as holders of the company's
common stock.
FUTURE DEVELOPMENTS. The Board may, in the future, authorize each Fund to invest
in securities contracts and investments other than those listed in this SAI and
in each Fund's Prospectus, provided they are consistent with the Fund's
investment objective and do not violate any investment restrictions or policies.
PROXY VOTING POLICY
The Trust has adopted as its proxy voting policies for each Fund the proxy
voting guidelines of Mellon Capital. The Trust has delegated to Mellon Capital
the authority and responsibility for voting proxies on the portfolio securities
held by each Fund. The remainder of this section discusses each Fund's proxy
voting guidelines and Mellon Capital's role in implementing such guidelines.
Mellon Capital, through their participation on The Bank of New York Mellon ("BNY
Mellon") Corporation's Proxy Policy Committee ("PPC"), have each 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, Mellon Capital seeks to act solely in the best
financial and economic interest of the applicable client. Mellon Capital will
carefully review proposals that would limit shareholder control or could affect
the value of a client's investment. It will generally oppose proposals designed
to insulate an issuer's management unnecessarily from the wishes of a majority
of shareholders. It will generally support proposals designed to provide
management with short-term insulation from outside influences so as to enable
them to bargain effectively with potential suitors and otherwise achieve
long-term goals. On questions of social responsibility where economic
performance does not appear to be an issue, Mellon Capital will attempt to
ensure that management reasonably responds to the social issues. Responsiveness
will be measured by management's efforts to address the proposal including,
where appropriate, assessment of the implications of the proposal to the ongoing
operations of the company. The PPC will pay particular attention to repeat
issues where management has failed in its commitment in the intervening period
to take actions on issues. Mellon Capital recognizes its duty to vote proxies in
the best interests of its clients. The Sub-Adviser seeks to avoid material
conflicts of interest through its participation in the PPC, which applies
detailed, pre-determined proxy voting guidelines (the "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. Further, Mellon
Capital and its affiliates engage a third party as an independent fiduciary to
vote all proxies for BNY Mellon securities and affiliated mutual fund
securities.
All proxy voting proposals are reviewed, categorized, analyzed and voted in
accordance with the Voting Guidelines. These guidelines are reviewed
periodically and updated as necessary to reflect new issues and any changes in
our policies on specific issues. Items that can be categorized under the Voting
Guidelines will be voted in accordance with any applicable guidelines or
referred to the PPC, if the applicable guidelines so require. Proposals that
cannot be categorized under the Voting Guidelines will be referred to the PPC
for discussion and vote. Additionally, the PPC may review any proposal where it
has identified a particular company, industry or issue for special scrutiny.
With
13
regard to voting proxies of foreign companies, Adviser weighs the cost of
voting, and potential inability to sell the securities (which may occur during
the voting process) against the benefit of voting the proxies to determine
whether or not to vote.
In evaluating proposals regarding incentive plans and restricted stock plans,
the PPC typically employs a shareholder value transfer model. This model seeks
to assess the amount of shareholder equity flowing out of the company to
executives as options are exercised. After determining the cost of the plan, the
PPC evaluates whether the cost is reasonable based on a number of factors,
including industry classification and historical performance information. The
PPC generally votes against proposals that permit the repricing or replacement
of stock options without shareholder approval or that are silent on repricing
and the company has a history of repricing stock options in a manner that the
PPC believes is detrimental to shareholders.
Mellon Capital will furnish a copy of its Proxy Voting Policy, any related
procedures, and its Voting Guidelines to each advisory client upon request. Upon
request, Sub-Adviser will also disclose to an advisory client the proxy voting
history for its account after the shareholder meeting has concluded.
A complete copy of the Proxy Voting Policy may be obtained by writing to: Judy
Manion at 500 Grant Street, Suite 2600, Pittsburgh, PA 15258.
The Trust is required to disclose annually the Funds' complete proxy voting
record on Form N-PX covering the period from July 1 of one year through June 30
of the next and to file N-PX with the SEC no later than August 31 of each year.
The current Form N-PX for the Funds is available at no charge upon request by
calling 866-909-9473 or through the Trust's website at www.wisdomtree.com. The
Funds' Form N-PX is also available on the SEC's website at www.sec.gov.
PORTFOLIO HOLDING 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 Funds, including the Adviser and any Sub-Adviser
(together, the "Advisers"). The Policy is designed to ensure that the disclosure
of information about each Fund's portfolio holdings is consistent with
applicable legal requirements and otherwise in the best interest of each Fund.
As exchange traded funds, information about each Fund's portfolio holdings is
made available on a daily basis in accordance with the provisions of any Order
of the Securities and Exchange Commission ("SEC") applicable to the Funds,
regulations of the Funds' Listing Exchange and other applicable SEC regulations,
orders and no-action relief. Such information typically reflects all or a
portion of a Fund's anticipated portfolio holdings as of the next Business 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.
Each Fund may disclose on the Funds' website at the start of each Business Day
the identities and quantities of the securities and other assets held by each
Fund that will form the basis of the Fund's calculation of its NAV on that
Business Day. The portfolio holdings so disclosed will be based on information
as of the close of business on the prior Business Day and/or trades that have
been completed prior to the opening of business on that Business Day and that
are expected to settle on that Business Day.
Daily access to each Fund's portfolio holdings is permitted to personnel of the
Advisers, the Funds' distributor and the Funds' 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 Funds. The Funds' Chief Compliance Officer may authorize
disclosure of portfolio holdings.
Each Fund may disclose its complete portfolio holdings or a portion of its
portfolio holdings online at www.wisdomtree.com. Online disclosure of such
holdings is publicly available at no charge.
Each Fund will disclose its complete portfolio holdings schedule in public
filings with the SEC on a quarterly basis, based on the Fund's fiscal year,
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.
14
No person is authorized to disclose a Fund's portfolio holdings or other
investment positions except in accordance with the Policy. The Trust's Board
reviews the implementation of the Policy on a periodic basis.
DESCRIPTION OF THE WISDOMTREE INDEXES
Brief descriptions of the Indexes on which the Funds are based and the equity
markets in which the Funds invest are provided below. Additional information
about each Index, including the components and weightings of the Indexes, as
well as the rules that govern inclusion and weighting in each of the Indexes is
available at www.wisdomtree.com.
Component Selection Criteria. In order to be included in one of the WisdomTree
Dividend Indexes, a company must pay regular cash dividends on shares of its
common stock. Companies must also meet certain liquidity requirements. For
example, a company generally must have a minimum market capitalization of $100
million as of the Index measurement date (defined below) and have an average
daily dollar volume traded of at least $100,000 for the three months prior to
the Index measurement date. Some Indexes have higher minimum capitalization and
liquidity requirements. To be included in one of the U.S. Dividend Indexes, a
company must be incorporated in the United States (including Puerto Rico), and
must list its shares on the New York Stock Exchange ("NYSE"), American Stock
Exchange ("AMEX") or the NASDAQ. To be included in one of the non-U.S. Indexes,
a company must list its shares on a major non-U.S. stock exchange and be
organized outside of the United States. Common stocks, real estate investment
trusts, tracking stocks, and holding companies are eligible for inclusion in
each Index. Limited partnerships, limited liability companies, mortgage REITS,
royalty trusts, preferred stocks, closed-end funds, exchange-traded funds, PFICs
and derivative securities, such as warrants and rights, are not eligible (though
PFICs are eligible to be included in the International Real Estate Fund).
In order to be included in one of the WisdomTree Domestic Earnings Indexes, a
company must: (i) be incorporated in the United States (including Puerto Rico),
(ii) be listed on the NYSE, AMEX or NASDAQ, (iii) have generated positive
earnings on a cumulative basis in their most recent four fiscal quarters
preceding the Index measurement date, (iv) have a market capitalization of at
least $100 million on the Index measurement date, (v) have an average daily
dollar volume of at least $200,000 for each of the six months prior to the Index
measurement date, and (vi) have a price to earnings ratio ("P/E ratio") of at
least 2 as of the Index measurement date. Companies are weighted in the Index
based on their earnings over their most recent four fiscal quarters preceding
the Index measurement date. For these purposes, "earnings" are determined using
a company's "Core Earnings." Core Earnings is a standardized calculation of
earnings developed by S&P that is designed to include expenses, incomes and
activities that reflect the actual profitability of a company's ongoing
operations. Common stocks, tracking stocks, and holding companies are eligible
for inclusion. REITs, ADRs, GDRs and EDRs are excluded, as are limited
partnerships, limited liability companies, royalty trusts, preferred stocks,
closed-end funds, exchange-traded funds, and derivative securities, such as
warrants and rights, are not eligible. The WisdomTree India Earnings Index uses
a slightly differently approach from the Domestic Earnings Indexes and is
described below.
Annual Index Reconstitution. The WisdomTree Indexes are "reconstituted" on an
annual basis. New securities are added to the Indexes only during the "annual
reconstitution." The annual reconstitution of the Domestic Dividend and Earnings
Indexes takes place at the end of November and the beginning of December each
year. The annual reconstitution of the International Indexes takes place at the
end of June and the beginning of July each year, except that the annual
reconstitution of the WisdomTree India Earnings Index takes place at the end of
August and the beginning of September each year.
During the annual reconstitution, securities are screened to determine whether
they comply with WisdomTree's proprietary Index methodology and are eligible to
be included in an Index. This date is sometimes referred to as the "Index
measurement date" or the "Screening Point." Based on this screening, securities
that meet Index requirements are added to the applicable Index and securities
that do not meet such requirements are dropped from the applicable Index. A
"preliminary Index" is made publicly available based on this information. The
"Weighting Date" is the date when the final weights of each component security
of each Index are established. This is determined after the close of trading on
the third Wednesday of December for the Domestic Dividend and Earnings Indexes
and after the close of trading on the third Wednesday of June for the
International Indexes. The final index constituents and their respective
weightings are made publicly available at this time. The final Index
constituents
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and final constituent weightings go into effect immediately before the opening
of trading on the Monday following the Weighting Date. This is sometimes
referred to as the "Reconstitution Date."
Index Maintenance. Index maintenance occurs throughout the year and includes
monitoring and implementing the adjustments for company additions and deletions,
stock splits, corporate restructurings and other corporate actions. Corporate
actions are generally implemented after the close of trading on the day prior to
the ex-date of such corporate actions. To the extent reasonably practicable,
such changes will be announced at least two days prior to their implementation.
Should any company achieve a weighting equal or greater than 24% of an Index,
its weighting will be reduced at the close of the current calendar quarter and
other components in the Index will be rebalanced. Moreover, should the
collective weight of Index component securities whose individual current weights
equal or exceed 5% of an Index, when added together, exceed 50% of such Index,
the weightings in those component securities will be reduced so that their
collective weight equals 40% of the Index as of the close of the current
calendar quarter, and other components in the Index will be rebalanced.
Index Availability. Each WisdomTree Index is calculated and disseminated
throughout each day the NYSE is open for trading.
Changes to the Index Methodology. The WisdomTree Indexes are governed by a
published, rules-based methodology. Changes to the methodology will be publicly
disclosed at www.wisdomtreeindexes.com prior to implementation. Sixty (60) days
prior notice will be given prior to the implementation of any such change.
Index Calculation Agent. In order to minimize any potential for conflicts caused
by the fact that WisdomTree Investments and its affiliates act as Index provider
and investment adviser to the Funds, WisdomTree Investments has retained an
unaffiliated third party to calculate each Index (the "Calculation Agent"). The
Calculation Agent, using the rules-based methodology, will calculate, maintain
and disseminate the Indexes on a daily basis. WisdomTree Investments will
monitor the results produced by the Calculation Agent to help ensure that the
Indexes are being calculated in accordance with the rules-based methodology. In
addition, WisdomTree Investments and WisdomTree Asset Management have
established policies and procedures designed to prevent non-public information
about pending changes to the Indexes from being used or disseminated in an
improper manner. Furthermore, WisdomTree Investments and WisdomTree Asset
Management have established policies and procedures designed to prevent improper
use and dissemination of non-public information about the Funds' portfolio
strategies and to prevent the Funds' portfolio managers from having any
influence on the construction of the Index methodology.
WISDOMTREE DOMESTIC DIVIDEND INDEXES
WisdomTree Dividend Index
Number of Components: approximately 1450
Index Description. The WisdomTree Dividend Index measures the performance of
U.S. companies that pay regular cash dividends on shares of their common stock.
Each Domestic Dividend Index is derived from the WisdomTree Dividend Index.
WisdomTree High-Yielding Equity Index
Number of Components: approximately 400
Index Description. The WisdomTree High-Yielding Equity Index measures the
performance of the highest yielding stocks within the WisdomTree Dividend Index
that meet specified requirements as of the Index measurement date. The Index is
created by selecting from the WisdomTree Dividend Index those companies with
market capitalizations of at least $200 million and average daily trading
volumes of at least $200,000 for the three months prior to the Index measurement
date. The top 30% of these companies ranked by dividend yield are included in
the Index. Companies are weighted in the Index based on their projected cash
dividends as of the Index measurement date. The Index includes
large-capitalization, mid-capitalization and small-capitalization securities.
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WisdomTree LargeCap Dividend Index
Number of Components: approximately 300
Index Description. The WisdomTree LargeCap Dividend Index measures performance
of companies that pay regular cash dividends from the large-capitalization
segment of the WisdomTree Dividend Index. The Index consists of the 300
companies in the WisdomTree Dividend Index with the highest market
capitalizations as of the Index measurement date. Companies in the Index are
weighted based on their projected cash dividends as of the Index measurement
date. The Index consists of large-capitalization securities.
WisdomTree Dividend Top 100 Index
Number of Components: approximately 100
Index Description. The WisdomTree Dividend Top 100 Index measures the
performance of the 100 highest dividend-yielding companies in the WisdomTree
LargeCap Dividend Index. Unlike other WisdomTree Domestic Indexes, which weight
index components based on projected cash dividends, a component's weight in the
Index is based on its indicated annual dividend yield as of the Index
measurement date. Indicated annual dividend yield is calculated by annualizing
the most recently declared regular cash dividend per share and dividing the
amount by the stock price. A component company's weight in the Index is
determined by dividing its indicated annual dividend yield by the sum of all the
indicated annual dividend yields for all the component companies in the Index.
The Index consists of approximately 100 large-capitalization securities.
WisdomTree MidCap Dividend Index
Number of Components: approximately 425
Index Description. The WisdomTree MidCap Dividend Index measures the performance
of companies that pay regular cash dividends from the mid-capitalization segment
of the WisdomTree Dividend Index. The Index is created by first removing the 300
companies with the highest market capitalizations as of the Index measurement
date from the WisdomTree Dividend Index. Those companies that comprise the top
75% of the remaining market capitalization of the WisdomTree Dividend Index as
of the Index measurement date are included in the WisdomTree MidCap Index.
Companies are weighted in the Index based on their projected cash dividends as
of the Index measurement date. The Index includes primarily mid-capitalization
securities.
WisdomTree SmallCap Dividend Index
Number of Components: approximately 725
Index Description. The WisdomTree SmallCap Dividend Index measures the
performance of companies that pay regular cash dividends from the
small-capitalization segment of the WisdomTree Dividend Index. The Index is
created by first removing the 300 companies with the highest market
capitalizations as of the Index measurement date from the WisdomTree Dividend
Index. Those companies that comprise the bottom 25% of the remaining market
capitalization of the Dividend Index as of the Index measurement date are
included in the WisdomTree SmallCap Index. Companies are weighted in the Index
based on their projected cash dividends as of the Index measurement date. The
Index includes primarily small-capitalization securities.
WISDOMTREE EARNINGS INDEXES
WisdomTree Earnings Index
Number of Components: approximately 2350
Index Description. The WisdomTree Earnings Index is a fundamentally weighted
index that measures the performance of earnings-generating companies within the
broad U.S. stock market. The Index consists of companies that: (i) are
incorporated in the United States (including Puerto Rico), (ii) are listed on
the NYSE, AMEX, NASDAQ Global Select, or NASDAQ Global Market (the "NASDAQ
Market"), (iii) have generated positive earnings on a cumulative basis in their
most recent four fiscal quarters preceding the Index measurement date, (iv) have
a market capitalization of at least $100 million on the Index measurement date,
(v) have an average daily dollar volume of at least $200,000 for each of the six
months prior to the Index measurement date, and (vi) have a price to earnings
ratio ("P/E ratio") of at least 2 as of the Index measurement date. Companies
are weighted in the Index based on their earnings over their most recent four
fiscal quarters preceding the Index measurement date. For these purposes,
"earnings" are determined using a company's "Core Earnings." Core Earnings is a
17
standardized calculation of earnings developed by S&P that is designed to
include expenses, incomes and activities that reflect the actual profitability
of a company's ongoing operations. Companies are weighted in the Index based on
their earnings over the four quarters preceding the Index measurement date. The
Index includes large-capitalization, mid-capitalization and small-capitalization
securities and is, in this sense, an earnings-weighted index for the broad U.S.
market.
WisdomTree Earnings 500 Index
Number of Components: approximately 500
Index Description. The WisdomTree Earnings 500 Index is a fundamentally weighted
index that measures the performance of earnings-generating companies within the
large-capitalization segment of the U.S. stock market. The Index consists of the
500 largest companies ranked by market capitalization in the WisdomTree Earnings
Index as of the Index measurement date. Companies are weighted in the Index
based on their earnings over their most recent four fiscal quarters preceding
the Index measurement date. For these purposes, "earnings" are determined using
a company's "Core Earnings." Core Earnings is a standardized calculation of
earnings developed by Standard & Poor's that is designed to include expenses,
incomes and activities that reflect the actual profitability of a company's
ongoing operations. The Index includes primarily large-capitalization
securities.
WisdomTree MidCap Earnings Index
Number of Components: approximately 785
Index Description. The WisdomTree MidCap Earnings Index is a fundamentally
weighted index that measures the performance of earnings-generating companies
within the mid-capitalization segment of the U.S. stock market. The Index is
created by first removing the 500 companies with the highest market
capitalizations as of the Index measurement date from the WisdomTree Earnings
Index. Those companies that comprise the top 75% of the remaining market
capitalization of the WisdomTree Earnings Index are included in the WisdomTree
MidCap Earnings Index. For these purposes, Companies are weighted in the Index
based on their earnings over their most recent four fiscal quarters preceding
the Index measurement date. For these purposes, "earnings" are determined using
a company's "Core Earnings." Core Earnings is a standardized calculation of
earnings developed by Standard & Poor's that is designed to include expenses,
incomes and activities that reflect the actual profitability of a company's
ongoing operations. The Index includes primarily mid-capitalization securities.
WisdomTree SmallCap Earnings Index
Number of Components: approximately 1080
Index Description. The WisdomTree SmallCap Earnings Index is a fundamentally
weighted index that measures the performance of earnings-generating companies
within the small-capitalization segment of the U.S. stock market. The Index is
created by first removing the 500 companies with the highest market
capitalizations as of the Index measurement date from the WisdomTree Earnings
Index. Those companies that comprise the bottom 25% of the remaining market
capitalization of the WisdomTree Earnings Index are included in the WisdomTree
SmallCap Earnings Index. Companies are weighted in the Index based on their
earnings over their most recent four fiscal quarters preceding the Index
measurement date. For these purposes, "earnings" are determined using a
company's "Core Earnings." Core Earnings is a standardized calculation of
earnings developed by Standard & Poor's that is designed to include expenses,
incomes and activities that reflect the actual profitability of a company's
ongoing operations. The Index includes primarily small-capitalization
securities.
WisdomTree Earnings Top 100 Index
Number of Components: approximately 100
Index Description. The WisdomTree Earnings Top 100 Index is a fundamentally
weighted Index that measures the performance of 100 large-cap companies with
relatively high earnings yields. The Index is created by selecting the 100
companies with the highest earnings yields from the 300 largest companies within
the WisdomTree Earnings 500 Index. Unlike the other Earnings Indexes which
weight companies based on aggregate earnings, the Index is weighted by earnings
yield. A component company's weight in the Index at the Index measurement date
is determined by its earnings yield. Earnings yield is calculated by dividing a
company's trailing 12 months earnings
18
by its market capitalization. This amount is then divided by the sum of all
earnings yields for all the component companies in the Index. For these
purposes, "earnings" are determined using a company's "Core Earnings." Core
Earnings is a standardized calculation of earnings developed by Standard &
Poor's that is designed to include expenses, incomes and activities that reflect
the actual profitability of a company's ongoing operations. The Index includes
primarily large-capitalization securities.
WisdomTree Low P/E Index
Number of Components: approximately 700
Index Description. The WisdomTree Low P/E Index is a fundamentally weighted
index that measures the performance of companies with the lowest
price-to-earnings ratios ("P/E ratios") within the WisdomTree Earnings Index
that meet certain requirements. To be included in the Low P/E Index, companies
must have market capitalizations of at least $200 million as of the Index
measurement date. On the Index measurement date companies that meet these
requirements are ranked by P/E ratio. Those companies with the lowest P/E ratios
are ranked highest. The top 30% of these companies are included in the Index.
Companies are weighted in the Index based on their earnings over the four
quarters preceding the Index measurement date. For these purposes, "earnings"
are determined using a company's "Core Earnings." Core Earnings is a
standardized calculation of earnings developed by Standard & Poor's that is
designed to include expenses, incomes and activities that reflect the actual
profitability of a company's ongoing operations. The Index includes primarily
large-capitalization securities.
WisdomTree India Earnings Index
Number of Components: approximately 150
The WisdomTree India Earnings Index is a fundamentally weighted index that
measures the performance of profitable companies incorporated and traded in
India that are eligible to be purchased by foreign investors and that meet
specific other criteria developed by WisdomTree Investments. The Index consists
of companies that: (i) are incorporated in India, (ii) are listed on a major
stock exchange in India, (iii) have generated at least $5 million in earnings in
their fiscal year prior to the Index measurement date, (iv) have a market
capitalization of at least $200 million on the Index measurement date,(v) have
an average daily dollar volume of at least $200,000 for each of the six months
prior to the Index measurement date, (vi) have traded at least 250,000 shares
per month for each of the six months prior to the index measurement date, and
(vii) have a price to earnings ratio ("P/E ratio") of at least 2 as of the Index
measurement date. Companies are weighted in the Index based on earnings in their
fiscal year prior to the Index measurement date adjusted for a factor that takes
into account shares available to foreign investors. "Earnings" are determined
using a company's reported net income. Only common stocks and holding companies,
including real estate holding companies, are eligible for inclusion in the
Index. The Index includes large-capitalization, mid-capitalization and
small-capitalization securities.
WISDOMTREE INTERNATIONAL DIVIDEND INDEXES
WisdomTree DEFA Index
Number of Components: approximately 2390
Index Description. The WisdomTree DEFA Index measures the performance of
companies in developed markets outside of the U.S. and Canada that pay regular
cash dividends on shares of common stock and that meet certain other
requirements. To be included in the WisdomTree DEFA Index, companies must be
incorporated in one of 16 developed-market European countries (Austria, Belgium,
Denmark, Finland, France, Germany, Greece, Ireland, Italy, Netherlands, Norway,
Portugal, Spain, Sweden, Switzerland, or the United Kingdom), Japan, Hong Kong,
Singapore, Australia, or New Zealand, and must be listed on a major securities
exchange in one of those countries. Companies must have paid at least $5 million
in cash dividends on their common stock as of the most recent Index measurement
date and must also satisfy specified liquidity and other requirements. Companies
are weighted in the Index based on regular cash dividends paid. The Index
includes large-capitalization, mid-capitalization and small-capitalization
securities.
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WisdomTree DEFA High-Yielding Equity Index
Number of Components: approximately 690
Index Description. The WisdomTree DEFA High-Yielding Equity Index measures the
performance of the highest dividend yielding stocks within the WisdomTree DEFA
Index that meet specified requirements as of the Index measurement date. The
Index is created by selecting from the WisdomTree DEFA Index those companies
with market capitalizations of at least $200 million and average daily dollar
trading volumes of at least $200,000 for the three months prior to the Index
measurement date. The top 30% of these companies ranked by dividend yield are
included in the Index. Companies are weighted in the Index based on regular cash
dividends paid. The Index includes large-capitalization, mid-capitalization and
small-capitalization securities.
WisdomTree Europe Dividend Index
Number of Components: approximately 1160
Index Description. The WisdomTree Europe Dividend Index measures the performance
of companies incorporated in 16 developed-market European countries that pay
regular cash dividends on shares of common stock and meet certain other
requirements. The Index is comprised of companies that are incorporated in and
have their shares of common stock listed on a major stock exchange in one of the
following countries: Austria, Belgium, Denmark, Finland, France, Germany,
Greece, Ireland, Italy, Netherlands, Norway, Portugal, Spain, Sweden,
Switzerland, or the United Kingdom. Companies must have paid at least $5 million
in cash dividends on shares of their common stock as of the most recent Index
measurement date and must also satisfy specified liquidity and other
requirements. Companies are weighted in the Index based on regular cash
dividends paid. The Index includes large-capitalization, mid-capitalization and
small-capitalization securities.
WisdomTree Europe High-Yielding Equity Index
Number of Components: approximately 330
Index Description. The WisdomTree Europe High-Yielding Equity Index measures the
performance of the highest dividend yielding stocks within the WisdomTree Europe
Dividend Index that meet specified requirements as of the Index measurement
date. The Index is created by selecting from the WisdomTree Europe Dividend
Index those companies with market capitalizations of at least $200 million and
average daily dollar trading volumes of at least $200,000 for the three months
prior to the Index measurement date. The top 30% of these companies are ranked
by dividend yield are included in the Index. Companies are weighted in the Index
based on regular cash dividends paid. The Index includes large-capitalization,
mid-capitalization and small-capitalization securities.
WisdomTree Europe SmallCap Dividend Index
Number of Components: approximately 520
Index Description. The WisdomTree Europe SmallCap Dividend Index measures the
performance of small-capitalization companies incorporated in Western Europe
that pay regular cash dividends on shares of common stock and meet specified
requirements as of the Index measurement date. The Index is created by first
removing from the WisdomTree Europe Dividend Index the 300 companies with the
highest market capitalizations as of the Index measurement date. Those companies
that comprise the bottom 25% of the remaining market capitalization of this
group are included in the WisdomTree Europe SmallCap Dividend Index. Companies
are weighted in the Index based on regular cash dividends paid. The Index
includes primarily small-capitalization securities. In this sense, it is a
dividend-weighted small-cap index for the dividend-paying segment of Western
Europe.
WisdomTree Japan Dividend Index
Number of Components: approximately 820
Index Description. The WisdomTree Japan Dividend Index measures the performance
of companies incorporated in Japan that pay regular cash dividends on shares of
common stock and meet certain other requirements. The Index is comprised of
companies incorporated in Japan that list their shares on the Tokyo Stock
Exchange. Companies must have paid at least $5 million in cash dividends on
their common stock as of the most recent Index measurement date and must also
satisfy specified liquidity and other requirements. Companies are weighted in
the Index based on regular cash dividends paid. The Index includes
large-capitalization, mid-capitalization and small-capitalization securities.
20
WisdomTree Japan High-Yielding Equity Index
Number of Components: approximately 240
Index Description. The WisdomTree Japan High-Yielding Equity Index measures the
performance of the highest dividend yielding stocks within the WisdomTree Japan
Dividend Index that meet specified requirements as of the Index measurement
date. The Index is created by selecting from the WisdomTree Japan Dividend Index
those companies with market capitalizations of at least $200 million and average
daily dollar trading volumes of at least $200,000 for three months prior to the
Index measurement date. The top 30% of these companies ranked by dividend yield
are included in the Index. Companies are weighted in the Index based on regular
cash dividends paid. The Index includes large-capitalization, mid-capitalization
and small-capitalization securities.
WisdomTree Japan SmallCap Dividend Index
Number of Components: approximately 520
Index Description. The WisdomTree Japan SmallCap Dividend Index measures the
performance of small-capitalization companies incorporated in Japan that pay
regular cash dividends on shares of common stock and meet specified requirements
as of the Index measurement date. The Index is created by first removing the 300
companies with the highest market capitalizations as of the Index measurement
date from the WisdomTree Japan Dividend Index. The remaining companies are then
weighted in the Index based on regular cash dividends paid. The Index includes
primarily small-capitalization securities. In this sense, it is a
dividend-weighted small-cap index for the dividend-paying segment of Japan.
WisdomTree Pacific ex-Japan Dividend Index
Number of Components: approximately 411
Index Description. The WisdomTree Pacific ex-Japan Dividend Index measures the
performance of companies in Hong Kong, Singapore, Australia and New Zealand that
pay regular cash dividends on shares of common stock and meet certain other
requirements. The WisdomTree Pacific ex-Japan Dividend Index is comprised of
companies that are incorporated in and have their shares listed on a major stock
exchange in Hong Kong, Singapore, Australia or New Zealand. Companies must have
paid at least $5 million in cash dividends on their common stock as of the most
recent Index measurement date and must also satisfy specified liquidity and
other requirements. Companies are weighted in the Index based on regular cash
dividends paid. The Index includes large-capitalization, mid-capitalization and
small-capitalization securities.
WisdomTree Pacific ex-Japan High-Yielding Equity Index
Number of Components: approximately 110
Index Description. The WisdomTree Pacific ex-Japan High-Yielding Equity Index
measures the performance of the highest dividend paying stocks within the
WisdomTree Pacific ex-Japan Dividend Index that meet specified requirements as
of the Index measurement date. The Index is created by selecting from the
WisdomTree Pacific ex-Japan Dividend Index those companies with market
capitalizations of at least $200 million and average daily trading volumes of at
least $200,000 for the three months prior to the measurement date. The top 30%
of these companies ranked by dividend yield are included in the Index. Companies
are weighted in the Index based on regular cash dividends paid. The Index
includes large-capitalization, mid-capitalization and small-capitalization
securities.
WisdomTree International LargeCap Dividend Index
Number of Components: approximately 300
Index Description. The WisdomTree International LargeCap Dividend Index measures
the performance of companies that pay regular cash dividends from the
large-capitalization segment of Europe, Far East Asia and Australasia. The Index
is created by selecting from the WisdomTree DEFA Index the 300 companies in the
Index with the highest market capitalizations as of the Index measurement date.
Companies are weighted in the Index based on regular cash dividends paid. The
Index includes primarily large-capitalization securities.
WisdomTree International Dividend Top 100 Index
Number of Components: approximately 100
Index Description. The WisdomTree International Dividend Top 100 Index measures
the performance of the 100 highest dividend-yielding companies from Europe, Far
East Asia and Australasia. The Index is created by selecting
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the 100 highest dividend-yielding companies from the WisdomTree International
LargeCap Dividend Index. Unlike other WisdomTree International Indexes, which
weight index components based on regular cash dividends paid, a component's
weight in the Index is based on its annual dividend yield as of the Index
measurement date. A component company's weight in the Index is determined by
dividing its indicated annual dividend yield by the sum of all the indicated
annual dividend yields for all the component companies in the Index. The Index
consists of selected large-capitalization securities.
WisdomTree International MidCap Dividend Index
Number of Components: approximately 690
Index Description. The WisdomTree International MidCap Dividend Index measures
the performance of companies that pay regular cash dividends from the
mid-capitalization segment of markets in Europe, Far East Asia and Australasia.
The Index is created by first removing from the WisdomTree DEFA Index the 300
companies with the highest market capitalizations as of the Index measurement
date. Those companies that comprise the top 75% of the remaining market
capitalization of this group are included in the WisdomTree International MidCap
Dividend Index. Companies are weighted in the Index based on regular cash
dividends paid. The Index includes primarily mid-capitalization securities.
WisdomTree International SmallCap Dividend Index
Number of Components: approximately 1400
Index Description. The WisdomTree International SmallCap Dividend Index measures
the performance of companies that pay regular cash dividends from the
small-capitalization segment of markets in Europe, Far East Asia and
Australasia. The Index is created by first removing from the WisdomTree DEFA
Index the 300 companies with the highest market capitalizations as of the Index
measurement date. Those companies that comprise the bottom 25% of the remaining
market capitalization of this group are included in the WisdomTree International
SmallCap Dividend Index. Companies are weighted in the Index based on regular
cash dividends paid. The Index includes primarily small-capitalization
securities.
WisdomTree Emerging Markets High-Yielding Equity Index
Number of Components: approximately 220
Index Description. The WisdomTree Emerging Markets High-Yielding Equity Index
measures the performance of emerging market stocks with relatively high dividend
yields. Companies in the Index must meet specified liquidity and other
requirements as of the Index measurement date. The Index is created by selecting
the top 30% of Index constituents ranked by dividend yield from the WisdomTree
Emerging Markets Dividend Index. Companies eligible for inclusion in the Index
must be incorporated in and have their shares listed on a major stock exchange
in Argentina, Brazil, Chile, China, Czech Republic, Hungary, India, Indonesia,
Israel, Malaysia, Mexico, Philippines, Poland, Russia, South Africa, South
Korea, Taiwan, Thailand or Turkey. Companies must have paid at least $5 million
in cash dividends on their common stock in the 12 months prior to the most
recent Index measurement date. Companies are weighted in the Index based on
regular cash dividends paid. The Index includes large-capitalization,
mid-capitalization and small-capitalization securities.
WisdomTree Emerging Markets SmallCap Dividend Index
Number of Components: approximately 395
Index Description. The WisdomTree Emerging Markets SmallCap Dividend Index is a
fundamentally weighted index that measures the performance of primarily small
cap stocks selected from the WisdomTree Emerging Markets Dividend Index.
Companies included in the Index fall within the bottom 10% of total market
capitalization of the WisdomTree Emerging Markets Dividend Index as of the
annual index measurement date. Companies eligible for inclusion in the Index
must be incorporated in and have their shares listed on a major stock exchange
in Argentina, Brazil, Chile, China, Czech Republic, Hungary, India, Indonesia,
Israel, Malaysia, Mexico, Philippines, Poland, Russia, South Africa, South
Korea, Taiwan, Thailand or Turkey. Companies must have paid at least $5 million
in cash dividends on their common stock in the 12 months prior to the most
recent Index measurement date. Companies are weighted in the Index based on
regular cash dividends paid. The Index is composed of primarily small
capitalization stocks.
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WisdomTree Middle East Dividend Index
Number of Components: approximately 100
Index Description. The WisdomTree Middle East Dividend Index is a fundamentally
weighted index that measures the performance of companies in the Middle East
region that pay regular cash dividends on shares of their common stock and that
meet specified requirements as of the index measurement date. Companies eligible
for inclusion in the Index must be incorporated in and have their shares listed
on a major stock exchange in Bahrain, Egypt, Jordan, Kuwait, Morocco, Oman,
Qatar, or the United Arab Emirates (including Abu Dhabi and Dubai). As of the
index measurement date, shares of companies must be eligible to be purchased by
foreign investors. Companies must have paid at least $5 million in cash
dividends on their common stock in the annual cycle prior to the most recent
index measurement date. Companies are ranked by market capitalization and the
100 largest companies by market capitalization are selected for inclusion.
Companies are weighted in the Index based on regular cash dividends paid in the
annual cycle prior to the index measurement date. Country weights are capped so
that no country's weight in the Index exceeds 33% at the annual index
measurement date.
WISDOMTREE INTERNATIONAL SECTOR INDEXES
WisdomTree International Basic Materials Sector Index
Number of Components: approximately 180
Index Description. The WisdomTree International Basic Materials Sector Index is
derived from the WisdomTree DEFA Index. The WisdomTree DEFA Index measures the
performance of companies in developed markets outside the U.S. (i.e., Europe,
Far East Asia and Australasia) that pay regular cash dividends and meet certain
other requirements. The WisdomTree International Basic Materials Sector Index
measures the performance of companies that WisdomTree Investments classifies as
being in the "Basic Materials" sector of the WisdomTree DEFA Index. Companies
are weighted in the Index based on regular cash dividends paid. The Index
includes the following types of companies: chemicals, forest products and paper,
iron/steel, and mining. The Index includes large-capitalization,
mid-capitalization and small-capitalization securities.
WisdomTree International Communications Sector Index
Number of Components: approximately 150
Index Description. The WisdomTree International Communications Sector Index is
derived from the WisdomTree DEFA Index. The WisdomTree DEFA Index measures the
performance of companies in developed markets outside the U.S. (i.e., Europe,
Far East Asia and Australasia) that pay regular cash dividends and meet certain
other requirements. The WisdomTree International Communications Sector Index
measures the performance of companies that WisdomTree Investments classifies as
being in the "Communications" sector of the WisdomTree DEFA Index. Companies are
weighted in the Index based on regular cash dividends paid. The Index includes
the following types of companies: advertising, internet, media, and telecom. The
Index includes large-capitalization, mid-capitalization and small-capitalization
securities.
WisdomTree International Consumer Discretionary Sector Index
Number of Components: approximately 425
Index Description. The WisdomTree International Consumer Discretionary Sector
Index is derived from the WisdomTree DEFA Index. The WisdomTree DEFA Index
measures the performance of companies in developed markets outside the U.S.
(i.e., Europe, Far East Asia and Australasia) that pay regular cash dividends
and meet certain other requirements. The WisdomTree International Consumer
Discretionary Sector Index measures the performance of companies that WisdomTree
Investments classifies as being in the "Consumer Discretionary" sector of the
WisdomTree DEFA Index. Companies are weighted in the Index based on regular cash
dividends paid. The Index includes the following types of companies: airlines,
apparel, automobiles and parts, entertainment, food service, home builders,
housewares, leisure time, lodging, office furnishings, retail, textiles, and
toys/games. The Index includes large-capitalization, mid-capitalization and
small-capitalization securities.
23
WisdomTree International Consumer Staples Sector Index
Number of Components: approximately 375
Index Description. The WisdomTree International Consumer Staples Sector Index is
derived from the WisdomTree DEFA Index. The WisdomTree DEFA Index measures the
performance of companies in developed markets outside the U.S. (i.e., Europe,
Far East Asia and Australasia) that pay regular cash dividends and meet certain
other requirements. The WisdomTree International Consumer Staples Sector Index
measures the performance of companies that WisdomTree Investments classifies as
being in the "Consumer Staples" sector of the WisdomTree DEFA Index. Companies
are weighted in the Index based on regular cash dividends paid. The Index
includes the following types of companies: agriculture, tobacco, beverages,
biotechnology, commercial services, cosmetics/personal care, food, health care,
pharmaceuticals, and household products. The Index includes
large-capitalization, mid-capitalization and small-capitalization securities.
WisdomTree International Energy Sector Index
Number of Components: approximately 60
Index Description. The WisdomTree International Energy Sector Index is derived
from the WisdomTree DEFA Index. The WisdomTree DEFA Index measures the
performance of companies in developed markets outside the U.S. (i.e., Europe,
Far East Asia and Australasia) that pay regular cash dividends and meet certain
other requirements. The WisdomTree International Energy Sector Index measures
the performance of companies that WisdomTree Investments classifies as being in
the "Energy" sector of the WisdomTree DEFA Index. Companies are weighted in the
Index based on regular cash dividends paid. The Index includes the following
types of companies: oil and gas producers, oil and gas services, pipelines,
alternative energy sources, and coal. The Index includes large-capitalization,
mid-capitalization and small-capitalization securities.
WisdomTree International Financial Sector Index
Number of Components: approximately 450
Index Description. The WisdomTree International Financial Sector Index is
derived from the WisdomTree DEFA Index. The WisdomTree DEFA Index measures the
performance of companies in developed markets outside the U.S. (i.e., Europe,
Far East Asia and Australasia) that pay regular cash dividends and meet certain
other requirements. The WisdomTree International Financial Sector Index measures
the performance of companies that WisdomTree Investments classifies as being in
the "Financial" sector of the WisdomTree DEFA Index. Companies are weighted in
the Index based on regular cash dividends paid. The Index includes the following
types of companies: banks, savings and loans, insurance companies, investment
companies, real estate companies, and diversified financial service companies.
The Index includes large-capitalization, mid-capitalization and
small-capitalization securities.
WisdomTree International Health Care Sector Index
Number of Components: approximately 100
Index Description. The WisdomTree International Health Care Sector Index is
derived from the WisdomTree DEFA Index. The WisdomTree DEFA Index measures the
performance of companies in developed markets outside the U.S. (i.e., Europe,
Far East Asia and Australasia) that pay regular cash dividends and meet certain
other requirements. The WisdomTree International Health Care Sector Index
measures the performance of companies that WisdomTree Investments classifies as
being in the "Health Care" sector of the WisdomTree DEFA Index. Companies are
weighted in the Index based on regular cash dividends paid. The Index includes
the following types of companies: health care products, health care services,
pharmaceuticals, and biotechnology. The Index includes large-capitalization,
mid-capitalization and small-capitalization securities.
WisdomTree International Industrial Sector Index
Number of Components: approximately 560
Index Description. The WisdomTree International Industrial Sector Index is
derived from the WisdomTree DEFA Index. The WisdomTree DEFA Index measures the
performance of companies in developed markets outside the U.S. (i.e., Europe,
Far East Asia and Australasia) that pay regular cash dividends and meet certain
other requirements. The WisdomTree International Industrial Sector Index
measures the performance of companies that WisdomTree Investments classifies as
being in the "Industrial" sector of the WisdomTree DEFA Index. Companies
24
are weighted in the Index based on regular cash dividends paid. The Index
includes the following types of companies: aerospace and defense, building
materials, electronic components and equipment, engineering and construction,
hand and machine tools, machinery, metal fabrication, packaging and containers,
shipbuilding, transportation, and trucking and leasing. The Index includes
large-capitalization, mid-capitalization and small-capitalization securities.
WisdomTree International Technology Sector Index
Number of Components: approximately 85
Index Description. The WisdomTree International Technology Sector Index is
derived from the WisdomTree DEFA Index. The WisdomTree DEFA Index measures the
performance of companies in developed markets outside the U.S. (i.e., Europe,
Far East Asia and Australasia) that pay regular cash dividends and meet certain
other requirements. The WisdomTree International Technology Sector Index
measures the performance of companies that WisdomTree Investments classifies as
being in the "Technology" sector of the WisdomTree DEFA Index. Companies are
weighted in the Index based on regular cash dividends paid. The Index includes
the following types of companies: computers, office and business equipment,
semiconductors, and software. The Index includes large-capitalization,
mid-capitalization and small-capitalization securities.
WisdomTree International Utilities Sector Index
Number of Components: approximately 70
Index Description. The WisdomTree International Utilities Sector Index is
derived from the WisdomTree DEFA Index. The WisdomTree DEFA Index measures the
performance of companies in developed markets outside the U.S. (i.e., Europe,
Far East Asia and Australasia) that pay regular cash dividends and meet certain
other requirements. The WisdomTree International Utilities Sector Index measures
the performance of companies that WisdomTree Investments classifies as being in
the "Utilities" sector of the WisdomTree DEFA Index. Companies are weighted in
the Index based on regular cash dividends paid. The Index includes the following
types of companies: gas, electric, and water. The Index includes
large-capitalization, mid-capitalization and small-capitalization securities.
WisdomTree International Real Estate Index
Number of Components: approximately 220
Index Description. The WisdomTree International Real Estate Index measures the
performance of companies in developed markets outside of the U.S. and Canada
that pay regular cash dividends on shares of common stock that WisdomTree
Investments classifies as being part of the "International Real Estate" sector.
Companies in the Index must meet specified requirements as of the Index
measurement date. To be included in the Index, companies must be incorporated in
one of 16 developed-market European countries, Japan, Hong Kong, Singapore,
Australia, or New Zealand, and must be listed on a major securities exchange in
one of those countries. Companies must have paid at least $5 million in cash
dividends on their common stock in the 12 months prior to the most recent Index
measurement date and must also satisfy specified liquidity and other
requirements. Companies are weighted in the Index based on regular cash
dividends paid. The Index includes the following types of companies: real estate
operating companies; real estate development companies; and diversified REITs.
The Index also includes companies that may be classified as PFICs.
25
INVESTMENT LIMITATIONS
The following fundamental investment policies and limitations supplement those
set forth in each Fund's Prospectus. Unless otherwise noted, whenever a
fundamental investment policy or limitation states a maximum percentage of a
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 a
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 a Fund's investment policies and limitations.
Each Fund's fundamental investment policies cannot be changed without the
approval of the holders of a majority of that Fund's outstanding voting
securities as defined under the 1940 Act. Each Fund, however, may change the
non-fundamental investment policies described below, its investment objective,
and its underlying Index 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.
Each 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 each Fund may be considered an underwriter within the meaning of the
Securities Act of 1933 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 total assets
would be invested in the securities of companies whose principal business
activities are in the same industry, except that each Fund will invest more
than 25% of its total assets in securities of the same industry to
approximately the same extent that each 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 each
Fund from purchasing or selling options and futures contracts or from
investing in securities or other instruments backed by physical commodities).
26
Loans
Lend any security or make any other loan except as permitted under the
Investment Company Act of 1940.
This means that no more than 33 1/3% of its 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 each Fund's investment
policies.
Non-Fundamental Policies. The following investment policy is not fundamental and
may be changed without shareholder approval.
Each 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 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.
If, subsequent to an investment, the 80% requirement is no longer met, a
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 Funds 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 Funds' 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 strikes 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 Funds 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.
27
MANAGEMENT OF THE TRUST
Trustees and Officers
The Board of Trustees has responsibility for the overall management and
operations of the Funds, including general supervision of the duties performed
by WisdomTree Asset Management and other service providers. The Board of
Trustees elects the officers of the Trust who are responsible for administering
the Trust's day-to-day operations. Each Trustee serves until his or her
successor is duly elected or appointed and qualified.
The address of each Trustee and Officer is c/o WisdomTree Asset Management,
Inc., 380 Madison Avenue, 21st Floor, New York, NY 10017.
Interested Trustee and Officers
Number of
Term of Portfolios
office in Fund Other
and Complex Directorships
Length Overseen Held by
of Time Principal Occupation(s) During by Trustee Trustee and
Name (year of birth) Position Served the Past 5 Years and Officers Officers
-------------------- ----------- ----------- -------------------------------------- ------------ -------------
Jonathan Steinberg Trustee, Trustee Chief Executive Officer of WisdomTree 49 None.
(1964) President* and Officer Investments, Inc. (formerly, Index
since 2005 Development Partners, Inc.) and
Director of WisdomTree Investments,
Inc. since 1989.
Amit Muni Treasurer*, Officer Chief Financial Officer and Assistant 49 None.
(1969) Assistant since 2008 Secretary of WisdomTree Investments,
Secretary* Inc. since March 2008; International
Securities Exchange Holdings, Inc.
(ISE), Controller and Chief Accounting
Officer, from 2003 to 2008.
Richard Morris Secretary*, Officer Deputy General Counsel of WisdomTree 49 None.
(1967) Chief Legal since 2005 Investments, Inc. since 2005; Senior
Officer* Counsel at Barclays Global Investors,
N.A. from 2002 to 2005.
----------
* Elected by and serves at the pleasure of the Board of Trustees.
28
Independent Trustees
Term of Number of
office Portfolios
and in Fund Other
Length Complex Directorships
of Time Principal Occupation(s) During Overseen Held by
Name (year of birth) Position Served the Past 5 Years by Trustee Trustee
-------------------- ----------- ----------- -------------------------------------- ------------ -------------
Gregory Barton Trustee Trustee General Counsel and Secretary of 49 None.
(1961)** since 2006 Martha Stewart Living Omnimedia, Inc.
since 2007; Executive Vice President
of Licensing and Legal Affairs,
General Counsel and Secretary of Ziff
Davis Media Inc. 2003 to 2007;
Executive Vice President of Legal
Affairs, General Counsel and Secretary
of Ziff Davis Media Inc. from 2002 to
2003; President (2001 to 2002), Chief
Financial Officer (2000 to 2002), Vice
President of Business Development
(1999 to 2001) and General Counsel and
Secretary (1998 to 2002) of WisdomTree
Investments, Inc. (formerly, Index
Development Partners, Inc.).
Toni Massaro Trustee Trustee Dean at University of Arizona James E. 49 None.
(1955)*** since 2006 Rogers College of Law since 1999;
Professor at University of Arizona
James E. Rogers College of Law since
1990.
Victor Ugolyn Trustee, Trustee Private Investor 2005 to present; 49 Trustee on
(1947) Chairman of since 2006 President and Chief Executive Officer Board of
the Board of William D. Witter, Inc. 2005 to Trustees of
of Trustees August 2006; Consultant to AXA Naismith
Enterprise in 2004; Chairman, Memorial
President and Chief Executive Officer Basketball
of Enterprise Capital Management Hall of Fame;
(subsidiary of The MONY Group, Inc.) Member of the
and Enterprise Group of Funds, Board of
Chairman of MONY Securities Overseers of
Corporation, and Chairman of the Fund the Hoover
Board of Enterprise Group of Funds Institution
from 1991 to 2004. at Stanford
University.
----------
** Chair of the Audit Committee.
*** Chair of the Governance and Nominating Committee.
29
The following table sets forth, as of December 31, 2007 the dollar range of
equity securities beneficially owned by each Trustee in the Funds and in other
registered investment companies overseen by the Trustee within the same family
of investment companies as the Trust.
Aggregate Dollar Range of
Equity Securities in All
Registered
Investment Companies Overseen
by Trustee in Family of
Name of Trustee Dollar Range of Equity Securities in the Funds Investment Companies
--------------------- ---------------------------------------------------------- -----------------------------
Interested Trustee:
Jonathan Steinberg International SmallCap Dividend Fund $50, 001 - $100,000
International Dividend Top 100 Fund $50, 001 - $100,000
DEFA High-Yielding Equity Fund $50, 001 - $100,000
Pacific ex-Japan Total Dividend Fund $50, 001 - $100,000
Japan High-Yielding Equity Fund $50, 001 - $100,000 Over $100,000
Independent Trustees:
Gregory Barton Total Dividend Fund Over $100,000
DEFA Fund $10,001 - $50,000 Over $100,000
Toni Massaro High-Yielding Equity Fund $1 - $10,000
DEFA High-Yielding Equity Fund $1 - $10,000 $1 - $10,000
Victor Ugolyn LargeCap Dividend Fund $10,001 - $50,000
MidCap Dividend Fund $10,001 - $50,000 $50,001 - $100,000
As of December 31, 2007 none of the Trustees who are not interested persons (as
defined in the 1940 Act) of the Trust ("Independent Trustees") or their
immediate family members owned beneficially or of record any securities of
WisdomTree Asset Management, the Sub-Adviser, the Funds' Distributor, or any
person controlling, controlled by or under control with WisdomTree Asset
Management, the Sub-Adviser or the Funds' Distributor.
The Board of Trustees of the Trust met eight times during the fiscal year ended
March 31, 2008.
Committees of the Board of Trustees
Audit Committee. Each Independent Trustee is a member of the Trust's Audit
Committee (the "Audit Committee"). The principal responsibilities of the Audit
Committee are the appointment, compensation and oversight of the Trust's
independent auditors, including the resolution of disagreements regarding
financial reporting between Trust management and such independent auditors. The
Audit Committee's responsibilities include, without limitation, to (i) oversee
the accounting and financial reporting processes of the Trust and its internal
control over financial reporting and, as the Committee deems appropriate, to
inquire into the internal control over financial reporting of certain
third-party service providers; (ii) oversee the quality and integrity of the
Funds' 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, internal control over financial reporting and independent audits;
(iv) approve prior to appointment the engagement of the Trust's independent
auditors and, in connection therewith, to review and evaluate the
qualifications, independence and performance of the Trust's independent
auditors; and (vi) act as a liaison between the Trust's independent auditors and
the full Board. The Board of the Trust has adopted a written charter for the
Audit Committee. The Audit Committee has retained independent legal counsel to
assist it in connection with these duties. During the fiscal year ended March
31, 2008, the Audit Committee held six meetings.
Governance and Nominating Committee. Each Independent Trustee is also a member
of the Trust's Governance and Nominating Committee. The principal
responsibilities of the Governance and Nominating Committee are to (i) oversee
Fund governance matters and (ii) identify individuals qualified to serve as
Independent Trustees of the Trust and to recommend its nominees for
consideration by the full Board. While the Governance and Nominating Committee
is solely responsible for the selection and nomination of the Trust's
Independent Trustees, the Nominating Committee may consider nominations for the
office of Trustee made by Trust stockholders as it deems appropriate. The
Governance and Nominating 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 stockholders 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. During the fiscal year ended March 31, 2008, the
Nominating Committee held one meeting.
30
Remuneration of Trustees. Pursuant to its Investment Advisory Agreement with the
Trust, WisdomTree Asset Management pays all compensation of officers and
employees of the Trust as well as the fees of all Trustees of the Trust who are
affiliated persons of WisdomTree Investments or its subsidiaries.
Each Independent Trustee receives annual compensation of $110,000. The Audit
Committee Chairman will be paid an additional 10% and the Independent Chairman
of the Board will be paid an additional 50% of this amount. The Trust also
reimburses each Trustee for travel and other out-of-pocket expenses incurred by
him/her in connection with attending meetings. Prior to December 2007, each
Independent Trustee received annual compensation of $40,000. The Audit Committee
Chairman received an additional 10% and the Independent Chairman received an
additional 50% of this amount.
The following table sets forth the fees paid to each Trustee for the fiscal
year-ended March 31, 2008.
Pension or Retirement
Aggregate Benefits Accrued as Estimated Annual Total Compensation
Name of Interested Compensation Part of Company Benefits upon from the Funds and
Trustee from the Trust Expenses Retirement Fund Complex
------------------- -------------- --------------------- ---------------- ------------------
Jonathan Steinberg None None None None
Pension or Retirement
Aggregate Benefits Accrued as Estimated Annual Total Compensation
Name of Independent Compensation Part of Company Benefits upon from the Funds and
Trustee from the Trust Expenses Retirement Fund Complex
------------------- -------------- --------------------- ---------------- ------------------
Gregory Barton $44,000 None None $44,000
Toni Massaro $43,220 None None $43,220
Victor Ugolyn $65,262 None None $65,262
Trustees and officers of the Trust collectively owned less than 1% of each of
the Trust's outstanding shares as of June 30, 2008.
Control Persons and Principal Holders of Securities.
Although the Trust does not have information concerning the beneficial ownership
of shares held in the names of Depository Trust Company participants ("DTC
Participants"), as of June 30, 2008, the name and percentage ownership of each
DTC Participant that owned of record 5% or more of the outstanding shares of a
Fund is set forth in the table below:
Percentage of
Name DTC Participant Name Ownership
------------------------------------------------ -------------------------------- -------------
WisdomTree Total Dividend Fund CHARLES SCHWAB 15.24%
ATTN PROXY DEPARTMENT
211 MAIN STREET
SAN FRANCISCO CA 94105
PERSHING SECURITIES CORPORATION 9.38%
1 PERSHING PLAZA
JERSEY CITY NJ 07399
MERRILL LYNCH 6.97%
101 HUDSON ST 9TH FL
JERSEY CITY NJ 07302
---------------------------------------------------------------------------------------------------
31
Percentage of
Name DTC Participant Name Ownership
------------------------------------------------ -------------------------------- -------------
WisdomTree High-Yielding Equity Fund NFS LLC 12.98%
200 LIBERTY STREET
NEW YORK CITY NY 10281
CITIGROUP 10.01%
333 W. 34TH STREET
NEW YORK NY 10001
FIRST CLEAR 8.56%
10700 WHEAT FIRST DRIVE, WS 1024
GLEN ALLEN VA 23060
PERSHING 6.63%
SECURITIES CORPORATION
1 PERSHING PLAZA
JERSEY CITY NJ 07399
MERRILL LYNCH 5.73%
101 HUDSON ST 9TH FL
JERSEY CITY NJ 07302
MSC RETAIL 5.28%
MORGAN STANLEY RETAIL
HARBOURSIDE FINANCIAL CENTER
PLAZA 3, 1ST FLOOR
JERSEY CITY NJ 07311
---------------------------------------------------------------------------------------------------
WisdomTree DEFA Fund AMERITRADE 26.32%
C/O ADP PROXY SERVICES
51 MERCEDES WAY
EDGEWOOD NY 11717
ML SFKPG 12.36%
101 HUDSON ST 9TH FL
JERSEY CITY NJ 07302
CHARLES SCHWAB 9.46%
ATTN PROXY DEPARTMENT
211 MAIN STREET
SAN FRANCISCO CA 94105
FIRST CLEAR 9.20%
10700 WHEAT FIRST DRIVE, WS 1024
GLEN ALLEN VA 23060
CURIAN LLC 6.90%
8055 E TUFTS AVE
DENVER, CO 80237
CITIGROUP 5.48%
333 W. 34TH STREET
NEW YORK NY 10001
---------------------------------------------------------------------------------------------------
32
Percentage of
Name DTC Participant Name Ownership
------------------------------------------------ -------------------------------- -------------
WisdomTree DEFA High-Yielding Equity Fund CHARLES SCHWAB 20.75%
ATTN PROXY DEPARTMENT
211 MAIN STREET
SAN FRANCISCO CA 94105
ML SFKPG 14.24%
101 HUDSON ST 9TH FL
JERSEY CITY NJ 07302
NFS LLC 8.78%
200 LIBERTY STREET
NEW YORK CITY NY 10281
MSC RETAIL 5.56%
MORGAN STANLEY RETAIL
HARBOURSIDE FINANCIAL CENTER
PLAZA 3, 1ST FLOOR
JERSEY CITY NJ 07311
CITIGROUP 5.46%
333 W. 34TH STREET
NEW YORK NY 10001
AMERITRADE
C/O ADP PROXY SERVICES 5.27%
51 MERCEDES WAY
EDGEWOOD NY 11717
5TH-3RD BANK 5.05%
FIFTH THIRD CENTER
CINCINNATI, OH 45263-0828
---------------------------------------------------------------------------------------------------
WisdomTree Pacific ex-Japan High-Yielding
Equity Fund CHARLES SCHWAB 14.37%
ATTN PROXY DEPARTMENT
211 MAIN STREET
SAN FRANCISCO CA 94105
NFS LLC 11.87%
200 LIBERTY STREET
NEW YORK CITY NY 10281
PERSHING 10.92%
SECURITIES CORPORATION
1 PERSHING PLAZA
JERSEY CITY NJ 07399
GOLDMAN LP 7.83%
30 HUDSON STREET
JERSEY CITY NJ 07302
BEAR STEARNS 7.82%
ONE METROTECH CENTER NORTH
4TH FLOOR
BROOKLYN NY 11201-3862
ML SFKPG 7.58%
101 HUDSON ST 9TH FL
JERSEY CITY NJ 07302
AMERITRADE 5.09%
C/O ADP PROXY SERVICES
51 MERCEDES WAY
EDGEWOOD NY 11717
---------------------------------------------------------------------------------------------------
33
Percentage of
Name DTC Participant Name Ownership
------------------------------------------------ -------------------------------- -------------
WisdomTree Pacific ex-Japan Total Dividend Fund CHARLES SCHWAB 12.51%
ATTN PROXY DEPARTMENT
211 MAIN STREET
SAN FRANCISCO CA 94105
US BANK NA 11.98%
1555 NORTH RIVER CENTER DRIVE
SUITE 302
MILWAUKEE, WI 53212
NFS LLC 10.00%
200 LIBERTY STREET
NEW YORK CITY NY 10281
PERSHING 9.59%
SECURITIES CORPORATION
1 PERSHING PLAZA
JERSEY CITY NJ 07399
CITIGROUP 8.38%
333 W. 34TH STREET
NEW YORK NY 10001
ML SFKPG 7.44%
101 HUDSON ST 9TH FL
JERSEY CITY NJ 07302
UBS FINANCIAL 5.18%
1200 HARBOR BLVD
WEEHAWKEN NJ 07086
---------------------------------------------------------------------------------------------------
WisdomTree Europe Total Dividend Fund ML SFKPG 21.20%
101 HUDSON ST 9TH FL
JERSEY CITY NJ 07302
CHARLES SCHWAB
ATTN PROXY DEPARTMENT 15.92%
211 MAIN STREET
SAN FRANCISCO CA 94105
NFS LLC 9.62%
200 LIBERTY STREET
NEW YORK CITY NY 10281
MSC RETAIL 7.37%
MORGAN STANLEY RETAIL
HARBOURSIDE FINANCIAL CENTER
PLAZA 3, 1ST FLOOR
JERSEY CITY NJ 07311
JP MORGAN CHASE BANK NA 6.67%
PROXY SERVICES
14201 DALLAS PKWAY
DALLAS, TX 75254
PERSHING
SECURITIES CORPORATION 5.38%
1 PERSHING PLAZA
JERSEY CITY NJ 07399
---------------------------------------------------------------------------------------------------
34
Percentage of
Name DTC Participant Name Ownership
------------------------------------------------ -------------------------------- -------------
WisdomTree Europe High-Yielding Equity Fund ML SFKPG 29.35%
101 HUDSON ST 9TH FL
JERSEY CITY NJ 07302
MSC RETAIL 13.89%
MORGAN STANLEY RETAIL
HARBOURSIDE FINANCIAL CENTER
PLAZA 3, 1ST FLOOR
JERSEY CITY NJ 07311
CHARLES SCHWAB 8.76%
ATTN PROXY DEPARTMENT
211 MAIN STREET
SAN FRANCISCO CA 94105
NFS LLC 8.56%
200 LIBERTY STREET
NEW YORK CITY NY 10281
PERSHING 6.68%
SECURITIES CORPORATION
1 PERSHING PLAZA
JERSEY CITY NJ 07399
FIRST CLEAR 5.07%
10700 WHEAT FIRST DRIVE, WS 1024
GLEN ALLEN VA 23060
---------------------------------------------------------------------------------------------------
WisdomTree Europe SmallCap Dividend Fund FIRST CLEAR 14.86%
10700 WHEAT FIRST DRIVE, WS 1024
GLEN ALLEN VA 23060
NFS LLC 12.58%
200 LIBERTY STREET
NEW YORK CITY NY 10281
ML SFKPG 11.73%
101 HUDSON ST 9TH FL
JERSEY CITY NJ 07302
CHARLES SCHWAB 10.51%
ATTN PROXY DEPARTMENT
211 MAIN STREET
SAN FRANCISCO CA 94105
GOLDMAN LP 8.08%
30 HUDSON STREET
JERSEY CITY NJ 07302
PERSHING 6.42%
SECURITIES CORPORATION
1 PERSHING PLAZA
JERSEY CITY NJ 07399
---------------------------------------------------------------------------------------------------
35
Percentage of
Name DTC Participant Name Ownership
------------------------------------------------ -------------------------------- -------------
WisdomTree Japan Total Dividend Fund GOLDMAN 10.88%
30 HUDSON STREET
JERSEY CITY NJ 07302
CHARLES SCHWAB 10.78%
ATTN PROXY DEPARTMENT
211 MAIN STREET
SAN FRANCISCO CA 94105
MSC RETAIL 9.51%
MORGAN STANLEY RETAIL
HARBOURSIDE FINANCIAL CENTER
PLAZA 3, 1ST FLOOR
JERSEY CITY NJ 07311
GOLDMAN 8.52%
30 HUDSON STREET
JERSEY CITY NJ 07302
NBCN INC 7.58%
ML SFKPG 7.23%
101 HUDSON ST 9TH FL
JERSEY CITY NJ 07302
NFS LLC 6.42%
200 LIBERTY STREET
NEW YORK CITY NY 10281
PERSHING 6.03%
SECURITIES CORPORATION
1 PERSHING PLAZA
JERSEY CITY NJ 07399
---------------------------------------------------------------------------------------------------
WisdomTree Japan High-Yielding Equity Fund CHARLES SCHWAB 16.06%
ATTN PROXY DEPARTMENT
211 MAIN STREET
SAN FRANCISCO CA 94105
PERSHING 12.40%
SECURITIES CORPORATION
1 PERSHING PLAZA
JERSEY CITY NJ 07399
NFS LLC 12.25%
200 LIBERTY STREET
NEW YORK CITY NY 10281
ML SFKPG 12.11%
101 HUDSON ST 9TH FL
JERSEY CITY NJ 07302
GOLDMAN SKPG 11.88%
30 HUDSON STREET
JERSEY CITY NJ 07302
FIRST CLEAR 6.06%
10700 WHEAT FIRST DRIVE, WS 1024
GLEN ALLEN VA 23060
---------------------------------------------------------------------------------------------------
WisdomTree Japan SmallCap Dividend Fund ML SFKPG 39.20%
101 HUDSON ST 9TH FL
JERSEY CITY NJ 07302
CHARLES SCHWAB 12.81%
ATTN PROXY DEPARTMENT
211 MAIN STREET
SAN FRANCISCO CA 94105
CITIGROUP 8.72%
333 W. 34TH STREET
NEW YORK NY 10001
NFS LLC 6.46%
200 LIBERTY STREET
NEW YORK CITY NY 10281
---------------------------------------------------------------------------------------------------
36
Percentage of
Name DTC Participant Name Ownership
------------------------------------------------ -------------------------------- -------------
WisdomTree Dividend Top 100 Fund NFS LLC 14.73%
200 LIBERTY STREET
NEW YORK CITY NY 10281
ML SFKPG 10.921%
101 HUDSON ST 9TH FL
JERSEY CITY NJ 07302
CITIGROUP 10.19%
333 W. 34TH STREET
NEW YORK NY 10001
BROWN BROS 6.56%
140 BROADWAY
NEW YORK, NEW YORK 10005
PERSHING 5.04%
SECURITIES CORPORATION
1 PERSHING PLAZA
JERSEY CITY NJ 07399
---------------------------------------------------------------------------------------------------
WisdomTree LargeCap Dividend Fund PNC BANK 20.97%
2600 LIBERTY AVENUE
PITTSBURGH, PENNSYLVANIA 15222
CHARLES SCHWAB 20.54%
ATTN PROXY DEPARTMENT
211 MAIN STREET
SAN FRANCISCO CA 94105
MERRILL LYNCH 6.98%
101 HUDSON ST 9TH FL
JERSEY CITY NJ 07302
NFS LLC 6.27%
200 LIBERTY STREET
NEW YORK CITY NY 10281
FIRST CLEAR 5.37%
10700 WHEAT FIRST DRIVE, WS 1024
GLEN ALLEN VA 23060
MSC RETAIL 5.03%
MORGAN STANLEY RETAIL
HARBOURSIDE FINANCIAL CENTER
PLAZA 3, 1ST FLOOR
JERSEY CITY NJ 07311
---------------------------------------------------------------------------------------------------
WisdomTree MidCap Dividend Fund CHARLES SCHWAB 16.18%
ATTN PROXY DEPARTMENT
211 MAIN STREET
SAN FRANCISCO CA 94105
CITIGROUP 16.17%
333 W. 34TH STREET
NEW YORK NY 10001
NFS LLC 10.80%
200 LIBERTY STREET
NEW YORK CITY NY 10281
FIRST CLEAR 5.81%
10700 WHEAT FIRST DRIVE, WS 1024
GLEN ALLEN VA 23060
UBS FINANCIAL 5.50%
1200 HARBOR BLVD
WEEHAWKEN NJ 07086
---------------------------------------------------------------------------------------------------
37
Percentage of
Name DTC Participant Name Ownership
------------------------------------------------ -------------------------------- -------------
WisdomTree SmallCap Dividend Fund CHARLES SCHWAB 19.10%
ATTN PROXY DEPARTMENT
211 MAIN STREET
SAN FRANCISCO CA 94105
CITIGROUP 15.08%
333 W. 34TH STREET
NEW YORK NY 10001
NFS LLC 14.86%
200 LIBERTY STREET
NEW YORK CITY NY 10281
ML SFKPG 7.76%
101 HUDSON ST 9TH FL
JERSEY CITY NJ 07302
FIRST CLEAR 6.70%
10700 WHEAT FIRST DRIVE, WS 1024
GLEN ALLEN VA 23060
PERSHING 5.89%
SECURITIES CORPORATION
1 PERSHING PLAZA
JERSEY CITY NJ 07399
---------------------------------------------------------------------------------------------------
WisdomTree International LargeCap Dividend Fund ML SFKPG 24.46%
101 HUDSON ST 9TH FL
JERSEY CITY NJ 07302
WILMING TRUST 15.69%
RODNEY SQUARE NORTH
1100 NORTH MARKET STREET
WILMINGTON DE 19890-2212
CHARLES SCHWAB 9.44%
ATTN PROXY DEPARTMENT
211 MAIN STREET
SAN FRANCISCO CA 94105
CITIGROUP 7.59%
333 W. 34TH STREET
NEW YORK NY 10001
NFS LLC 7.33%
200 LIBERTY STREET
NEW YORK CITY NY 10281
---------------------------------------------------------------------------------------------------
38
Percentage of
Name DTC Participant Name Ownership
------------------------------------------------ -------------------------------- -------------
WisdomTree International Dividend Top 100 Fund CHARLES SCHWAB
ATTN PROXY DEPARTMENT 17.46%
211 MAIN STREET
SAN FRANCISCO CA 94105
NFS LLC 12.23%
200 LIBERTY STREET
NEW YORK CITY NY 10281
ML SFKPG 11.63%
101 HUDSON ST 9TH FL
JERSEY CITY NJ 07302
FIRST CLEAR 5.25%
10700 WHEAT FIRST DRIVE, WS 1024
GLEN ALLEN VA 23060
PERSHING 8.02%
SECURITIES CORPORATION
1 PERSHING PLAZA
JERSEY CITY NJ 07399
CITIGROUP 6.70%
333 W. 34TH STREET
NEW YORK NY 10001
---------------------------------------------------------------------------------------------------
WisdomTree International MidCap Dividend Fund CHARLES SCHWAB 27.34%
ATTN PROXY DEPARTMENT
211 MAIN STREET
SAN FRANCISCO CA 94105
NFS LLC 11.95%
200 LIBERTY STREET
NEW YORK CITY NY 10281
CITIGROUP 11.12%
333 W. 34TH STREET
NEW YORK NY 10001
FIRST CLEAR 5.87%
10700 WHEAT FIRST DRIVE, WS 1024
GLEN ALLEN VA 23060
5TH-3RD BANK 5.75%
FIFTH THIRD CENTER
CINCINNATI, OH 45263-0828
---------------------------------------------------------------------------------------------------
WisdomTree International SmallCap Dividend Fund CHARLES SCHWAB 22.47%
ATTN PROXY DEPARTMENT
211 MAIN STREET
SAN FRANCISCO CA 94105
NFS LLC 14.98%
200 LIBERTY STREET
NEW YORK CITY NY 10281
FIDELITY TRUST 11.66%
82 DEVONSHIRE ST.
BOSTON, MA 02109
PERSHING 8.65%
SECURITIES CORPORATION
1 PERSHING PLAZA
JERSEY CITY NJ 07399
ML SFKPG 5.19%
101 HUDSON ST 9TH FL
JERSEY CITY NJ 07302
---------------------------------------------------------------------------------------------------
39
Percentage of
Name DTC Participant Name Ownership
------------------------------------------------ -------------------------------- -------------
WisdomTree International Basic Materials
Sector Fund NFS LLC 13.76%
200 LIBERTY STREET
NEW YORK CITY NY 10281
ML SFKPG 13.54%
101 HUDSON ST 9TH FL
JERSEY CITY NJ 07302
CHARLES SCHWAB 12.47%
ATTN PROXY DEPARTMENT
211 MAIN STREET
SAN FRANCISCO CA 94105
CITIGROUP 10.79%
333 W. 34TH STREET
NEW YORK NY 10001
FIRST CLEAR 9.32%
10700 WHEAT FIRST DRIVE
WS 1024
GLEN ALLEN VA 23060
PERSHING 5.86%
SECURITIES CORPORATION
1 PERSHING PLAZA
JERSEY CITY NJ 07399
AMERITRADE 5.26%
C/O ADP PROXY SERVICES
51 MERCEDES WAY
EDGEWOOD NY 11717
---------------------------------------------------------------------------------------------------
WisdomTree International Communications
Sector Fund JP MORGAN CHASE BANK NA 29.59%
PROXY SERVICES
14201 DALLAS PKWAY
DALLAS, TX 75254
BEAR STEARNS 11.64%
ONE METROTECH CENTER NORTH
4TH FLOOR
BROOKLYN NY 11201-3862
GOLDMAN SKPG 11.64%
30 HUDSON STREET
JERSEY CITY NJ 07302
ML SFKPG 10.21%
101 HUDSON ST 9TH FL
JERSEY CITY NJ 07302
---------------------------------------------------------------------------------------------------
WisdomTree International Consumer
Discretionary Sector Fund ML SFKPG 28.73%
101 HUDSON ST, 9TH FL
JERSEY CITY NJ 07302
FIRST CLEAR 16.04%
10700 WHEAT FIRST DRIVE
WS 1024
GLEN ALLEN VA 23060
MSC RETAIL 15.03%
MORGAN STANLEY RETAIL
HARBOURSIDE FINANCIAL CENTER
PLAZA 3, 1ST FLOOR
JERSEY CITY NJ 07311
CITIGROUP 7.23%
333 W. 34TH STREET
NEW YORK NY 10001
---------------------------------------------------------------------------------------------------
40
Percentage of
Name DTC Participant Name Ownership
------------------------------------------------ -------------------------------- -------------
WisdomTree International Consumer Staples
Sector Fund ML SFKPG 25.01%
101 HUDSON ST 9TH FL
JERSEY CITY NJ 07302
BEAR STEARNS 16.97%
ONE METROTECH CENTER NORTH
4TH FLOOR
BROOKLYN NY 11201-3862
CITIGROUP 9.44%
333 W. 34TH STREET
NEW YORK NY 10001
GOLDMAN LP 7.61%
30 HUDSON STREET
JERSEY CITY NJ 07302
FIRST CLEAR 7.41%
10700 WHEAT FIRST DRIVE
WS 1024
GLEN ALLEN VA 23060
NFS LLC 5.14%
200 LIBERTY STREET
NEW YORK CITY NY 10281
---------------------------------------------------------------------------------------------------
WisdomTree International Energy Sector Fund ML SFKPG 23.47%
101 HUDSON ST 9TH FL
JERSEY CITY NJ 07302
CHARLES SCHWAB 11.79%
ATTN PROXY DEPARTMENT
211 MAIN STREET
SAN FRANCISCO CA 94105
NFS LLC 9.38%
200 LIBERTY STREET
NEW YORK CITY NY 10281
CITIGROUP 9.34%
333 W. 34TH STREET
NEW YORK NY 10001
GOLDMAN LP 7.28%
30 HUDSON STREET
JERSEY CITY NJ 07302
FIRST CLEAR 5.21%
10700 WHEAT FIRST DRIVE
WS 1024
GLEN ALLEN VA 23060
---------------------------------------------------------------------------------------------------
41
Percentage of
Name DTC Participant Name Ownership
------------------------------------------------ -------------------------------- -------------
WisdomTree International Financial Sector Fund CHARLES SCHWAB 17.57%
ATTN PROXY DEPARTMENT
211 MAIN STREET
SAN FRANCISCO CA 94105
NFS LLC 14.60%
200 LIBERTY STREET
NEW YORK CITY NY 10281
CITIGROUP 8.33%
333 W. 34TH STREET
NEW YORK NY 10001
BROWN BROS 6.90%
140 BROADWAY
NEW YORK, NEW YORK 10005
ML SFKPG 6.14%
101 HUDSON ST 9TH FL
JERSEY CITY NJ 07302
---------------------------------------------------------------------------------------------------
WisdomTree International Industrial Sector Fund ML SFKPG 23.46%
101 HUDSON ST 9TH FL
JERSEY CITY NJ 07302
UBS FINANCIAL 20.05%
1200 HARBOR BLVD
WEEHAWKEN NJ 07086
GOLDMAN LP 9.84%
30 HUDSON STREET
JERSEY CITY NJ 07302
CITIGROUP 9.55%
333 W. 34TH STREET
NEW YORK NY 10001
CHARLES SCHWAB
ATTN PROXY DEPARTMENT 7.83%
211 MAIN STREET
SAN FRANCISCO CA 94105
FIRST CLEAR 6.19%
10700 WHEAT FIRST DRIVE
WS 1024
GLEN ALLEN VA 23060
---------------------------------------------------------------------------------------------------
WisdomTree International Technology Sector Fund ML SFKPG 29.07%
101 HUDSON ST 9TH FL
JERSEY CITY NJ 07302
GOLDMAN LP 17.01%
30 HUDSON STREET
JERSEY CITY NJ 07302
FIRST CLEAR 7.30%
10700 WHEAT FIRST DRIVE
WS 1024
GLEN ALLEN VA 23060
CHARLES SCHWAB 6.36%
ATTN PROXY DEPARTMENT
211 MAIN STREET
SAN FRANCISCO CA 94105
CITIGROUP 6.30%
333 W. 34TH STREET
NEW YORK NY 10001
---------------------------------------------------------------------------------------------------
42
Percentage of
Name DTC Participant Name Ownership
------------------------------------------------ -------------------------------- -------------
WisdomTree International Utilities Sector Fund ML SFKPG 14.80%
101 HUDSON ST 9TH FL
JERSEY CITY NJ 07302
CITIGROUP 11.84%
333 W. 34TH STREET
NEW YORK NY 10001
NFS LLC 10.42%
200 LIBERTY STREET
NEW YORK CITY NY 10281
CHARLES SCHWAB 9.15%
ATTN PROXY DEPARTMENT
211 MAIN STREET
SAN FRANCISCO CA 94105
PERSHING 8.57%
SECURITIES CORPORATION
1 PERSHING PLAZA
JERSEY CITY NJ 07399
GOLDMAN LP 7.55%
30 HUDSON STREET
JERSEY CITY NJ 07302
FIRST CLEAR 6.91%
10700 WHEAT FIRST DRIVE
WS 1024
GLEN ALLEN VA 23060
BANK OF NEW YORK 5.14%
ONE WALL STREET
NEW YORK, NY 10286
---------------------------------------------------------------------------------------------------
WisdomTree International Health Care Sector Fund CITIGROUP 19.25%
333 W. 34TH STREET
NEW YORK NY 10001
FIRST CLEAR 15.99%
10700 WHEAT FIRST DRIVE
WS 1024
GLEN ALLEN VA 23060
PERSHING 13.93%
SECURITIES CORPORATION
1 PERSHING PLAZA
JERSEY CITY NJ 07399
ML SFKPG 10.97%
101 HUDSON ST 9TH FL
JERSEY CITY NJ 07302
NFS LLC 10.10%
200 LIBERTY STREET
NEW YORK CITY NY 10281
CHARLES SCHWAB 6.10%
ATTN PROXY DEPARTMENT
211 MAIN STREET
SAN FRANCISCO CA 94105
---------------------------------------------------------------------------------------------------
43
Percentage of
Name DTC Participant Name Ownership
------------------------------------------------ -------------------------------- -------------
WisdomTree Total Earnings Fund BANK OF NEW YORK 27.29%
ONE WALL STREET
NEW YORK, NY 10286
PERSHING 20.89%
SECURITIES CORPORATION
1 PERSHING PLAZA
JERSEY CITY NJ 07399
NFS LLC 9.88%
200 LIBERTY STREET
NEW YORK CITY NY 10281
TIMBER HIL 5.80%
1 PICKWICK PLAZA
GREENWICH CT 06830
CHARLES SCHWAB 5.53%
ATTN PROXY DEPARTMENT
211 MAIN STREET
SAN FRANCISCO CA 94105
MSC RETAIL 5.21%
MORGAN STANLEY RETAIL
HARBOURSIDE FINANCIAL CENTER
PLAZA 3, 1ST FLOOR
JERSEY CITY NJ 07311
ML SFKPG 5.04%
101 HUDSON ST 9TH FL
JERSEY CITY NJ 07302
---------------------------------------------------------------------------------------------------
WisdomTree Earnings 500 Fund CHARLES SCHWAB 42.11%
ATTN PROXY DEPARTMENT
211 MAIN STREET
SAN FRANCISCO CA 94105
NFS LLC 10.24%
200 LIBERTY STREET
NEW YORK CITY NY 10281
CITIGROUP 5.42%
333 W. 34TH STREET
NEW YORK NY 10001
---------------------------------------------------------------------------------------------------
WisdomTree MidCap Earnings Fund CHARLES SCHWAB 46.27%
ATTN PROXY DEPARTMENT
211 MAIN STREET
SAN FRANCISCO CA 94105
NFS LLC 11.28%
200 LIBERTY STREET
NEW YORK CITY NY 10281
TIMBER HIL 10.52%
1 PICKWICK PLAZA
GREENWICH CT 06830
CITIGROUP 6.99%
333 W. 34TH STREET
NEW YORK NY 10001
FIRST CLEAR 5.51%
10700 WHEAT FIRST DRIVE
WS 1024
GLEN ALLEN VA 23060
---------------------------------------------------------------------------------------------------
44
Percentage of
Name DTC Participant Name Ownership
------------------------------------------------ -------------------------------- -------------
WisdomTree SmallCap Earnings Fund BONY SPDR 19.65%
ONE WALL STREET
NEW YORK, NY 10286
NFS LLC 15.27%
200 LIBERTY STREET
NEW YORK CITY NY 10281
FIRST CLEAR 12.33%
10700 WHEAT FIRST DRIVE
WS 1024
GLEN ALLEN VA 23060
CITIGROUP 11.16%
333 W. 34TH STREET
NEW YORK NY 10001
CHARLES SCHWAB 9.74%
ATTN PROXY DEPARTMENT
211 MAIN STREET
SAN FRANCISCO CA 94105
PERSHING 9.29%
SECURITIES CORPORATION
1 PERSHING PLAZA
JERSEY CITY NJ 07399
---------------------------------------------------------------------------------------------------
WisdomTree Earnings Top 100 Fund NFS LLC 21.02%
200 LIBERTY STREET
NEW YORK CITY NY 10281
ML SFKPG 12.75%
101 HUDSON ST 9TH FL
JERSEY CITY NJ 07302
PERSHING 11.39%
SECURITIES CORPORATION
1 PERSHING PLAZA
JERSEY CITY NJ 07399
FIRST CLEAR 8.78%
10700 WHEAT FIRST DRIVE
WS 1024
GLEN ALLEN VA 23060
BANK OF NEW YORK 7.74%
ONE WALL STREET
NEW YORK, NY 10286
---------------------------------------------------------------------------------------------------
45
Percentage of
Name DTC Participant Name Ownership
------------------------------------------------ -------------------------------- -------------
WisdomTree Low P/E Fund NFS LLC 15.70%
200 LIBERTY STREET
NEW YORK CITY NY 10281
PERSHING 15.41%
SECURITIES CORPORATION
1 PERSHING PLAZA
JERSEY CITY NJ 07399
CHARLES SCHWAB 8.48%
ATTN PROXY DEPARTMENT
211 MAIN STREET
SAN FRANCISCO CA 94105
CITIGROUP 7.86%
333 W. 34TH STREET
NEW YORK NY 10001
FIRST CLEAR 7.80%
10700 WHEAT FIRST DRIVE
WS 1024
GLEN ALLEN VA 23060
---------------------------------------------------------------------------------------------------
WisdomTree International Real Estate Fund NFS LLC 11.88%
200 LIBERTY STREET
NEW YORK CITY NY 10281
ML SFKPG 10.71%
101 HUDSON ST 9TH FL
JERSEY CITY NJ 07302
FIDELITY TRUST 9.85%
82 DEVONSHIRE ST.
BOSTON, MA 02109
AMERITRADE 7.98%
C/O ADP PROXY SERVICES
51 MERCEDES WAY
EDGEWOOD NY 11717
PERSHING 6.97%
1 PERSHING PLAZA
JERSEY CITY NJ 0739
---------------------------------------------------------------------------------------------------
WisdomTree Emerging Markets High-Yielding
Equity Fund PERSHING 16.34%
1 PERSHING PLAZA
JERSEY CITY NJ 07399
NFS LLC 14.07%
200 LIBERTY STREET
NEW YORK CITY NY 10281
CHS SCHWAB 10.64%
211 MAIN STREET
SAN FRANCISCO CA 94105
FISERV TR 7.13%
717 - 17TH STREET
SUITE 2600
DENVER CO 80202
AMERITRADE 6.86%
C/O ADP PROXY SERVICES
51 MERCEDES WAY
EDGEWOOD NY 11717
---------------------------------------------------------------------------------------------------
46
Percentage of
Name DTC Participant Name Ownership
------------------------------------------------ -------------------------------- -------------
WisdomTree Emerging Markets SmallCap
Dividend Fund CHS SCHWAB 16.74%
211 MAIN STREET
SAN FRANCISCO CA 94105
NFS LLC 12.92%
200 LIBERTY STREET
NEW YORK CITY NY 10281
MERRIL LYNCH 10.77%
101 HUDSON ST 9TH FL
JERSEY CITY NJ 07302
UBS FINANCIAL 7.86%
1200 HARBOR BLVD
WEEHAWKEN NJ 07086
CITIGROUP 7.40%
333 W. 34TH STREET
NEW YORK NY 10001
PERSHING 7.08%
1 PERSHING PLAZA
JERSEY CITY NJ 07399
---------------------------------------------------------------------------------------------------
WisdomTree India Earnings Fund NFS LLC 16.28%
200 LIBERTY STREET
NEW YORK CITY NY 10281
CHS SCHWAB 13.46%
211 MAIN STREET
SAN FRANCISCO CA 94105
FIRST CLEAR 8.09%
10700 WHEAT FIRST DRIVE
WS 1024
GLEN ALLEN VA 23060
CITIGROUP 7.58%
333 W. 34TH STREET
NEW YORK NY 10001
AMERITRADE 6.53%
C/O ADP PROXY SERVICES
51 MERCEDES WAY
EDGEWOOD NY 11717
PERSHING 5.42%
1 PERSHING PLAZA
JERSEY CITY NJ 07399
---------------------------------------------------------------------------------------------------
WisdomTree Middle East Dividend Fund* N/A
---------------------------------------------------------------------------------------------------
* Information is not presented for this Fund as it had not commenced
operations as of June 30, 2008.
47
Investment Adviser. WisdomTree Asset Management serves as investment adviser to
each Fund pursuant to an Investment Advisory Agreement between the Trust and
WisdomTree Asset Management. 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 380
Madison Avenue, 21st Floor, New York, NY 10017.
Under the Investment Advisory Agreement, WisdomTree Asset Management has overall
responsibility for the general management and administration of the Trust.
WisdomTree Asset Management provides an investment program for each Fund.
WisdomTree Asset Management also arranges for sub-advisory, transfer agency,
custody, fund administration and all other non-distribution related services
necessary for the Funds to operate.
Each Fund pays WisdomTree Asset Management the Management Fee indicated below.
Name of Fund Management Fee
----------------------------------------------------------- ---------------
WisdomTree Total Dividend Fund 0.28%
WisdomTree High-Yielding Equity Fund 0.38%
WisdomTree LargeCap Dividend Fund 0.28%
WisdomTree Dividend Top 100 Fund 0.38%
WisdomTree MidCap Dividend Fund 0.38%
WisdomTree SmallCap Dividend Fund 0.38%
WisdomTree Total Earnings Fund 0.28%
WisdomTree Earnings 500 Fund 0.28%
WisdomTree MidCap Earnings Fund 0.38%
WisdomTree SmallCap Earnings Fund 0.38%
WisdomTree Earnings Top 100 Fund 0.38%
WisdomTree Low P/E Fund 0.38%
WisdomTree DEFA Fund 0.48%
WisdomTree DEFA High-Yielding Equity Fund 0.58%
WisdomTree Europe Total Dividend Fund 0.48%
WisdomTree Europe High-Yielding Equity Fund 0.58%
WisdomTree Europe SmallCap Dividend Fund 0.58%
WisdomTree Japan Total Dividend Fund 0.48%
WisdomTree Japan High-Yielding Equity Fund 0.58%
WisdomTree Japan SmallCap Dividend Fund 0.58%
WisdomTree Pacific ex-Japan Total Dividend Fund 0.48%
WisdomTree Pacific ex-Japan High-Yielding Equity Fund 0.58%
WisdomTree International LargeCap Dividend Fund 0.48%
WisdomTree International Dividend Top 100 Fund 0.58%
WisdomTree International MidCap Dividend Fund 0.58%
WisdomTree International SmallCap Dividend Fund 0.58%
WisdomTree Emerging Markets High-Yielding Equity Fund 0.63%
WisdomTree Emerging Markets SmallCap Dividend Fund 0.63%
WisdomTree India Earnings Fund 0.68%
WisdomTree Middle East Dividend Fund 0.68%
--------------------------------------------------------------------------------
WisdomTree International Basic Materials Sector Fund 0.58%
WisdomTree International Communications Sector Fund 0.58%
WisdomTree International Consumer Discretionary Sector Fund 0.58%
WisdomTree International Consumer Staples Sector Fund 0.58%
WisdomTree International Energy Sector Fund 0.58%
WisdomTree International Financial Sector Fund 0.58%
WisdomTree International Health Care Sector Fund 0.58%
WisdomTree International Industrial Sector Fund 0.58%
WisdomTree International Technology Sector Fund 0.58%
WisdomTree International Utilities Sector Fund 0.58%
WisdomTree International Real Estate Fund 0.58%
48
With respect to each Fund (other than the India Earnings Fund and the Middle
East Dividend Fund) WisdomTree Asset Management has agreed to pay all expenses
of the Trust, except for: (i) brokerage expenses and other expenses (such as
stamp taxes) connected with the execution of portfolio transactions or in
connection with creation and 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 chief compliance officer; (vi) extraordinary expenses;
(vii) distribution fees and expenses paid by the Trust under any distribution
plan adopted pursuant to Rule 12b-1 under the 1940 Act; and (viii) the advisory
fee payable to WisdomTree Asset Management. Pursuant to a separate contractual
arrangement with respect to each Fund (other than the India Earnings Fund and
the Middle East Dividend Fund) WisdomTree arranges for the provision of chief
compliance officer ("CCO") services and is liable and responsible for, and
administers, payments to the CCO, the Independent Trustees and counsel to the
Independent Trustees, in exchange for a fee paid by each Fund of up to 0.0044%
of the Fund's average daily net assets.
The Portfolio is advised by WisdomTree Asset Management. WisdomTree Asset
Management does not receive any additional compensation for advising the
Portfolio.
For the following periods, the Adviser received the following fees:
Advisory Fee Advisory Fee
Commencement Period Ended Period Ended
Name of Operations March 31, 2007 March 31, 2008
----------------------------------------------------------- ------------- -------------- --------------
WisdomTree Total Dividend Fund 6/16/06 $ 113,719 $ 269,768
-------------------------------------------------------------------------------------------------------------
WisdomTree High-Yielding Equity Fund 6/16/06 295,809 736,971
-------------------------------------------------------------------------------------------------------------
WisdomTree DEFA Fund 6/16/06 199,673 1,415,559
-------------------------------------------------------------------------------------------------------------
WisdomTree DEFA High-Yielding Equity Fund 6/16/06 317,496 1,445,109
-------------------------------------------------------------------------------------------------------------
WisdomTree Pacific ex-Japan High-Yielding Equity Fund 6/16/06 160,899 584,781
-------------------------------------------------------------------------------------------------------------
WisdomTree Pacific ex-Japan Total Dividend Fund 6/16/06 105,496 774,010
-------------------------------------------------------------------------------------------------------------
WisdomTree Europe Total Dividend Fund 6/16/06 67,833 237,566
-------------------------------------------------------------------------------------------------------------
WisdomTree Europe High-Yielding Equity Fund 6/16/06 122,153 312,747
-------------------------------------------------------------------------------------------------------------
WisdomTree Europe SmallCap Dividend Fund 6/16/06 221,137 595,194
-------------------------------------------------------------------------------------------------------------
WisdomTree Japan Total Dividend Fund 6/16/06 103,330 214,941
-------------------------------------------------------------------------------------------------------------
WisdomTree Japan High-Yielding Equity Fund 6/16/06 133,841 304,862
-------------------------------------------------------------------------------------------------------------
WisdomTree Japan SmallCap Dividend Fund 6/16/06 128,531 465,970
-------------------------------------------------------------------------------------------------------------
WisdomTree Dividend Top 100 Fund 6/16/06 233,421 773,212
-------------------------------------------------------------------------------------------------------------
WisdomTree LargeCap Dividend Fund 6/16/06 326,902 887,614
-------------------------------------------------------------------------------------------------------------
WisdomTree MidCap Dividend Fund 6/16/06 103,769 373,656
-------------------------------------------------------------------------------------------------------------
WisdomTree SmallCap Dividend Fund 6/16/06 152,022 410,425
-------------------------------------------------------------------------------------------------------------
WisdomTree International LargeCap Dividend Fund 6/16/06 156,254 688,454
-------------------------------------------------------------------------------------------------------------
WisdomTree International Dividend Top 100 Fund 6/16/06 469,927 2,391,354
-------------------------------------------------------------------------------------------------------------
WisdomTree International MidCap Dividend Fund 6/16/06 230,677 1,481,831
-------------------------------------------------------------------------------------------------------------
WisdomTree International SmallCap Dividend Fund 6/16/06 398,322 3,016,342
-------------------------------------------------------------------------------------------------------------
WisdomTree International Basic Materials Sector Fund 10/13/06 15,338 480,261
-------------------------------------------------------------------------------------------------------------
WisdomTree International Communications Sector Fund 10/13/06 32,387 172,291
-------------------------------------------------------------------------------------------------------------
WisdomTree International Consumer Discretionary Sector Fund 10/13/06 15,129 34,905
-------------------------------------------------------------------------------------------------------------
WisdomTree International Consumer Staples Sector Fund 10/13/06 42,549 153,549
-------------------------------------------------------------------------------------------------------------
WisdomTree International Energy Sector Fund 10/13/06 41,504 250,529
-------------------------------------------------------------------------------------------------------------
WisdomTree International Financial Sector Fund 10/13/06 16,936 127,465
-------------------------------------------------------------------------------------------------------------
WisdomTree International Industrial Sector Fund 10/13/06 26,520 253,102
-------------------------------------------------------------------------------------------------------------
WisdomTree International Technology Sector Fund 10/13/06 13,947 61,828
-------------------------------------------------------------------------------------------------------------
WisdomTree International Utilities Sector Fund 10/13/06 46,704 295,876
-------------------------------------------------------------------------------------------------------------
WisdomTree International Health Care Sector Fund 10/13/06 41,870 137,305
-------------------------------------------------------------------------------------------------------------
WisdomTree Total Earnings Fund 2/23/07 6,912 48,010
-------------------------------------------------------------------------------------------------------------
WisdomTree Earnings 500 Fund 2/23/07 5,511 108,747
-------------------------------------------------------------------------------------------------------------
WisdomTree MidCap Earnings Fund 2/23/07 1,867 83,454
-------------------------------------------------------------------------------------------------------------
WisdomTree SmallCap Earnings Fund 2/23/07 3,386 58,025
-------------------------------------------------------------------------------------------------------------
WisdomTree Earnings Top 100 Fund 2/23/07 9,423 59,796
-------------------------------------------------------------------------------------------------------------
WisdomTree Low P/E Fund 2/23/07 9,375 88,570
-------------------------------------------------------------------------------------------------------------
WisdomTree International Real Estate Fund 6/5/07 N/A 336,686
-------------------------------------------------------------------------------------------------------------
WisdomTree Emerging Markets High-Yielding Equity Fund 7/13/07 N/A 474,220
-------------------------------------------------------------------------------------------------------------
WisdomTree Emerging Markets SmallCap Dividend Fund 10/30/07 N/A 90,419
-------------------------------------------------------------------------------------------------------------
WisdomTree India Earnings Fund 2/22/08 N/A 66,315
-------------------------------------------------------------------------------------------------------------
WisdomTree Middle East Dividend Fund 7/16/08 N/A N/A
-------------------------------------------------------------------------------------------------------------
49
The Advisory Agreement with respect to each Fund continues in effect for two
years from its effective date, and thereafter is subject to annual approval by
(i) the Board of Trustees of the Trust 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 any Fund fail to
approve the 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 Advisory Agreement with respect to any Fund is terminable without any
penalty, by vote of the Board of Trustees of the Trust or by vote of a majority
of the outstanding voting securities (as defined in the 1940 Act) of that Fund,
or by WisdomTree Asset Management, in each case on not less than 30 days nor
more than 60 days prior written notice to the other party; provided, that a
shorter notice period shall be permitted for a 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).
Sub-Adviser. Mellon Capital, a registered investment adviser, with its principal
office is located at 50 Fremont Street, San Francisco, CA 94105 serves as
Sub-Adviser for each Fund. As of June 30, 2008, Mellon Capital managed
approximately $204 billion for institutions. Mellon Capital is a wholly-owned
indirect subsidiary of The Bank of New York Mellon Corporation, a publicly
traded financial holding company. The Sub-Adviser chooses each Fund's portfolio
investments and places orders to buy and sell the Fund's portfolio investments.
WisdomTree Asset Management pays the Sub-Adviser for providing sub-advisory
services to the Funds as describer below.
Sub-Adviser's Fees for the Domestic Funds
The Sub-Adviser is entitled to receive the fees indicated below for acting as
Sub-Adviser to the Domestic Funds:
o 3 basis points (0.03%) of the first $2 billion in combined daily net
assets of all Domestic Funds;
o 2 basis points (0.02%) of the next $3 billion in combined daily net
assets of all Domestic Funds; and
o 1.5 basis points (0.015%) of the combined daily net assets of all
Domestic Funds in excess of $5 billion.
Sub-Adviser's Fees for the International Funds
The Sub-Adviser is entitled to receive the fees indicated below for acting as
Sub-Adviser to the International Funds:
o 7.5 basis points (0.075%) of the first $1 billion in combined daily
net assets of all International Equity Funds;
o 5 basis points (0.05%) of the next $1 billion in combined daily net
assets of all International Equity Funds;
o 3 basis points (0.03%) of the next $3 billion in combined daily net
assets of all International Equity Funds; and
o 2 basis points (0.02%) of the combined daily net assets of all
International Equity Funds in excess of $5 billion.
50
The Portfolio is sub-advised by Mellon Capital. Mellon Capital does not receive
any additional compensation for sub-advising the Portfolio.
For the following periods, the Sub-Adviser received the following fees:
Sub-Advisory Sub-Advisory
Fee Fee
Commencement Period Ended Period Ended
Name of Operations March 31, 2007 March 31, 2008
----------------------------------------------------------- ------------- -------------- --------------
WisdomTree Total Dividend Fund 6/16/06 $ 7,575 $ 42,632
-------------------------------------------------------------------------------------------------------------
WisdomTree High-Yielding Equity Fund 6/16/06 17,145 66,149
-------------------------------------------------------------------------------------------------------------
WisdomTree DEFA Fund 6/16/06 19,410 190,007
-------------------------------------------------------------------------------------------------------------
WisdomTree DEFA High-Yielding Equity Fund 6/16/06 26,790 114,145
-------------------------------------------------------------------------------------------------------------
WisdomTree Pacific ex-Japan Total Dividend Fund 6/16/06 14,521 70,182
-------------------------------------------------------------------------------------------------------------
WisdomTree Pacific ex-Japan High-Yielding Equity Fund 6/16/06 14,521 32,778
-------------------------------------------------------------------------------------------------------------
WisdomTree Europe Total Dividend Fund 6/16/06 14,521 20,591
-------------------------------------------------------------------------------------------------------------
WisdomTree Europe High-Yielding Equity Fund 6/16/06 14,521 22,294
-------------------------------------------------------------------------------------------------------------
WisdomTree Europe SmallCap Dividend Fund 6/16/06 18,790 23,821
-------------------------------------------------------------------------------------------------------------
WisdomTree Japan Total Dividend Fund 6/16/06 14,521 18,055
-------------------------------------------------------------------------------------------------------------
WisdomTree Japan High-Yielding Equity Fund 6/16/06 14,521 14,304
-------------------------------------------------------------------------------------------------------------
WisdomTree Japan SmallCap Dividend Fund 6/16/06 14,521 40,086
-------------------------------------------------------------------------------------------------------------
WisdomTree Dividend Top 100 Fund 6/16/06 14,028 82,845
-------------------------------------------------------------------------------------------------------------
WisdomTree LargeCap Dividend Fund 6/16/06 23,512 139,253
-------------------------------------------------------------------------------------------------------------
WisdomTree MidCap Dividend Fund 6/16/06 7,260 44,167
-------------------------------------------------------------------------------------------------------------
WisdomTree SmallCap Dividend Fund 6/16/06 8,914 40,086
-------------------------------------------------------------------------------------------------------------
WisdomTree International LargeCap Dividend Fund 6/16/06 14,521 73,537
-------------------------------------------------------------------------------------------------------------
WisdomTree International Dividend Top 100 Fund 6/16/06 40,587 190,877
-------------------------------------------------------------------------------------------------------------
WisdomTree International MidCap Dividend Fund 6/16/06 18,258 104,110
-------------------------------------------------------------------------------------------------------------
WisdomTree International SmallCap Dividend Fund 6/16/06 36,444 228,956
-------------------------------------------------------------------------------------------------------------
WisdomTree International Basic Materials Sector Fund 10/13/06 N/A 43,055
-------------------------------------------------------------------------------------------------------------
WisdomTree International Communications Sector Fund 10/13/06 N/A 14,783
-------------------------------------------------------------------------------------------------------------
WisdomTree International Consumer Discretionary Sector Fund 10/13/06 N/A 2,510
-------------------------------------------------------------------------------------------------------------
WisdomTree International Consumer Staples Sector Fund 10/13/06 N/A 18,626
-------------------------------------------------------------------------------------------------------------
WisdomTree International Energy Sector Fund 10/13/06 N/A 24,706
-------------------------------------------------------------------------------------------------------------
WisdomTree International Financial Sector Fund 10/13/06 N/A 9,033
-------------------------------------------------------------------------------------------------------------
WisdomTree International Industrial Sector Fund 10/13/06 N/A 25,880
-------------------------------------------------------------------------------------------------------------
WisdomTree International Technology Sector Fund 10/13/06 N/A 11,096
-------------------------------------------------------------------------------------------------------------
WisdomTree International Utilities Sector Fund 10/13/06 N/A 47,409
-------------------------------------------------------------------------------------------------------------
WisdomTree International Health Care Sector Fund 10/13/06 N/A 14,331
-------------------------------------------------------------------------------------------------------------
WisdomTree Total Earnings Fund 2/23/07 N/A 7,692
-------------------------------------------------------------------------------------------------------------
WisdomTree Earnings 500 Fund 2/23/07 N/A 26,642
-------------------------------------------------------------------------------------------------------------
WisdomTree MidCap Earnings Fund 2/23/07 N/A 12,215
-------------------------------------------------------------------------------------------------------------
WisdomTree SmallCap Earnings Fund 2/23/07 N/A 8,983
-------------------------------------------------------------------------------------------------------------
WisdomTree Earnings Top 100 Fund 2/23/07 N/A 6,576
-------------------------------------------------------------------------------------------------------------
WisdomTree Low P/E Fund 2/23/07 N/A 11,685
-------------------------------------------------------------------------------------------------------------
WisdomTree International Real Estate Fund 6/5/07 N/A 51,882
-------------------------------------------------------------------------------------------------------------
WisdomTree Emerging Markets High-Yielding Equity Fund 7/13/07 N/A 76,075
-------------------------------------------------------------------------------------------------------------
WisdomTree Emerging Markets SmallCap Dividend Fund 10/30/07 N/A 21,226
-------------------------------------------------------------------------------------------------------------
WisdomTree India Earnings Fund 2/22/08 N/A 51,882
-------------------------------------------------------------------------------------------------------------
WisdomTree Middle East Dividend Fund 7/16/08 N/A N/A
-------------------------------------------------------------------------------------------------------------
Mellon Capital 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
Mellon Capital from continuing to perform services for the Trust. If this
happens, the Board would consider selecting other qualified firms. Any new
investment Sub-Advisory agreement would be subject to shareholder approval.
Portfolio Manager. Each fund is managed by Mellon Capital's Equity Index
Stategies portfolio management team. The individual members of the team
responsible for the day-to-day management of the Fund's portfolio are Denise
Krisko and Steven Wetter.
Including the WisdomTree ETFs, as of June 30, 2008, the Index Fund Management
team managed ninety eight other registered investment companies with
approximately $6.34 billion in assets; one pooled investment vehicle with
approximately $0.13 billion in assets and twenty forty other accounts with
approximately $4.32 billion in assets.
51
Portfolio Manager Fund Ownership
As of June 30, 2008, the dollar range of securities beneficially owned by the
following Portfolio Managers in the Trust is as follows:
Dollar Range of Securities
Portfolio Manager Beneficially Owned
----------------- --------------------------
Steve Wetter None
Denise Krisko None
Portfolio Manager Compensation
As of June 30, 2008, the Sub-Adviser's portfolio managers responsible for
managing the Funds are generally eligible for compensation consisting of base
salary, bonus, and payments under Mellon Capital's long-term incentive
compensation program. All compensation is paid by Mellon Capital and not by the
Funds. The same methodology described below is used to determine portfolio
manager compensation with respect to the management of mutual funds and other
accounts.
Portfolio managers are also eligible for the standard retirement benefits and
health and welfare benefits available to all Mellon Capital employees. Certain
portfolio managers may be eligible for additional retirement benefits under
several supplemental retirement plans that Mellon Capital provides to restore
dollar-for-dollar the benefits of management employees that had been cut back
solely as a result of certain limits due to the tax laws. These plans are
structured to provide the same retirement benefits as the standard retirement
benefits. In addition, portfolio managers whose compensation exceeds certain
limits may elect to defer a portion of their salary and/or bonus under The Bank
of New York Mellon Corporation deferred compensation plan.
A portfolio manager's base salary is determined by the manager's experience and
performance in the role, taking into account the ongoing compensation benchmark
analyses. A portfolio manager's base salary is generally a fixed amount that may
change as a result of an annual review, upon assumption of new duties, or when a
market adjustment of the position occurs.
A portfolio manager's bonus is determined by a number of factors. One factor is
gross performance of the fund relative to expectations for how the fund should
have performed, given its objectives, policies, strategies and limitations, and
the market environment during the measurement period. Additional factors include
the overall financial performance of the company, the performance of all
accounts (relative to expectations) for which the portfolio manager has
responsibility, the portfolio manager's contributions to the investment
management functions within the sub-asset class, contributions to the
development of other investment professionals and supporting staff, and overall
contributions to strategic planning and decisions for the investment management
group. The target bonus is expressed as a percentage of base salary. The actual
bonus paid may be more or less than the target bonus, based on how well the
manager satisfies the objectives stated above. The bonus is paid on an annual
basis.
Under the long-term incentive compensation program, certain portfolio managers
are eligible to receive a payment from the company's long-term incentive
compensation plan based on their years of service, job level and, if applicable,
management responsibilities. Each year, a portion of the firm's profits is
allocated to the long-term incentive compensation award. The annual awards are
paid after three years.
Description of Material Conflicts of Interest
Because the portfolio managers manage multiple portfolios for multiple clients,
the potential for conflicts of interest exists. Each portfolio manager generally
manages portfolios having substantially the same investment style as the Funds.
However, the portfolios managed by a portfolio manager may not have portfolio
compositions identical to those of the Funds managed by the portfolio manager
due, for example, to specific investment limitations or guidelines present in
some portfolios or accounts, but not others. The portfolio managers may purchase
securities for one portfolio and not another portfolio, and the performance of
securities purchased for one portfolio may vary from the performance of
securities purchased for other portfolios. A portfolio manager may place
transactions on behalf of other accounts that are directly or indirectly
contrary to investment decisions made on behalf of the Fund, or make investment
decisions that are similar to those made for the Fund, both of which
52
have the potential to adversely impact the Fund depending on market conditions.
For example, a portfolio manager may purchase a security in one portfolio while
appropriately selling that same security in another portfolio. In addition, some
of these portfolios have fee structures that are or have the potential to be
higher than the advisory fees paid by the Fund, which can cause potential
conflicts in the allocation of investment opportunities between the Fund and the
other accounts. However, the compensation structure for portfolio managers does
not generally provide incentive to favor one account over another because that
part of a manager's bonus based on performance is not based on the performance
of one account to the exclusion of others. There are many other factors
considered in determining the portfolio manager's bonus and there is no formula
that is applied to weight the factors listed (see "Portfolio Managers
Compensation). In addition, current trading practices do not allow sub-adviser
to intentionally favor one portfolio over another as trades are executed as
trade orders are received. Portfolio's rebalancing dates also generally vary
between fund families. Program trades created from the portfolio rebalance are
executed at market on close.
Code of Ethics. The Trust, WisdomTree Asset Management, the Sub-Adviser and the
Funds' distributor have each adopted a Codes of Ethic pursuant to Rule 17j-1
under the 1940 Act. The Codes of Ethics permit personnel subject to the Codes 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 Funds. The Codes of Ethics are on public file with, and are available from,
the SEC.
Administrator, Custodian and Transfer Agent. The Bank of New York Mellon
("BNYM") serves as administrator, custodian and transfer agent for the Funds.
BNYM's principal address is One Wall Street, New York, New York 10286. Under the
Fund Administration and Accounting Agreement with the Trust, BNYM provides
necessary administrative, legal, tax, accounting services and financial
reporting for the maintenance and operations of the Trust and each Fund. In
addition, BNYM makes available the office space, equipment, personnel and
facilities required to provide such services. Under the custody agreement with
the Trust, BNYM maintains in separate accounts cash, securities and other assets
of the Trust and each Fund, keeps all necessary accounts and records, and
provides other services. BNYM is required, upon the order of the Trust, to
deliver securities held by BNYM and to make payments for securities purchased by
the Trust for each Fund. Also, under a Delegation Agreement, BNYM 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, BNYM acts as transfer agent for each Fund's authorized
and issued shares of beneficial interest, and as dividend disbursing agent of
the Trust. As compensation for the foregoing services, BNYM receives certain out
of pocket costs, transaction fees and asset-based fees which are accrued daily
and paid monthly by the Trust from the Trust's custody account with BNYM.
BNYM serves as the Portfolio's custodian. BNYM does not receive any additional
compensation for performing these services.
53
For the following periods the Administrator received the following fees:
Administration Administration
Fee for the Fee for the
Commencement Period Ended Period Ended
Name of Operations March 31, 2007 March 31, 2008
----------------------------------------------------------- ------------- -------------- --------------
WisdomTree Total Dividend Fund 6/16/06 $ 11,551 $ 9,245
-------------------------------------------------------------------------------------------------------------
WisdomTree High-Yielding Equity Fund 6/16/06 22,767 20,776
-------------------------------------------------------------------------------------------------------------
WisdomTree DEFA Fund 6/16/06 11,928 16,115
-------------------------------------------------------------------------------------------------------------
WisdomTree DEFA High-Yielding Equity Fund 6/16/06 16,262 20,244
-------------------------------------------------------------------------------------------------------------
WisdomTree Pacific ex-Japan High-Yielding Equity Fund 6/16/06 8,506 9,325
-------------------------------------------------------------------------------------------------------------
WisdomTree Pacific ex-Japan Total Dividend Fund 6/16/06 7,025 9,936
-------------------------------------------------------------------------------------------------------------
WisdomTree Europe Total Dividend Fund 6/16/06 4,082 3,646
-------------------------------------------------------------------------------------------------------------
WisdomTree Europe High-Yielding Equity Fund 6/16/06 5,941 4,749
-------------------------------------------------------------------------------------------------------------
WisdomTree Europe SmallCap Dividend Fund 6/16/06 12,071 4,438
-------------------------------------------------------------------------------------------------------------
WisdomTree Japan Total Dividend Fund 6/16/06 6,561 8,030
-------------------------------------------------------------------------------------------------------------
WisdomTree Japan High-Yielding Equity Fund 6/16/06 7,612 19,184
-------------------------------------------------------------------------------------------------------------
WisdomTree Japan SmallCap Dividend Fund 6/16/06 7,484 32,549
-------------------------------------------------------------------------------------------------------------
WisdomTree Dividend Top 100 Fund 6/16/06 18,472 8,714
-------------------------------------------------------------------------------------------------------------
WisdomTree LargeCap Dividend Fund 6/16/06 34,785 10,986
-------------------------------------------------------------------------------------------------------------
WisdomTree MidCap Dividend Fund 6/16/06 7,931 8,432
-------------------------------------------------------------------------------------------------------------
WisdomTree SmallCap Dividend Fund 6/16/06 11,785 13,415
-------------------------------------------------------------------------------------------------------------
WisdomTree International LargeCap Dividend Fund 6/16/06 9,781 9,623
-------------------------------------------------------------------------------------------------------------
WisdomTree International Dividend Top 100 Fund 6/16/06 24,454 30,023
-------------------------------------------------------------------------------------------------------------
WisdomTree International MidCap Dividend Fund 6/16/06 12,087 22,603
-------------------------------------------------------------------------------------------------------------
WisdomTree International SmallCap Dividend Fund 6/16/06 21,693 39,457
-------------------------------------------------------------------------------------------------------------
WisdomTree International Basic Materials Sector Fund 10/13/06 698 3,368
-------------------------------------------------------------------------------------------------------------
WisdomTree International Communications Sector Fund 10/13/06 1,705 2,283
-------------------------------------------------------------------------------------------------------------
WisdomTree International Consumer Discretionary Sector Fund 10/13/06 686 739
-------------------------------------------------------------------------------------------------------------
WisdomTree International Consumer Staples Sector Fund 10/13/06 1,962 2,193
-------------------------------------------------------------------------------------------------------------
WisdomTree International Energy Sector Fund 10/13/06 1,992 2,239
-------------------------------------------------------------------------------------------------------------
WisdomTree International Financial Sector Fund 10/13/06 964 2,209
-------------------------------------------------------------------------------------------------------------
WisdomTree International Industrial Sector Fund 10/13/06 1,384 2,587
-------------------------------------------------------------------------------------------------------------
WisdomTree International Technology Sector Fund 10/13/06 627 659
-------------------------------------------------------------------------------------------------------------
WisdomTree International Utilities Sector Fund 10/13/06 2,345 2,302
-------------------------------------------------------------------------------------------------------------
WisdomTree International Health Care Sector Fund 10/13/06 1,917 2,095
-------------------------------------------------------------------------------------------------------------
WisdomTree Total Earnings Fund 2/23/07 552 2,043
-------------------------------------------------------------------------------------------------------------
WisdomTree Earnings 500 Fund 2/23/07 440 2,063
-------------------------------------------------------------------------------------------------------------
WisdomTree MidCap Earnings Fund 2/23/07 110 713
-------------------------------------------------------------------------------------------------------------
WisdomTree SmallCap Earnings Fund 2/23/07 237 1,090
-------------------------------------------------------------------------------------------------------------
WisdomTree Earnings Top 100 Fund 2/23/07 556 2,152
-------------------------------------------------------------------------------------------------------------
WisdomTree Low P/E Fund 2/23/07 553 2,138
-------------------------------------------------------------------------------------------------------------
WisdomTree International Real Estate Fund 6/5/07 N/A N/A
-------------------------------------------------------------------------------------------------------------
WisdomTree Emerging Markets High-Yielding Equity Fund 7/13/07 N/A N/A
-------------------------------------------------------------------------------------------------------------
WisdomTree Emerging Markets SmallCap Dividend Fund 10/30/07 N/A N/A
-------------------------------------------------------------------------------------------------------------
WisdomTree India Earnings Fund 2/22/08 N/A N/A
-------------------------------------------------------------------------------------------------------------
WisdomTree Middle East Dividend Fund 7/16/08 N/A N/A
-------------------------------------------------------------------------------------------------------------
Distributor. The principal address of ALPS Distributors, Inc. is 1290 Broadway,
Suite 1100, Denver, Colorado 80203. The Distributor has entered into a
Distribution Agreement with the Trust pursuant to which it distributes shares of
each 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 Funds through the Distributor only in Creation Unit Aggregations, as
described in the applicable Prospectus and below in the Creation and Redemption
of Creation Units Aggregations section. Shares in less than Creation Unit
Aggregations are not distributed by the Distributor. The Distributor will
deliver the applicable 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 Investments, WisdomTree Asset Management, nor any stock exchange.
The Distribution Agreement for each Fund will provide that it 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)
54
of the relevant Fund. The Distribution Agreement will terminate automatically in
the event of its "assignment" (as defined in the 1940 Act).
The Distributor may also enter into agreements with securities dealers
("Soliciting Dealers") who will solicit purchases of Creation Unit Aggregations
of shares. Such Soliciting Dealers may also be Authorized Participants (as
defined below) or DTC Participants (as defined below).
WisdomTree Asset Management may, from time to time and from its own resources,
pay, defray or absorb costs relating to distribution, including payments out of
its own resources to the Distributor, or to otherwise promote the sale of
shares.
Brokerage Transactions
The Sub-Adviser assumes general supervision over placing orders on behalf of
each 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 may also be
selected because of their ability to handle special or difficult executions,
such as may be involved in large block trades, less liquid 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 a Fund's shares as a factor in the
selection of a broker or a dealer to execute its portfolio transactions.
55
Brokerage Commissions.
The table below sets forth the brokerage commissions paid by each Fund for the
fiscal years ended March 31, 2007 and 2008.
Commissions Paid Commissions Paid
for Fiscal Year Ended for Fiscal Year Ended
Name March 31, 2007 March 31, 2008
----------------------------------------------------------- --------------------- ---------------------
WisdomTree Total Dividend Fund $ 3,648 $ 5,192
-----------------------------------------------------------------------------------------------------------
WisdomTree High-Yielding Equity Fund 7,502 15,509
-----------------------------------------------------------------------------------------------------------
WisdomTree DEFA Fund 6,687 24,215
-----------------------------------------------------------------------------------------------------------
WisdomTree DEFA High-Yielding Equity Fund 14,180 32,649
-----------------------------------------------------------------------------------------------------------
WisdomTree Pacific ex-Japan High-Yielding Equity Fund 2,670 15,584
-----------------------------------------------------------------------------------------------------------
WisdomTree Pacific ex-Japan Total Dividend Fund 6,681 21,337
-----------------------------------------------------------------------------------------------------------
WisdomTree Europe Total Dividend Fund 4,498 6,111
-----------------------------------------------------------------------------------------------------------
WisdomTree Europe High-Yielding Equity Fund 6,629 11,126
-----------------------------------------------------------------------------------------------------------
WisdomTree Europe SmallCap Dividend Fund 30,281 19,507
-----------------------------------------------------------------------------------------------------------
WisdomTree Japan Total Dividend Fund 1,752 585
-----------------------------------------------------------------------------------------------------------
WisdomTree Japan High-Yielding Equity Fund 1,968 7,316
-----------------------------------------------------------------------------------------------------------
WisdomTree Japan SmallCap Dividend Fund 8,864 3,033
-----------------------------------------------------------------------------------------------------------
WisdomTree Dividend Top 100 Fund 7,919 10,982
-----------------------------------------------------------------------------------------------------------
WisdomTree LargeCap Dividend Fund 9,823 11,925
-----------------------------------------------------------------------------------------------------------
WisdomTree MidCap Dividend Fund 2,679 15,032
-----------------------------------------------------------------------------------------------------------
WisdomTree SmallCap Dividend Fund 8,570 32,394
-----------------------------------------------------------------------------------------------------------
WisdomTree International LargeCap Dividend Fund 4,068 17,368
-----------------------------------------------------------------------------------------------------------
WisdomTree International Dividend Top 100 Fund 8,459 84,742
-----------------------------------------------------------------------------------------------------------
WisdomTree International MidCap Dividend Fund 33,778 42,786
-----------------------------------------------------------------------------------------------------------
WisdomTree International SmallCap Dividend Fund 49,713 80,563
-----------------------------------------------------------------------------------------------------------
WisdomTree International Basic Materials Sector Fund 23 8,127
-----------------------------------------------------------------------------------------------------------
WisdomTree International Communications Sector Fund 56 5,988
-----------------------------------------------------------------------------------------------------------
WisdomTree International Consumer Discretionary Sector Fund 136 1,478
-----------------------------------------------------------------------------------------------------------
WisdomTree International Consumer Staples Sector Fund 393 1,934
-----------------------------------------------------------------------------------------------------------
WisdomTree International Energy Sector Fund 169 5,659
-----------------------------------------------------------------------------------------------------------
WisdomTree International Financial Sector Fund 528 2,781
-----------------------------------------------------------------------------------------------------------
WisdomTree International Industrial Sector Fund 120 3,989
-----------------------------------------------------------------------------------------------------------
WisdomTree International Technology Sector Fund 90 1,143
-----------------------------------------------------------------------------------------------------------
WisdomTree International Utilities Sector Fund 225 6,027
-----------------------------------------------------------------------------------------------------------
WisdomTree International Health Care Sector Fund 364 896
-----------------------------------------------------------------------------------------------------------
WisdomTree Total Earnings Fund 263 1,067
-----------------------------------------------------------------------------------------------------------
WisdomTree Earnings 500 Fund 43 1,538
-----------------------------------------------------------------------------------------------------------
WisdomTree MidCap Earnings Fund 2 5,476
-----------------------------------------------------------------------------------------------------------
WisdomTree SmallCap Earnings Fund 11 5,339
-----------------------------------------------------------------------------------------------------------
WisdomTree Earnings Top 100 Fund 135 935
-----------------------------------------------------------------------------------------------------------
WisdomTree Low P/E Fund 109 2,450
-----------------------------------------------------------------------------------------------------------
WisdomTree International Real Estate Fund N/A 10,462
-----------------------------------------------------------------------------------------------------------
WisdomTree Emerging Markets High-Yielding Equity Fund N/A 97,204
-----------------------------------------------------------------------------------------------------------
WisdomTree Emerging Markets SmallCap Dividend Fund N/A 22,943
-----------------------------------------------------------------------------------------------------------
WisdomTree India Earnings Fund N/A 172,783
-----------------------------------------------------------------------------------------------------------
WisdomTree Middle East Dividend Fund N/A N/A
-----------------------------------------------------------------------------------------------------------
56
Affiliated Brokers
During the fiscal year ended March 31, 2008, the Funds did not pay any
commissions to any affiliated brokers.
Regular Broker-Dealers
The following table lists each Fund that acquired securities of its regular
brokers or dealers (as defined in the 1940 Act) or of their parents during the
fiscal year ended March 31, 2008, the name of each such broker or dealer and the
value of each Fund's aggregate holdings of the securities of each issuer as of
March 31, 2008.
Aggregate Value of
Holdings as of
Fund Name of Broker or Dealer March 31, 2008
------------------------------------- ------------------------------ ------------------
WisdomTree Total Dividend Fund
BEAR STEARNS & CO., INC. $ 5,822
CITIGROUP, INC. 2,549,964
GOLDMAN SACHS GROUP, INC. 142,897
LEHMAN BROTHERS HOLDINGS, INC. 67,150
MERRILL LYNCH & CO., INC. 290,924
-------------------------------------------------------------------------------------------
WisdomTree High-Yielding Equity Fund
CITIGROUP, INC. $ 8,974,850
-------------------------------------------------------------------------------------------
WisdomTree LargeCap Dividend Fund
BEAR STEARNS & CO., INC. $ 25,889
CITIGROUP, INC. 10,638,242
GOLDMAN SACHS GROUP, INC. 584,323
LEHMAN BROTHERS HOLDINGS, INC. 271,497
MERRILL LYNCH & CO., INC. 1,205,823
-------------------------------------------------------------------------------------------
WisdomTree Dividend Top 100 Fund
CITIGROUP, INC. $ 2,313,746
-------------------------------------------------------------------------------------------
WisdomTree Total Earnings Fund
BEAR STEARNS & CO., INC. $ 3,881
CITIGROUP, INC. 231,614
GOLDMAN SACHS GROUP, INC. 170,514
LEHMAN BROTHERS HOLDINGS, INC. 49,196
MERRILL LYNCH & CO., INC. 40,251
-------------------------------------------------------------------------------------------
WisdomTree Earnings 500 Fund
BEAR STEARNS & CO., INC. $ 15,672
CITIGROUP, INC. 942,758
GOLDMAN SACHS GROUP, INC. 699,929
LEHMAN BROTHERS HOLDINGS, INC. 197,234
MERRILL LYNCH & CO., INC. 167,686
-------------------------------------------------------------------------------------------
WisdomTree Earnings Top 100 Fund
BEAR STEARNS & CO., INC. $ 31,575
CITIGROUP, INC. 131,947
GOLDMAN SACHS GROUP, INC. 176,306
LEHMAN BROTHERS HOLDINGS, INC. 137,273
-------------------------------------------------------------------------------------------
WisdomTree Low P/E Fund
BEAR STEARNS & CO., INC. $ 13,029
CITIGROUP, INC. 779,410
GOLDMAN SACHS GROUP, INC. 574,730
LEHMAN BROTHERS HOLDINGS, INC. 164,938
-------------------------------------------------------------------------------------------
57
Aggregate Value of
Holdings as of
Fund Name of Broker or Dealer March 31, 2008
------------------------------------------------ ------------------------------------------ ------------------
WisdomTree Europe SmallCap Dividend Fund
AWD HOLDINGS AG $ 408,884
BRIT INSURANCE HOLDINGS PLC 416,083
D. CARNEGIE AB 527,914
F&C ASSET MANAGEMENT PLC 580,037
JARDINE LLOYD THOMPSON GROUP PLC 440,096
------------------------------------------------------------------------------------------------------------------
WisdomTree Pacific ex-Japan Total Dividend Fund
AUSTRALIA & NEW ZEALAND BANKING GROUP LTD. $ 4,964,141
COMMONWEALTH BANK OF AUSTRALIA 6,604,139
HANG SENG BANK LTD. 3,597,735
NATIONAL AUSTRALIA BANK LTD. 5,651,953
WESTPAC BANKING CORP. 5,200,060
------------------------------------------------------------------------------------------------------------------
WisdomTree Pacific ex-Japan High-Yielding Equity Fund
AUSTRALIA & NEW ZEALAND BANKING GROUP LTD. $ 4,246,556
COMMONWEALTH BANK OF AUSTRALIA 4,573,998
HANG SENG BANK LTD 3,498,037
NATIONAL AUSTRALIA BANK LTD. 4,020,505
WESTPAC BANKING CORP. 4,828,678
------------------------------------------------------------------------------------------------------------------
WisdomTree International Dividend Top 100 Fund
BANCA INTESA SPA $ 8,359,196
COMMONWEALTH BANK OF AUSTRALIA 5,840,965
DNB NOR ASA 6,296,199
LLOYDS TSB GROUP PLC 6,504,190
WESTPAC BANKING CORP. 6,271,017
------------------------------------------------------------------------------------------------------------------
WisdomTree International MidCap Dividend Fund
ALLEANZA ASSICURAZIONI SPA $ 1,709,706
BANK OF EAST ASIA LTD. 913,673
HONGKONG EXCHANGES AND CLEARING LTD. 11,427,554
INSURANCE AUSTRALIA GROUP LTD. 1,316,920
TRYGVESTA AS 1,371,208
------------------------------------------------------------------------------------------------------------------
WisdomTree International SmallCap Dividend Fund
BENDIGO BANK LTD. $ 2,535,513
D. CARNEGE & CO. AB 2,440,677
F&C ASSET MANAGEMENT PLC 2,313,230
JARDINE LLOYD THOMPSON GROUP PLC 2,375,671
WING LUNG BANK LTD. 4,093,326
------------------------------------------------------------------------------------------------------------------
WisdomTree Emerging Markets High-Yielding Equity Fund
BANK LEUMI LE-ISREAL $ 1,969,587
KOOKMIN BANK BM 2,462,246
MALAYAN BANKING BHD 2,236,337
MEGA FINANCIAL HOLDINGS CO., LTD 1,921,065
PUBLIC BANK BHD 2,018,915
------------------------------------------------------------------------------------------------------------------
WisdomTree Emerging Markets SmallCap Dividend Fund
AFRICAN BANK INVESTMENTS LTD. $ 616,589
DISCOUNT INVESTMENT CORP. 653,151
IDB DEVELOPMENT CORP. LTD. 1,441,525
IDB HOLDING CORP. LTD. 791,218
METROPOLITAN HOLDINGS LTD. 445,158
------------------------------------------------------------------------------------------------------------------
WisdomTree International Real Estate Fund
KENEDIX, INC. $ 54,152
------------------------------------------------------------------------------------------------------------------
58
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.
The overall reasonableness of brokerage commissions is evaluated by the 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 table below sets forth the portfolio turnover rates of each Fund for the
fiscal years ended March 31, 2007 and 2008.
Portfolio Turnover Rate Portfolio Turnover Rate
for Fiscal Year Ended for Fiscal Year Ended
Name March 31, 2007 March 31, 2008
----------------------------------------------------------- ----------------------- -----------------------
WisdomTree Total Dividend Fund 12% 10%
---------------------------------------------------------------------------------------------------------------
WisdomTree High-Yielding Equity Fund 11 19
---------------------------------------------------------------------------------------------------------------
WisdomTree DEFA Fund 11 10
---------------------------------------------------------------------------------------------------------------
WisdomTree DEFA High-Yielding Equity Fund 19 16
---------------------------------------------------------------------------------------------------------------
WisdomTree Pacific ex-Japan High-Yielding Equity Fund 7 16
---------------------------------------------------------------------------------------------------------------
WisdomTree Pacific ex-Japan Total Dividend Fund 21 12
---------------------------------------------------------------------------------------------------------------
WisdomTree Europe Total Dividend Fund 24 15
---------------------------------------------------------------------------------------------------------------
WisdomTree Europe High-Yielding Equity Fund 24 21
---------------------------------------------------------------------------------------------------------------
WisdomTree Europe SmallCap Dividend Fund 47 22
---------------------------------------------------------------------------------------------------------------
WisdomTree Japan Total Dividend Fund 6 1
---------------------------------------------------------------------------------------------------------------
WisdomTree Japan High-Yielding Equity Fund 6 1
---------------------------------------------------------------------------------------------------------------
WisdomTree Japan SmallCap Dividend Fund 25 3
---------------------------------------------------------------------------------------------------------------
WisdomTree Dividend Top 100 Fund 21 16
---------------------------------------------------------------------------------------------------------------
WisdomTree LargeCap Dividend Fund 13 8
---------------------------------------------------------------------------------------------------------------
WisdomTree MidCap Dividend Fund 12 30
---------------------------------------------------------------------------------------------------------------
WisdomTree SmallCap Dividend Fund 16 34
---------------------------------------------------------------------------------------------------------------
WisdomTree International LargeCap Dividend Fund 8 15
---------------------------------------------------------------------------------------------------------------
WisdomTree International Dividend Top 100 Fund 8 24
---------------------------------------------------------------------------------------------------------------
WisdomTree International MidCap Dividend Fund 44 18
---------------------------------------------------------------------------------------------------------------
WisdomTree International SmallCap Dividend Fund 39 17
---------------------------------------------------------------------------------------------------------------
WisdomTree International Basic Materials Sector Fund 0* 11
---------------------------------------------------------------------------------------------------------------
WisdomTree International Communications Sector Fund 0* 19
---------------------------------------------------------------------------------------------------------------
WisdomTree International Consumer Discretionary Sector Fund 3 21
---------------------------------------------------------------------------------------------------------------
WisdomTree International Consumer Staples Sector Fund 2 8
---------------------------------------------------------------------------------------------------------------
WisdomTree International Energy Sector Fund 1 13
---------------------------------------------------------------------------------------------------------------
WisdomTree International Financial Sector Fund 5 15
---------------------------------------------------------------------------------------------------------------
WisdomTree International Industrial Sector Fund 1 11
---------------------------------------------------------------------------------------------------------------
WisdomTree International Technology Sector Fund 2 14
---------------------------------------------------------------------------------------------------------------
WisdomTree International Utilities Sector Fund 1 13
---------------------------------------------------------------------------------------------------------------
WisdomTree International Health Care Sector Fund 3 4
---------------------------------------------------------------------------------------------------------------
WisdomTree Total Earnings Fund 1 11
---------------------------------------------------------------------------------------------------------------
WisdomTree Earnings 500 Fund 1 8
---------------------------------------------------------------------------------------------------------------
WisdomTree MidCap Earnings Fund 0* 45
---------------------------------------------------------------------------------------------------------------
WisdomTree SmallCap Earnings Fund 0* 37
---------------------------------------------------------------------------------------------------------------
WisdomTree Earnings Top 100 Fund 2 13
---------------------------------------------------------------------------------------------------------------
WisdomTree Low P/E Fund 1 20
---------------------------------------------------------------------------------------------------------------
WisdomTree International Real Estate Fund N/A 15
---------------------------------------------------------------------------------------------------------------
WisdomTree Emerging Markets High-Yielding Equity Fund N/A 3
---------------------------------------------------------------------------------------------------------------
WisdomTree Emerging Markets SmallCap Dividend Fund N/A 6
---------------------------------------------------------------------------------------------------------------
WisdomTree India Earnings Fund N/A 0*
---------------------------------------------------------------------------------------------------------------
WisdomTree Middle East Dividend Fund** N/A N/A
---------------------------------------------------------------------------------------------------------------
----------
* Amount represents less than 1%.
** Information is not presented for this Fund as it had not commenced
operations as of March 31, 2008.
59
Additional Information Concerning the Trust
Shares. The Trust was established as a Delaware statutory trust on December 15,
2005. The Trust currently is comprised of 49 Funds. Each Fund issues shares of
beneficial interest, with $0.001 par value. The Board may designate additional
Funds. The Trust is registered with the SEC as an open-end management investment
company.
Each share issued by a Fund has a pro rata interest in the assets of that 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 relevant
Fund, and in the net distributable assets of such 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 vote together as a single class
except that, if the matter being voted on affects only a particular Fund, and,
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 (regardless of the Fund) have noncumulative
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
a Fund and immediately prior to the commencement of trading in such Fund's
shares, a holder of shares may be a "control person" of the Fund, as defined in
the 1940 Act. A Fund cannot predict the length of time for which one or more
shareholders may remain a control person of the Fund.
Shareholders may make inquiries by writing to the Trust, c/o ALPS Distributors,
Inc. at 1290 Broadway, Suite 1100, Denver, Colorado 80203.
Absent an applicable exemption or other relief from the SEC or its staff,
beneficial owners of more than 5% of the shares of a 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 a Fund and beneficial owners
of 10% of the shares of a 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 a Fund. The Trust or a 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 such 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 a
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 circumstance, the Trust may make redemptions
in-kind, for cash, or for a combination of cash or securities.
Role of DTC. DTC Acts as Securities Depository for the Shares of the Trust.
Shares of each 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 whom (and/or
their representatives) own DTC. More specifically, DTC is owned by a number of
its DTC Participants and by the NYSE, the AMEX and the NASD. Access to the DTC
system is also 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").
60
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 each 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,
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.
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 credit immediately DTC Participants' accounts
with payments in amounts proportionate to their respective beneficial interests
in shares of each 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 providing 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 & Redemption of Creation Unit Aggregations
Creation. The Trust issues and sells shares of each 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 (as defined
below), of an order in proper form.
A "Business Day" with respect to each Fund is any day on which the national
securities exchange on which the Fund is listed for trading (each a "Listing
Exchange") is open for business. As of the date of this SAI, each Listing
Exchange observes the following holidays: New Year's Day, Martin Luther King,
Jr. Day, Presidents' Day, Good Friday, Memorial Day (observed), Independence
Day, Labor Day, Thanksgiving Day and Christmas Day.
Fund Deposit. The consideration for purchase of Creation Unit Aggregations of a
Fund generally consists of the in-kind deposit of a designated portfolio of
equity securities (the "Deposit Securities"), which constitutes a substantial
replication, or a portfolio sampling representation, of the stocks involved in
the relevant Fund's underlying Index and an amount of cash (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 any
Fund.
The Cash Component is sometimes also referred to as the "Balancing Amount." The
Cash Component serves the function of compensating for any differences between
the NAV per Creation Unit Aggregation and the Deposit Amount (as defined below).
The Cash Component is an amount equal to the difference between the NAV of the
shares (per Creation Unit Aggregation) and the "Deposit Amount," which is an
amount equal to the market value
61
of the Deposit Securities. If the Cash Component is a positive number (i.e., the
NAV per Creation Unit Aggregation exceeds the Deposit Amount), the creator will
deliver the Cash Component. If the Cash Component is a negative number (i.e.,
the NAV per Creation Unit Aggregation is less than the Deposit Amount), the
creator will receive the Cash Component. Computation of the Cash Component
excludes any stamp duty tax or other similar fees and expenses payable upon
transfer of beneficial ownership of the Deposit Securities, which shall be the
sole responsibility of the Authorized Participant.
Each Fund, through the National Securities Clearing Corporation makes available
on each Business Day, prior to the opening of business on the applicable Listing
Exchange (currently 9:30 a.m., Eastern time), the list of the names and the
required number of shares of each Deposit Security to be included in the current
Fund Deposit (based on information at the end of the previous Business Day) for
each Fund.
Such Deposit Securities are applicable, subject to any adjustments as described
below, in order to effect creations of Creation Unit Aggregations of a given
Fund until such time as the next-announced composition of the Deposit Securities
is made available.
The identity and number of shares of the Deposit Securities required for a Fund
Deposit for each Fund changes as rebalancing adjustments and corporate action
events are reflected from time to time by the Trust with a view to the
investment objective of the relevant Fund. The composition of the Deposit
Securities may also change in response to adjustments to the weighting or
composition of the component securities of the relevant underlying Index.
In addition, the Trust reserves the right to permit or require the substitution
of an amount of cash (i.e., a "cash in lieu" amount) to be added to the Cash
Component 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
also reserves 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 restricted under the securities laws or where the delivery of
the Deposit Security to the Authorized Participant would result in the
disposition of the Deposit Security by the Authorized Participant becoming
restricted under the securities laws, or in certain other situations. The
adjustments described above will reflect changes known to the Trust on the date
of announcement to be in effect by the time of delivery of the Fund Deposit, in
the composition of the underlying Index being tracked by the relevant Fund or
resulting from certain corporate actions. The WisdomTree India Earnings Fund
intends to issue and redeem Creation Unit Aggregations solely for cash or a
specified amount of non-U.S. Currency in an amount equal to the NAV per Creation
Unit Aggregation. The other Fund's reserve the right to use this approach.
Procedures for Creation of Creation Unit Aggregations. To be eligible to place
orders with the Distributor and to create a Creation Unit Aggregation of a Fund,
an entity must be: (i) a "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) a DTC Participant, and, in each case, must have executed an
agreement with the Distributor with respect to creations and redemptions of
Creation Unit Aggregations ("Participant Agreement") (as discussed below). A
Participating Party and DTC Participant are collectively 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 a 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. Orders to create Creation Unit Aggregations of the International
Funds cannot be placed through the Clearing Process. Except as described herein,
all orders to create Creation Unit Aggregations, whether through the Clearing
Process (through a Participating Party) or outside the Clearing Process (through
a DTC Participant), must be received by the Distributor no later than the
closing time of the regular trading session on the applicable Listing Exchange
("Closing Time") (ordinarily 4:00 p.m., Eastern time) in each case on the date
such order is placed in order for creation of Creation Unit Aggregations to be
effected based on the NAV of shares of the applicable Fund as next determined on
such date after receipt of the order in proper form. Purchase Orders for
Creation Unit Aggregations of Shares of the India Earnings Fund and the Middle
East Dividend Fund use a different process. Purchase Orders for Creation Unit
Aggregations of Shares of the India Earnings Fund and the Middle East Dividend
Fund will be accepted only if they are placed after the Listing Exchange Closing
Time and before 5:30 p.m. Eastern time on any Business Day. Such Purchase
Orders, if accepted, will receive the next Business Day's net asset value per
Creation
62
Unit Aggregation. The date on which an order to create Creation Unit
Aggregations (or an order to redeem Creation Unit Aggregations, as discussed
below) is placed is referred to as the "Transmittal Date." Orders must be
transmitted by an Authorized Participant by telephone or other transmission
method acceptable to the Distributor pursuant to procedures set forth in the
Participant Agreement, as described below. Economic or market disruptions or
changes, or telephone or other communication failure, may impede the ability to
reach the Distributor or an Authorized Participant.
All orders to create Creation Unit Aggregations shall be placed with an
Authorized Participant, as applicable, in the form required by such Authorized
Participant. In addition, the Authorized Participant may request the 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,
therefore, orders to create Creation Unit Aggregations of a Fund have to be
placed by the 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 of Domestic Funds 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 of Domestic Funds 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 Cash Component.
Those placing orders for Creation Unit Aggregations of International Funds
should ascertain the applicable deadline for cash transfers by contacting the
operations department of the broker or depositary institution making the
transfer of the Cash Component. This deadline is likely to be significantly
earlier than the closing time of the regular trading session on the applicable
Listing Exchange. Investors should be aware that the Authorized Participant may
require orders for Creation Units placed with it to be in the form required by
the individual Authorized Participant, which form may not be the same as the
form of purchase order specified by the Trust that the Authorized Participant
must deliver to the Distributor.
Placement of Creation Orders for Domestic Dividend and Earnings Funds Using the
Clearing Process. The Clearing Process is the process of creating or redeeming
Creation Unit Aggregations. 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 to transmit
through BNY 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 for Domestic Dividend and Earnings Funds 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 third Business Day following the Transmittal Date. Each
Fund reserves the right to settle transactions on a basis other than T+3 "T"
plus three Business Days (i.e., days on which the NYSE is open) ("T+3"). In
certain cases Authorized Participants will create and redeem
63
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.
All questions as to the number of Deposit Securities 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, whose determination
shall be final and binding. The amount of cash equal to the Cash Component must
be transferred directly to BNY through the Federal Reserve Bank wire transfer
system in a timely manner so as to be received by BNY 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 BNY does not receive both the required Deposit Securities and the
Cash Component by 2:00 p.m. on the Settlement Date, such order may be canceled.
Upon written notice to the Distributor, such canceled order may be resubmitted
the following Business Day using a 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.
An additional charge of up to three (3) times the normal transaction fee (for a
total charge of up to four (4) times the normal transaction fee) may be imposed
with respect to transactions effected outside the Clearing Process (through a
DTC participant) and in the limited circumstances in which any cash can be used
in lieu of Deposit Securities to create Creation Units.
Creation Unit Aggregations of Domestic Funds 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, cash must be deposited
in an amount equal to the sum of (i) the Cash Component, plus (ii) at least
105%, which the Trust 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, such Authorized Participant
must deposit with BNY the appropriate amount of federal funds by 2:00 p.m.,
Eastern time, on the date of requested settlement. If the Authorized Participant
does not place its purchase order by the closing time or BNY 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 BNY, pending delivery of the missing Deposit
Securities to the extent necessary to maintain the Additional Cash Deposit with
the Trust in an amount at least equal to 105%, which the Trust 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
2:00 p.m., Eastern 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 cash on deposit to purchase the missing Deposit Securities. Authorized
Participants 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 BNY 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.
Placement of Creation Orders for International Funds. Fund Deposits in
connection with the International Funds will not be made either through the
Clearing Process or through DTC. For each International Fund, BNY shall cause
the sub-custodian of the Funds to maintain an account into which the Authorized
Participant shall deliver, on behalf of itself or the party on whose behalf it
is acting, the securities included in the designated Fund Deposit (or the cash
value of all or part of such securities, in the case of a permitted or required
cash purchase or "cash in lieu" amount), with any appropriate adjustments as
advised by the Trust. Deposit Securities must be delivered to an account
maintained at the applicable local sub-custodian(s). Except as described herein,
orders to purchase Creation Unit Aggregations must be received by the
Distributor from an Authorized Participant on its own or another investor's
behalf by the closing time of the regular trading session on the applicable
Listing Exchange on
64
the relevant Business Day. However, when a relevant local market is closed due
to local market holidays, the local market settlement process will not commence
until the end of the local holiday period. Settlement must occur by 2:00 p.m.,
Eastern time, on the contractual settlement date.
The Authorized Participant must also make available no later than 2:00 p.m.,
Eastern time, on the contractual settlement date, by means satisfactory to the
Trust, immediately-available or same-day funds estimated by the Trust to be
sufficient to pay the Cash Component next determined after acceptance of the
purchase order, together with the applicable purchase transaction fee. Any
excess funds will be returned following settlement of the issue of the Creation
Unit Aggregation.
To the extent contemplated by the applicable Participant Agreement, Creation
Unit Aggregations of International Funds will be issued to such Authorized
Participant notwithstanding the fact that the corresponding Fund Deposits have
not been received in part or in whole, in reliance on the undertaking of the
Authorized Participant to deliver the missing Deposit Securities as soon as
possible, which undertaking shall be secured by such Authorized Participant's
delivery and maintenance of collateral consisting of cash in the form of U.S.
dollars in immediately available funds having a value (marked to market daily)
at least equal to 110%, which WisdomTree Asset Management may change from time
to time of the value of the missing Deposit Securities. Such cash collateral
must be delivered no later than 2:00 p.m., Eastern time, on the contractual
settlement date. The Participant Agreement will permit the Fund to buy the
missing Deposit Securities at any time and will subject the Authorized
Participant to liability for any shortfall between the cost to the Trust of
purchasing such securities and the value of the collateral.
Cash Purchases. When, in the sole discretion of Trust, cash purchases of
Creation Unit Aggregations of Shares are available or specified for a 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 Trust's brokerage and other
transaction costs associated with using the cash to purchase the requisite
Deposit Securities, the Authorized Participant must pay a fixed purchase
Transaction Fee. The Transaction Fees for in-kind and cash purchases of Creation
Units of Shares are described in the Prospectus. The Trust requires purchases of
Creation Units of Shares of the India Earnings Fund and the Middle East Dividend
Fund to be paid in cash.
Acceptance of Orders for Creation Unit Aggregations. The Trust reserves the
absolute right to reject or revoke acceptance of a creation order transmitted to
it by the Distributor in respect of any Fund if: (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 any Fund; (iii) the Deposit
Securities delivered are not as disseminated through the facilities of the NSCC
for that date by the Fund as described above; (iv) acceptance of the Deposit
Securities would have certain adverse tax consequences to the Fund; (v)
acceptance of the Fund Deposit would, in the opinion of counsel, be unlawful;
(vi) 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 (vii) in the event that circumstances outside
the control of the Trust, BNY, 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, BNY or 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, BNY, 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 Transaction Fee. Each Fund imposes a "Transaction Fee" on investors
purchasing or redeeming Creation Units. For this reason, investors purchasing or
redeeming through the DTC Process generally will pay a higher
65
Transaction Fee than will investors doing so through the NSCC Process. The
Transaction Fee will be limited to amounts that have been determined by
WisdomTree Asset Management to be appropriate. The purpose of the Transaction
Fee is to protect the existing shareholders of the Funds from the dilutive costs
associated with the purchase and redemption of Creation Units. Where a Fund
permits an in-kind purchaser to deposit cash in lieu of depositing one or more
Deposit Securities, the purchaser may be assessed a higher Transaction Fee to
offset the transaction cost to the Fund of buying those particular Deposit
Securities. Transaction Fees will differ for each Fund, depending on the
transaction expenses related to each Fund's portfolio securities. Every
purchaser of a Creation Unit will receive a Prospectus that contains complete
disclosure about the Transaction Fee, including the maximum amount of the
Transaction Fee charged by the Fund. Investors who use the services of a broker
or other such intermediary may be charged a fee for such services.
The following table sets forth the standard and maximum creation transaction fee
for each of the Funds.
Standard Creation Maximum Creation
Name of Fund Transaction Fee Transaction Fee
----------------------------------------------------------- ----------------- ----------------
WisdomTree Total Dividend Fund $ 4,000 $ 8,500
WisdomTree High-Yielding Equity Fund 2,200 2,500
WisdomTree LargeCap Dividend Fund 1,500 2,000
WisdomTree Dividend Top 100 Fund 500 600
WisdomTree MidCap Dividend Fund 2,500 3,000
WisdomTree SmallCap Dividend Fund 4,000 4,500
WisdomTree Total Earnings Fund 5,500 12,090
WisdomTree Earnings 500 Fund 2,500 2,500
WisdomTree MidCap Earnings Fund 3,500 4,000
WisdomTree SmallCap Earnings Fund 4,000 5,705
WisdomTree Earnings Top 100 Fund 500 500
WisdomTree Low P/E Fund 2,000 3,500
WisdomTree DEFA Fund 15,000 50,000
WisdomTree DEFA High-Yielding Equity Fund 9,500 20,000
WisdomTree Europe Total Dividend Fund 7,500 25,000
WisdomTree Europe High-Yielding Equity Fund 2,500 7,500
WisdomTree Europe SmallCap Dividend Fund 10,000 11,000
WisdomTree Japan Total Dividend Fund 4,000 10,000
WisdomTree Japan High-Yielding Equity Fund 2,500 3,500
WisdomTree Japan SmallCap Dividend Fund 5,000 6,000
WisdomTree Pacific ex-Japan Total Dividend Fund 8,000 18,500
WisdomTree Pacific ex-Japan High-Yielding Equity Fund 3,500 4,500
WisdomTree International LargeCap Dividend Fund 6,000 8,000
WisdomTree International Dividend Top 100 Fund 2,500 3,500
WisdomTree International MidCap Dividend Fund 8,000 20,000
WisdomTree International SmallCap Dividend Fund 10,000 25,000
WisdomTree Emerging Markets High-Yielding Equity Fund 7,000 27,000
WisdomTree Emerging Markets SmallCap Dividend Fund 7,000 21,000
WisdomTree India Earnings Fund 5,000 20,000
WisdomTree International Basic Materials Sector Fund 4,000 5,000
WisdomTree International Communications Sector Fund 3,250 5,100
WisdomTree International Consumer Discretionary Sector Fund 9,500 11,500
WisdomTree International Consumer Staples Sector Fund 8,000 10,500
WisdomTree International Energy Sector Fund 1,250 2,000
WisdomTree International Financial Sector Fund 9,000 14,000
WisdomTree International Health Care Sector Fund 2,250 3,500
WisdomTree International Industrial Sector Fund 9,500 12,500
WisdomTree International Technology Sector Fund 2,000 2,500
WisdomTree International Utilities Sector Fund 1,500 2,500
WisdomTree International Real Estate Fund 6,500 10,150
WisdomTree Middle East Dividend Fund 6,500 26,000
---------------------------------------------------------------------------------------------
Placement of Redemption Orders for Domestic Dividend and Earnings Funds Using
the Clearing Process. Orders to redeem Creation Unit Aggregations of Domestic
Equity Funds 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 BNY (in its capacity as Transfer Agent) not later than
the Closing Time on such
66
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 requisite Fund Securities and the Cash
Redemption Amount generally will be transferred by the third NSCC Business Day
following the date on which such request for redemption is deemed received.
Placement of Redemption Orders for Domestic Dividend and Earnings Funds Outside
the Clearing Process. Orders to redeem Creation Unit Aggregations of Domestic
Funds outside the Clearing Process must be delivered through a DTC Participant
that has executed the Participant Agreement. A DTC Participant who wishes to
place an order for redemption of 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 redemption of Creation Unit Aggregations will instead be effected through
transfer of shares directly through DTC. 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 BNY (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 BNY no
later than 11:00 a.m., Eastern time, on the contracted settlement date; 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 three
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.
Placement of Redemption Orders for International Funds. Orders to redeem
Creation Unit Aggregations of International Funds must be delivered through an
Authorized Participant that has executed a Participant Agreement. Investors
other than Authorized Participants are responsible for making arrangements for a
redemption request to be made through an Authorized Participant. Except as
described herein, an order to redeem Creation Unit Aggregations of International
Funds is deemed received by the Trust on the Transmittal Date if: (i) such order
is received by BNY (in its capacity as Transfer Agent) not later than the
Closing Time on the 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 BNY no later than 10:00 a.m., Eastern time,
on the next Business Day following the Transmittal Date; and (iii) all other
procedures set forth in the Participant Agreement are properly followed.
Deliveries of Fund Securities to redeeming investors generally will be made
within three Business Days. Due to the schedule of holidays in certain
countries, however, the delivery of in-kind redemption proceeds for
International Funds may take longer than three Business Days after the day on
which the redemption request is received in proper form. In such cases, the
local market settlement procedures will not commence until the end of the local
holiday periods. See below for a list of the local holidays in the foreign
countries relevant to the International Funds.
In connection with taking delivery of shares of Fund Securities upon redemption
of shares of International Funds, a redeeming Beneficial Owner, or Authorized
Participant action on behalf of such Beneficial Owner must maintain appropriate
security arrangements with a qualified broker-dealer, bank or other custody
provider in each jurisdiction in which any of the Fund Securities are
customarily traded, to which account such Fund Securities will be delivered.
To the extent contemplated by an Authorized Participant's agreement, in the
event the Authorized Participant has submitted a redemption request in proper
form but is unable to transfer all or part of the Creation Unit Aggregation to
be redeemed to the Funds' Transfer Agent, the Transfer Agent will nonetheless
accept the redemption request in reliance on the undertaking by the Authorized
Participant to deliver the missing shares as soon as possible. Such undertaking
shall be secured by the Authorized Participant's delivery and maintenance of
collateral consisting of cash having a value (marked to market daily) at least
equal to 110%, which WisdomTree Asset Management may change from time to time,
of the value of the missing shares.
The current procedures for collateralization of missing shares require, among
other things, that any cash collateral shall be in the form of U.S. dollars in
immediately-available funds and shall be held by BNY and marked to market daily,
and that the fees of BNY and any sub-custodians in respect of the delivery,
maintenance and redelivery of
67
the cash collateral 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 BNY 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. Therefore, if a
redemption order in proper form is submitted to BNY by a DTC Participant not
later than Closing Time on the Transmittal Date, and the requisite number of
shares of the relevant Fund are delivered to BNY prior to the DTC Cut-Off-Time,
then the value of the Fund Securities and the Cash Redemption Amount to be
delivered will be determined by BNY on such Transmittal Date. If, however, a
redemption order is submitted to BNY by a DTC Participant not later than the
Closing Time on the Transmittal Date but either (i) the requisite number of
shares of the relevant Fund are not delivered by the DTC Cut-Off-Time, as
described above, on such Transmittal Date, or (ii) the redemption order is not
submitted in proper form, then the redemption order will not be deemed received
as of the Transmittal Date. In such case, the value of the Fund Securities and
the Cash Redemption Amount to be delivered will be computed on the Business Day
that such order is deemed received by the Trust, i.e., the Business Day on which
the shares of the relevant Fund are delivered through DTC to BNY by the DTC
Cut-Off-Time on such Business Day pursuant to a properly submitted redemption
order.
If it is not possible to effect deliveries of the Fund Securities, the Trust may
in its discretion exercise its option to redeem such shares in cash, and the
redeeming Beneficial Owner will be required to receive its redemption proceeds
in cash. 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
relevant 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). A Fund
may also, in its sole discretion, upon request of a shareholder, 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 each 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 stock 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 an International Fund may trade on the
relevant exchange(s) on days that the Listing Exchange for the International
Fund is closed or are otherwise not Business Days for such International Fund,
stockholders may not be able to redeem their shares of such International Fund,
or to purchase and sell shares of such International Fund on the Listing
Exchange for the International Fund, on days when the NAV of such International
Fund could be significantly affected by events in the relevant foreign markets.
Cash Redemptions. In the event that, in the sole discretion of Trust, cash
redemptions are permitted or required by Trust, 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. The Trust intends to pay
redemptions of Creation Unit Aggregations of Shares of the India Earnings Fund
and Middle East Dividend Fund in cash.
REGULAR HOLIDAYS. Each Fund generally intends to effect deliveries of Creation
Unit Aggregations and Portfolio Securities on a basis of T+3. Each Fund may
effect deliveries of Creation Unit Aggregations and Portfolio Securities on a
basis other than T plus three in order to accommodate local holiday schedules,
to account for different treatment among foreign and U.S. markets of dividend
record dates and ex-dividend dates, or under certain
68
other circumstances. The ability of the Trust to effect in-kind creations and
redemptions within three 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. In addition to
holidays, other unforeseeable closings in a foreign market due to emergencies
may also prevent the Trust from delivering securities within normal settlement
period.
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 Funds, in certain circumstances. The holidays applicable to each Fund
during such periods are listed below, as are instances where more than seven
days will be needed to deliver redemption proceeds. Although certain holidays
may occur on different dates in subsequent years, the number of days required to
deliver redemption proceeds in any given year is not expected to exceed the
maximum number of days listed below for each Fund. The proclamation of new
holidays, the 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, could affect the
information set forth herein at some time in the future.
Listed below are the dates in calendar year 2008 in which the regular holidays
in non-U.S. markets may impact Fund Settlement. This list may not be complete
and is subject to change:
Argentina
Jan 1 Jun 16 Dec 25
March 20, 21, 24 July 9
April 2 Aug 18
May 1 Nov 8
Australia
Jan 1, 28 Dec 25
Mar 21, 24 Dec 26
Apr 25
Jun 9
Austria
Jan 1 Aug 15
March 21, 24 Dec 8
May 1, 12 Dec 25
May 22 Dec 26
Bahrain
Jan 1, 10, 20, 21 Dec 8, 9, 10
March 20 Dec 16, 17
May 1, 14
Oct 1, 2
Belgium
Jan 1
March 21, 24
May 1
Dec 25, 26
Brazil
Jan 1 May 1, 22
Feb 4, 5 July 9
Mar 21 Nov 20
Apr 21 Dec 25, 24
Canada
Jan 1 Jul 1 Dec 25
Feb 18 Aug 4 Dec 26
March 21 Sep 1
May 19 Oct 13
69
Chile
Jan 1 July 16 Dec 8
March 21 Aug 15 Dec 25, 31
Apr 14 Sep 18
May 1, 21 Sep 19
China (Shanghai)
Jan 1 May 2 Oct 3
Feb 6, 7, 8, 11, 12 June 9
Apr 4 Sept 15, 29, 30
May 1 Oct 1, 2
China (Shenzhen)
Jan 1 May 2 Oct 2
Feb 6, 7, 8, 11, 12 June 9 Oct 3
Apr 4 Sept 15, 29, 30
May 1 Oct 1
Denmark
Jan 1 May 1, 12
Mar 20, 21, 24 Jun 5
Apr 18 Dec 25, 24, 31
Apr 18 Dec 26
Egypt
Jan 1, 7, 9, 20 Oct 2, 6, 9
April 27, 28 Dec 10, 25
May 1
July 23
Finland
Jan 1 Dec 25, 26, 31
March 21, 24
May 1
Jun 20
France
Jan 1 Dec 26
March 21, 24
May 1
Dec 25
Greece
Jan 1 Apr 21 Aug 15
Mar 10, 21 Apr 24 Dec 25
Apr 14 May 1 Dec 26
Apr 17 Jun 12
Germany
Jan 1 June 16 Dec 26
March 21, 24, 10, 25 Aug 15
April 25, 28 Oct 28
May 1 Dec 25
Hong Kong
Jan 1 May 1, 12 Oct 1, 7
Feb 7, 8 June 9 Dec 25
March 21, 24 July 1 Dec 26
Apr 4 Sept 15
India
March 6, 20, 21 Sept 3
Apr 14, 18 Oct 2, 9, 28, 30
May 1, 19 Dec 9, 25
Aug 15, 19
70
Ireland
Jan 1 Dec 25
March 21, 24 Dec 26
May 5
Jun 2
Israel
Mar 21 Aug 10 Oct 9, 13, 14, 19, 20, 21
Apr 20 Sept 29, 30
May 7, 8 Oct 1
Jun 8, 9 Oct 8
Italy
Jan 1 Aug 15
March 21, 24 Dec 25
Apr 25 Dec 26
May 1
Japan
Jan 1, 2 April 29 Nov 3
Jan 3 May 5, 6 Nov 24
Jan 14 Jul 21 Dec 23, 31
Feb 11 Sep 15, 23
Mar 20 Oct 13
Jordan
Jan 1,10, 30 Oct 1, 2, 6
March 20 Dec 8, 9, 10, 11
May 1, 25
Sept 30
Kuwait
Jan 1, 9 July 30
Feb 25, 26 Oct 2, 5
March 20 Dec 8, 9, 10, 11
May 14, 15
Malaysia
Jan 1 May 1, 19 Dec 25, 8, 29
Jan 10, 23 Sept 1
Feb 1, 7, 8 Oct 1, 2
March 20 Oct 27
Mexico
Jan 1 May 1 Dec 12
Feb 4 Sept 16 Dec 25
March 17, 20, 21 Nov 17
Morocco
Jan 1, 10,11 Aug 14, 20, 21
March 20, 21 Oct 1, 2
May 1 Nov 6, 18
July 30 Dec 9, 10
New Zealand
Jan 1 Apr 25 Dec 26
Jan 2 Jun 2
Feb 6 Oct 27
March 21, 24 Dec 25
Netherlands
Jan 1 Dec 26
March 21, 24
May 1
Dec 25
71
Norway
Jan 1 Dec 26
March 20, 21, 24
May 1, 12
Dec 25, 24
Oman
Jan 1, 10, 12 Nov 18, 19
March 22 Dec 7, 8, 9,10
July 23, 30
Oct 1, 2
Portugal
Jan 1 Dec 26
March 21, 24, 25
May 1
Dec 25
Qatar
Jan 1
Oct 1, 2
Dec 7, 8, 9, 10, 11, 18
Singapore
Jan 1 Oct 1, 28
Feb 7, 8 Dec 8, 25
March 21
May 1, 19
South Africa
Jan 1 Jun 16
Mar 21, 24 Sep 24
Apr 28 Dec 16, 25
May 1 Dec 26
South Korea
Jan 1 May 31 Oct 3
Feb 6, 7, 8 Jun 6 Oct 6
Apr 9 Jul 17 Dec 25
May 1 Aug 15 Dec 31
May 5, 12 Sept 15
Spain
Jan 1, 7 Dec 25
March 21, 24 Dec 26
May 1
Sweden
Jan 1 Jun 6
March 21, 24 Dec 24, 25
May 1 Dec 26, 31
Switzerland
Jan 1, 2 May 12 Dec 26
March 21, 24 Aug 1
May 1 Dec 25
Taiwan
Jan 1 May 1
Feb 6, 7, 8, 11, 28 Oct 10
Apr 4
Thailand
Jan 1 May 5 Oct 23
Feb 21 May 19 Dec 5
Apr 7, 14, 15 Jul 1, 17 Dec 10
May 1 Aug 12
72
U.A.E.
Jan 1, 10, 14* Dec 2, 7, 8, 9, 28
March 20
July 31
Oct 1, 2
United Kingdom
Jan 1 Aug 25
March 21, 24 Dec 25
May 5, 26 Dec 26
United States
Jan 1 May 26 Dec 25
Jan 21 Jul 4
Feb 18 Sep 1
March 21 Nov 27
----------
* Dubai Financial Market only. Regular working day in Abu Dubai.
Taxes
The following discussion of certain U.S. federal income tax consequences of
investing in the Funds is based on the Code, U.S. 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 Funds. 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. Each Fund intends to elect to
be treated and 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, each Fund must, among other things:
(a) derive at least 90% of its gross income each year from (i) dividends,
interest, payments with respect to 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);
(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 a 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 a 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 a Fund's total assets is invested in (x) 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 a Fund and that
are engaged in the same, similar or related trades or businesses or (y)
the securities of one or more qualified publicly traded partnerships; and
(c) distribute with respect to each taxable year at least 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 net tax-exempt interest income.
In general, for purposes of the 90% of gross income requirement 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 a Fund.
However, 100% of the net income derived from an interest in a "qualified
publicly traded partnership" (generally, a partnership (x) interests in which
are traded on an established securities market or are readily tradable on a
secondary market or the substantial equivalent thereof, (y) that derives at
least 90% of its income from the passive income sources specified in Code
section 7704(d), and (z) that derives less than 90% of its income from the
qualifying income described in (a)(i) of
73
the prior paragraph) will be treated as qualifying income. In addition, although
in general the passive loss rules of the Code do not apply to RICs, such rules
do apply to a RIC with respect to items attributable to an interest in a
qualified publicly traded partnership.
Taxation of the Funds. If a Fund qualifies as a RIC, that 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 a Fund fails to qualify for any taxable year as a RIC, all of its taxable
income (including its net capital gains) will be subject to tax at corporate
income tax rates without any deduction for distributions to shareholders, and
all distributions from earnings and profits, including any distributions of net
long-term capital gains and net tax-exempt income, would be taxable to
shareholders as dividend income. In addition, a Fund could be required to
recognize unrealized gains, pay substantial taxes and interest and make
substantial distributions before requalifying as a RIC that is accorded special
tax treatment.
Each Fund intends to distribute at least annually to its shareholders
substantially all of its investment company taxable income and its net capital
gains. Investment company taxable income that is retained by a Fund will be
subject to tax at regular corporate rates. If a Fund retains any net capital
gain, that gain will be subject to tax at corporate rates, 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, and (ii) will be entitled to credit their proportionate shares of the
tax paid by the Fund on such undistributed amount against their federal income
tax liabilities, if any, and to claim refunds on a properly-filed U.S. tax
return to the extent the credit exceeds such liabilities. For federal income tax
purposes, the tax basis of shares owned by a shareholder of that 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 under clause (ii) of the preceding sentence.
If a 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% 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 nondeductible 4%
excise tax on the undistributed amount. For these purposes, a 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. A
dividend paid to shareholders in January of a year generally is deemed to have
been paid by a Fund on December 31 of the preceding year if the dividend was
declared and payable to shareholders of record on a date in October, November,
or December of that preceding year. Each 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.
Fund Distributions. Distributions are taxable whether shareholders receive them
in cash or reinvest them in additional shares. Moreover, distributions on the
Funds' shares are generally subject to federal income tax as described herein to
the extent they do not exceed the Funds' realized income and gains, even though
such dividends and distributions may economically represent a return of a
particular shareholder's investment. Such distributions are likely to occur in
respect of shares purchased at a time when a Fund's net asset value reflects
gains that are either unrealized, or realized but not distributed. Such realized
gains may be required to be distributed even when a Fund's net asset value also
reflects unrealized losses.
Distributions by the Funds of investment income are generally taxable as
ordinary income. Taxes on distributions of capital gains are determined by how
long a Fund owned the investments that generated those gains, rather than how
long a shareholder has owned his or her Fund shares. Distributions of net
capital gains from the sale of investments that the Funds owned for more than
one year and that are properly designated by the Funds as capital gain dividends
("Capital Gain Dividends") will be taxable as long-term capital gains.
Distributions from capital gains are generally made after applying any available
capital loss carryovers. Long-term capital gain rates applicable to individuals
have been temporarily reduced - in general, to 15%, with lower rates applying to
taxpayers in the 10% and 15% rate brackets - for taxable years beginning before
January 1, 2011. Distributions of gains from the sale of investments that the
Fund owned for one year or less will be taxable as ordinary income.
In determining its net capital gain for Capital Gain Dividend purposes, a RIC
generally must treat any net capital loss or any net long-term capital loss
incurred after October 31 as if it had been incurred in the succeeding year.
74
Treasury Regulations permit a RIC, in determining its taxable income, to elect
to treat all or a part of any net capital loss, any net long-term capital loss
or any foreign currency loss incurred after October 31 as if it had been
incurred in the succeeding year.
For taxable years beginning before January 1, 2011, distributions of investment
income designated by a Fund as derived from "qualified dividend income" will be
taxed in the hands of individuals 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 a 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.
In general, distributions of investment income designated by a Fund as derived
from qualified dividend income will be treated as qualified dividend income by a
shareholder taxed as an individual, provided the shareholder meets the holding
period and other requirements described above with respect to a Fund's shares.
If the aggregate qualified dividends received by a Fund during any taxable year
are 95% or more of its gross income (excluding net long-term capital gain over
net short-term capital loss), then 100% of a Fund's dividends (other than
dividends properly designated as Capital Gain Dividends) will be eligible to be
treated as qualified dividend income.
Dividends of net investment income received by corporate shareholders of a Fund
will qualify for the 70% dividends received deduction generally available to
corporations to the extent of the amount of qualifying dividends received by the
Funds from domestic corporations for the taxable year. A dividend received by a
Fund will not be treated as a qualifying dividend (1) if the stock on which the
dividend is paid is considered to be "debt-financed" (generally, acquired with
borrowed funds), (2) if it has been received with respect to any share of stock
that the Fund has held for less than 46 days during the 91-day period beginning
on the date that is 45 days before the date on which the share becomes
ex-dividend with respect to such dividend (91 days during the 181-day period
beginning 90 days before the ex-dividend date in the case of certain preferred
stock) or (3) to the extent that the Fund is under an obligation (pursuant to a
short sale or otherwise) to make related payments with respect to positions in
substantially similar or related property. Moreover, the dividends received
deduction may be disallowed or reduced (1) if the corporate shareholder fails to
satisfy the foregoing requirements with respect to its shares of a Fund or (2)
by application of the Code.
To the extent that a 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.
If a Fund makes distributions to a shareholder in excess of the Fund's current
and accumulated earnings and profits in any taxable year, the excess
distribution will be treated as a return of capital to the extent of the
shareholder's tax basis in its shares, and thereafter as capital gain. A return
of capital is not taxable, but reduces a shareholder's tax basis in its shares,
thus reducing any loss or increasing 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 Funds may give
rise to a gain or loss. In general, 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
75
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 other substantially identical shares of a 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 Funds (or financial intermediaries, such as brokers,
through which a shareholder holds Fund shares) generally are 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 28%
for amounts paid through 2010. This rate will expire and the backup withholding
rate will be 31% for amounts paid after December 31, 2010, unless Congress
enacts legislation providing otherwise.
Federal Tax Treatment of Certain Fund Investments. Transactions of the Funds in
options, futures contracts, hedging transactions, forward contracts, swap
agreements, participation certificates, straddles and foreign currencies may be
subject to various special and complex tax rules, including mark-to-market,
constructive sale, straddle, wash sale and short sale rules. These rules could
affect whether gains and losses recognized by a Fund are treated as ordinary
income or capital gain, accelerate the recognition of income to a Fund, or defer
a Fund's ability to recognize losses. These rules may in turn affect the amount,
timing or character of the income distributed to shareholders by a Fund.
Foreign Investments. Income received by a Fund from sources within foreign
countries (including, for example, dividends or interest on stock or securities
of non-U.S. issuers) may be subject to withholding and other taxes imposed by
such countries. Tax treaties between such countries and the U.S. may reduce or
eliminate such taxes. If as of the end of a Fund's taxable year more than 50% a
Fund's assets consist of the securities of foreign corporations, that Fund may
elect to permit shareholders to claim a credit or deduction on their income tax
returns for their pro rata portions of qualified taxes paid by that Fund during
that taxable year to foreign countries in respect of foreign securities the Fund
has held for at least the minimum period specified in the Code. In such a case,
shareholders will include in gross income from foreign sources their pro rata
shares of such taxes. A shareholder's ability to claim a foreign tax credit or
deduction in respect of foreign taxes paid by a Fund may be subject to certain
limitations imposed by the Code, which may result in the shareholder not getting
a full credit or deduction for the amount of such taxes. Shareholders who do not
itemize on their federal income tax returns may claim a credit, but not a
deduction, for such foreign taxes.
Investment in PFICs. Equity investments by a Fund in certain "passive foreign
investment companies" ("PFICs") could potentially subject the Fund to a U.S.
federal income tax (including interest charges) on distributions received from
the PFICs or on proceeds received from dispositions of shares in the PFICs. This
tax cannot be eliminated by making distributions to Fund shareholders. However,
a Fund may elect to avoid the imposition of that tax. For example, a Fund may
make an election to mark the gains (and to a limited extent losses) of a PFIC
"to the market" as though it had sold and repurchased its holdings in the PFIC
on the last day of the Fund's taxable year. A Fund may also, in certain
circumstances, elect to treat a PFIC as a "qualified electing fund" (i.e., make
a "QEF election"), in which case the Fund will be required to include as income
its share of the company's income and net capital gains annually, regardless of
whether it receives any distribution from the company. Such gains and losses are
treated as ordinary income and loss. The mark-to-market and QEF elections may
accelerate the recognition of income (without the receipt of cash) and increase
the amount required to be distributed by a Fund to avoid taxation. Making either
of these elections therefore may require a Fund to liquidate other investments
(including when it is not advantageous to do so) to meet its distribution
requirement, which also may accelerate the recognition of gain and affect a
Fund's total return. Dividends paid by PFICs will not be eligible to be treated
as "qualified dividend income."
Additional Tax Information Concerning REITs. Each Fund may invest in REITs.
Investments in REIT equity securities may require a Fund to accrue and
distribute income not yet received. To generate sufficient cash to make the
requisite distributions, a Fund may be required to sell securities in its
portfolio (including when it is not
76
advantageous to do so) that it otherwise would have continued to hold. A Fund's
investments in REIT equity securities may at other times result in a Fund's
receipt of cash in excess of the REIT's earnings; if a Fund distributes these
amounts, these distributions could constitute a return of capital to Fund
shareholders for federal income tax purposes. Dividends received by a Fund from
a REIT generally will not constitute qualified dividend income.
A Fund may invest in REITs that hold residual interests in real estate mortgage
investment conduits ("REMICs") or which are, or have certain wholly-owned
subsidiaries that are, "taxable mortgage pools" ("TMPs"). Under certain Treasury
guidance, a portion of a Fund's income from a REIT that is attributable to the
REITis residual interest in a REMIC or equity interests in a TMP (referred to in
the Code as an "excess inclusion") will be subject to federal income tax in all
events. This guidance provides that excess inclusion income of a RIC, such as a
Fund, must generally be allocated to shareholders of the RIC in proportion to
the dividends received by such shareholders, with the same consequences as if
the shareholders held the related REMIC residual interest or TMP interests
directly. In general, excess inclusion income allocated to shareholders (i)
cannot be offset by net operating losses (subject to a limited exception for
certain thrift institutions), (ii) will constitute unrelated business taxable
income to entities (including a qualified pension plan, an individual retirement
account, a 401(k) plan, a Keogh plan or other tax-exempt entity) subject to tax
on unrelated business income, thereby potentially requiring such an entity that
is allocated excess inclusion income, and otherwise might not be required to
file a tax return, to file a tax return and pay tax on such income (see "Taxes -
Tax-Exempt Shareholders" below), and (iii) in the case of a foreign shareholder,
will not qualify for any reduction in U.S. federal withholding tax. No Fund
intends to invest a substantial portion of its assets in REITs which generate
excess inclusion income.
Tax-Exempt Shareholders. Under current law, income of a RIC that would be
treated as UBTI if earned directly by a tax-exempt entity generally will not be
attributed as UBTI to a tax-exempt entity that is a shareholder in the RIC.
Notwithstanding this "blocking" effect, a tax-exempt shareholder could realize
UBTI by virtue of its investment in a Fund if shares in that Fund constitute
debt-financed property in the hands of the tax-exempt shareholder within the
meaning of Code Section 514(b). A tax-exempt shareholder may also recognize UBTI
if a Fund recognizes excess inclusion income derived from direct or indirect
investments in REMICs or TMPs.
In addition, special tax consequences apply to charitable remainder trusts
("CRTs") that invest in RICs that invest directly or indirectly in residual
interests in REMICs or TMPs. Under legislation enacted in December 2006, a CRT
(as defined in Section 664 of the Code) that realizes any UBTI for a taxable
year must pay an excise tax annually of an amount equal to such UBTI. Under IRS
guidance issued in October 2006, a CRT will not recognize UBTI as a result of
investing in a Fund that recognizes "excess inclusion income." Rather, if at any
time during a taxable year a CRT (or one of certain other tax-exempt
shareholders, such as the United States, a state or political subdivision, or an
agency or instrumentality thereof, and certain energy cooperatives) is a record
holder of a share in a Fund that recognizes "excess inclusion income," then a
Fund will be subject to a tax on that portion of its "excess inclusion income"
for the taxable year that is allocable to such shareholders at the highest
federal corporate income tax rate. The extent to which this IRS guidance remains
applicable in light of the December 2006 legislation is unclear. To the extent
permitted under the 1940 Act, each Fund may elect to specially allocate any such
tax to the applicable CRT, or other shareholder, and thus reduce such
shareholder's distributions for the year by an amount of the tax that relates to
that shareholder's interest in a Fund. The Funds have not yet determined whether
such an election will be made. CRTs are urged to consult their tax advisors
concerning the consequences of investing in the Funds. The Funds do not intend
to invest directly or indirectly in residual interests in REMICs.
Non-U.S. Shareholders. In general, dividends other than Capital Gain Dividends
paid by a Fund to a shareholder that is not a "U.S. person" within the meaning
of the Code (a "foreign person") are subject to withholding of U.S. federal
income tax at a rate of 30% (or lower applicable treaty rate) even if they are
funded by income or gains (such as portfolio interest, short-term capital gains,
or foreign-source dividend and interest income) that, if paid to a foreign
person directly, would not be subject to withholding.
Effective for taxable years beginning before January 1, 2008, and assuming
certain certification requirements were complied with, a RIC generally was not
required to withhold any amounts (i) with respect to distributions attributable
to U.S.-source interest income that would be treated as "portfolio interest" and
accordingly would not be subject to U.S. federal income tax if earned directly
by an individual foreign person, and (ii) with respect to distributions of net
short-term capital gains in excess of net long-term capital losses, in each case
to the extent such
77
distributions were properly designated by the RIC. Pending legislation would
extend the exemption from withholding for interest-related and short-term
capital gain distributions. At the time of this filing, it is unclear whether
the legislation will be enacted and, if enacted, what the term of the extension
will be. Even if such legislation is enacted, depending on the circumstances,
the Funds may make such designations with respect to all, some or none of their
potentially eligible dividends or treat such dividends, in whole or in part, as
ineligible for this exemption from withholding. Moreover, in the case of shares
held through an intermediary, the intermediary may withhold even if a Fund makes
a designation with respect to a payment.
A beneficial holder of shares who is a foreign 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 a 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.
In order for a foreign investor to qualify for an exemption from backup
withholding, the foreign investor must comply with special certification and
filing requirements. Foreign investors in the Funds should consult their tax
advisors in this regard. 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 Internal
Revenue Service.
A beneficial holder of shares who is a foreign 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 effectively connected income or gain will
generally be subject to U.S. federal income tax on a net basis only if it is
also attributable to a permanent establishment maintained by the shareholder in
the United States.
Creation and Redemption of Creation Units. An Authorized Participant who
exchanges securities for Creation Units generally will recognize a gain or a
loss. The gain or loss will be equal to the difference between the market value
of the Creation Units at the time and the sum of the exchanger's aggregate basis
in the securities surrendered plus the 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 market value of any securities received plus the
amount of any cash received for such Creation Units. The Internal Revenue
Service, however, may assert that a loss realized upon an exchange of securities
for Creation Units cannot be deducted currently under the rules governing "wash
sales," or on the basis that there has been no significant change in economic
position. Any capital gain or loss realized upon the creation of Creation Units
will generally be treated as long-term capital gain or loss if the securities
exchanged for such Creation Units have been held for more than one year.
Any capital gain or loss realized upon the redemption of Creation Units will
generally be treated as long-term capital gain or loss if the shares comprising
the Creation Units have been held for more than one year. Otherwise, such
capital gains or losses will be treated as short-term capital gains or losses.
In some circumstances, a redemption of Creation Units may be treated as
resulting in a distribution to which section 301 of the Code applies,
potentially causing amounts received by the shareholder in the redemption to be
treated as dividend income rather than as a payment in exchange for Creation
Units. The rules for determining when a redemption will be treated as giving
rise to a distribution under section 301 of the Code and the tax consequences of
Code section 301 distributions are complex.
Persons purchasing or redeeming Creation Units should consult their own tax
advisors with respect to the tax treatment of any creation or redemption
transaction.
Section 351. The Trust on behalf of each Fund has the right to reject an order
for a purchase of shares of the Trust if the purchaser (or group of purchasers)
would, upon obtaining the shares so ordered, own 80% or more of the outstanding
shares of a given Fund and if, pursuant to Section 351 of the Code, that 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.
78
Tax Shelter Reporting Regulations. Under U.S. Treasury regulations, if a
shareholder recognizes a loss of $2 million or more for an individual
shareholder or $10 million or more for a corporate shareholder, the shareholder
must file with the Internal Revenue Service a disclosure statement on 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. Future guidance may extend the current exception from this reporting
requirement to shareholders of most or all RICs. The fact that a loss is
reportable under these 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 regulations
in light of their individual circumstances.
Taxation of the India Portfolio
As discussed, the India Earnings Fund invests in Indian securities through the
WisdomTree India Investment Portfolio, Inc. (the "India Portfolio"), a
wholly-owned subsidiary organized under Mauritius law. Investors should note
that taxation in India of the income of the India Portfolio arising from its
investments in India, and therefore the tax liability of the Fund, is expected
to be minimized under the provisions of the India Mauritius Double Tax Avoidance
Treaty (the "Treaty"). While the validity of this treaty and its applicability
to entities such as the Fund was recently upheld by the Supreme Court of India,
no assurance can be given that the terms of the Treaty will not be subject to
re-intepretation and re-negotiation in the future. Any change in the Treaty's
application could have a material adverse affect on the tax status of the India
Portfolio and therefore the returns of the India Portfolio and the returns of
the India Earnings Fund. Further, it is possible that the Indian tax authorities
may seek to take the position that the India Portfolio is not entitled to the
benefits of the Treaty.
In order to claim the benefits of the Treaty, the India Portfolio must be a tax
resident of Mauritius. The India Portfolio is incorporated in Mauritius, has
been issued a certificate of Mauritian tax residence by the Tax Authorities in
Mauritius, and has been granted a Tax Residency Certificate. Accordingly, the
Fund expects to be eligible for the benefits under the Treaty.
It is currently not clear whether income from entities such as the India
Portfolio will be classified as capital gains income or as 'business income'
under Indian law. However, this distinction should not affect the ultimate tax
consequences to the India Portfolio. Under the Treaty, capital gains from
investment in Indian securities, global depositary receipts, or American
depositary receipts issued with respect to Indian companies are exempt from tax,
provided that the India Portfolio does not have a permanent establishment in
India. Similarly, 'business income,' is also exempt from taxation under the
Treaty so long as the India Portfolio does not have a permanent establishment in
India. Since the India Portfolio has been deemed a tax resident of Mauritius, it
does not expect to be deemed to have a permanent establishment in India. If the
India Portfolio were deemed to have such a permanent establishment, income
attributable to that Permanent Establishment could be taxable in India at a rate
of 42.23%.
Regardless of the application of the Treaty, all transactions entered on a
recognized stock exchange in India are subject to the Securities Transaction Tax
("STT"), which is levied on the value of a transaction at rates not exceeding
0.25%. The STT can be set off against business income tax calculated under the
Indian Income Tax Act, provided that the gains on the transactions subject to
the STT are taxed as business income and not as capital gains.
It is currently not entirely clear whether the Indian Minimum Alternate Tax
("MAT") applies to the India Portfolio as a beneficiary of the Treaty. Although
the Treaty should override the provisions of the Indian Income Tax Act and thus
the application of the MAT, this is not certain. If the MAT does apply, and the
Indian income tax payable by the India Portfolio is less than 10% of its book
profits, then the India Portfolio would be deemed to owe taxes of 10% of book
profits.
Please note that the above description is based on current provisions of Indian
law, and any change or modification made by subsequent legislation, regulation,
or administrative or judicial decision could increase the Indian tax liability
of the India Portfolio and thus reduce the return to Fund shareholders.
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
79
purchasing, holding and disposing of shares of the Funds, as well as the effect
of state, local and foreign tax law and any proposed tax law changes.
Determination of NAV
The NAV of each Fund's shares is calculated each day the national securities
exchanges are open for trading as of the close of regular trading on the NYSE,
generally 4:00 p.m. New York time (the "NAV Calculation Time"). NAV per share is
calculated by dividing a Fund's net assets by the number of Fund shares
outstanding.
Stocks held by a Fund are valued at their market value when reliable market
quotations are readily available. Certain short-term debt instruments which may
be used to manage a Fund's cash are valued on the basis of amortized cost. The
values of any foreign securities held by a Fund are converted into U.S. dollars
using an exchange rate deemed appropriate by the Fund.
When reliable market quotations are not readily available, securities are priced
at their fair value, which is the price a security's owner might reasonably
expect to receive upon its sale. A Fund also will use fair-value pricing if the
value of a security it holds has been materially affected by events occurring
before the NAV Calculation Time but after the close of the primary markets or
exchanges on which the security is traded. This most commonly occurs with
foreign securities, which may trade on foreign exchanges that close many hours
before the Fund's pricing time. Intervening events might be company-specific
(e.g., earnings report, merger announcement); country-specific (e.g., natural
disaster, economic or political news, act of terrorism, interest rate change);
or global. Intervening events include price movements in U.S. markets that are
deemed to affect the value of foreign securities. Fair-value pricing also may be
used for domestic securities if, for example, (i) trading in a security is
halted and does not resume before the Fund's pricing time or if a security does
not trade in the course of a day, or (ii) the Fund holds enough of the security
that its price could affect the Fund's NAV. Since the International Funds invest
in securities listed on foreign exchanges that trade on weekends or other days
when the Funds do not price their shares, the NAV of these Funds may change on
days when shareholders will not be able to purchase or redeem the Fund's shares.
Fair-value prices are determined by the Funds according to procedures adopted by
the Board of Trustees. When fair-value pricing is employed, the prices of
securities used by a Fund to calculate its NAV may differ from quoted or
published prices for the same securities.
Transactions in Fund shares will be priced at NAV only if you purchase or redeem
shares directly from a Fund in Creation Units. Fund shares are purchased or sold
on a national securities exchange at market prices, which may be higher or lower
than NAV.
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 a Fund. Purchases
and sales of shares in the secondary market, which will not involve a 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
a Fund in Creation Units.
Dividends and Distributions
Each Fund pays out dividends, if any, to investors at least annually. Each Fund
distributes its net realized capital gains, if any, to investors annually. The
Funds 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 each Fund as a RIC or to avoid imposition of income or excise taxes on
undistributed income.
80
Financial Statements
The audited financial statements, including the financial highlights appearing
in the Trust's annual report to shareholders for the fiscal year ended March 31,
2008 and filed electronically with the SEC, are incorporated by reference and
made part of this SAI. 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.
Miscellaneous Information
Counsel. Ropes & Gray LLP, 1211 Avenue of the Americas, New York, New York 10036
is counsel to the Trust.
Independent Registered Public Accounting Firm. Ernst & Young LLP, with offices
located at 5 Times Square, New York, New York 10036, serves as the independent
registered public accounting firm to the Trust.
81
Part C: Other Information
Item 23. Exhibits
Exhibit Description
Number
(a)(1) Trust Instrument of the Registrant dated December 15, 2005 is
incorporated herein by reference to exhibit (a) of Registrant's
Initial Registration Statement on Form N-1A filed on March 13,
2006.
(a)(2) Certificate of Trust as filed with the State of Delaware on
December 15, 2005 is incorporated herein by reference to exhibit
(a)(2) of Registrant's Initial Registration Statement on Form N-1A
filed on March 13, 2006.
(a)(3) Schedule A to the Trust Instrument is incorporated herein by
reference to exhibit (a)(3) of the Registrant's Post-Effective
Amendment No. 15 filed on April 30, 2008.
(b) By-Laws of the Registrant is incorporated herein by reference to
exhibit (b)of Registrant's Initial Registration Statement on Form
N-1A filed on March 13, 2006.
(c) Portions of the Trust Instrument and By-Laws of the Registrant
defining the rights of holders of shares of the Registrant
(Reference is made 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 Registrant's Initial
Registration Statement on Form N-1A filed on March 13, 2006; and to
Articles I, V, and VI of the Registrant's By-Laws, filed as Exhibit
(b) to Registrant's Initial Registration Statement on Form N-1A
filed on March 13, 2006.)
(d)(1) Investment Advisory Agreement between the Registrant and WisdomTree
Asset Management, Inc. dated March 21, 2006 is incorporated herein
by reference to exhibit (d)(1) of Registrant's Post-Effective
Amendment No. 2 filed on September 29, 2006.
(d)(2) Investment Advisory Agreement between the Registrant (on behalf
WisdomTree India Earnings Fund) and WisdomTree Asset Management,
Inc. dated December 3, 2007 is incorporated herein by reference to
exhibit (d)(5) of Registrant's Post-Effective Amendment No. 10
filed on January 2, 2008.
(d)(3) Investment Advisory Agreement between WisdomTree Asset Management,
Inc. and WisdomTree India Investment Portfolio, Inc. dated February
14, 2008 is incorporated herein by reference to exhibit (d)(7) of
Registrant's Post-Effective Amendment No. 14 filed on April 4,
2008.
(d)(4) Investment Advisory Agreement Schedule dated June 25, 2008 is
incorporated herein by reference to exhibit (d)(2) of Registrant's
Post-Effective Amendment No. 16 filed on June 27, 2008.
(d)(5) Investment Advisory Agreement between the Registrant (on behalf of
the WisdomTree Middle East Dividend Fund) and WisdomTree Asset
Management, Inc. dated June 25, 2008 is incorporated herein by
reference to exhibit (d)(3) of Registrant's Post Effective
Amendment No. 16 filed on June 27, 2008.
(d)(6) Amended and Restated Sub-Advisory Agreement between WisdomTree
Asset Management, Inc. and BNY Investment Advisors (on behalf of
all series except the WisdomTree Currency Funds) is incorporated
herein by reference to exhibit (d)(3) of Registrant's
Post-Effective Amendment No. 10 filed on January 2, 2008.
(d)(7) Sub-Advisory Agreement Appendix A dated June 10, 2008 is
incorporated herein by reference to exhibit (d)(7) of Registrant's
Post Effective Amendment No. 16 filed on June 27, 2008.
(d)(8) Sub-Advisory Agreement among WisdomTree Asset Management, Inc. and
Mellon Capital Management Corporation and The Dreyfus Corporation
on behalf of the WisdomTree Currency Funds dated March 25, 2008
is incorporated herein by reference to exhibit (d)(6) of
Registrant's Post-Effective Amendment No. 14 filed on April 4,
2008.
(d)(10) Sub-Advisory Agreement between WisdomTree Asset Management, Inc.
and BNY Investment Advisors on behalf WisdomTree India Investment
Portfolio, Inc. dated February 19, 2008 is incorporated herein by
reference to exhibit (d)(8) of Registrant's Post-Effective
Amendment No. 14 filed on April 4, 2008.
(e)(1) Distribution Agreement between the Registrant and ALPS
Distributors, Inc. is incorporated herein by reference to exhibit
(e)(1) of Registrant's Post-Effective Amendment No. 2 filed on
September 29, 2006.
(e)(2) Distribution Agreement Schedule dated July 15, 2008 is filed
herewith.
(e)(3) Form of Authorized Participant Agreement is incorporated herein by
reference to exhibit (e)(2) of Registrant's Initial Registration
Statement on Form N-1A filed on March 13, 2006.
(f) Not applicable.
(g)(1) Custody Agreement between the Registrant and The Bank of New York
is incorporated herein by reference to exhibit (g)(1) of
Registrant's Post-Effective Amendment No. 2 filed on September 29,
2006.
(g)(2) Custody Agreement Schedule is incorporated herein by reference to
exhibit (g)(2) of Registrant's Post-Effective Amendment No. 16
filed on June 27, 2008.
(g)(3) Foreign Custody Manager Agreement between the Registrant and The
Bank of New York is incorporated herein by reference to exhibit
(g)(2) of Registrant's Post-Effective Amendment No. 2 filed on
September 29, 2006.
(g)(4) Foreign Custody Manager Agreement Schedule is incorporated herein
by reference to exhibit (g)(4) of Registrant's Post-Effective
Amendment No. 16 filed on June 27, 2008.
(g)(5) Custody Agreement between WisdomTree India Investment Portfolio,
Inc. and the Bank of New York is incorporated herein by reference
to exhibit (g)(5) of Registrant's Post-Effective Amendment No. 14
filed on April 4, 2008.
(h)(1) Administration and Accounting Agreement between the Registrant and
The Bank of New York is incorporated herein by reference to exhibit
(h)(1) of Registrant's Post-Effective Amendment No. 2 filed on
September 29, 2006.
(h)(2) Administration and Accounting Agreement Schedule is incorporated
herein by reference to exhibit (h)(2) of Registrant's
Post-Effective Amendment No. 16 filed on June 27, 2008.
(h)(3) Transfer Agency and Service Agreement between the Registrant and
The Bank of New York is incorporated herein by reference to exhibit
(h)(2) of Registrant's Post-Effective Amendment No. 2 filed on
September 29, 2006.
(h)(4) Transfer Agency and Service Agreement Schedule is incorporated
herein by reference to exhibit (h)(4) of Registrant's
Post-Effective Amendment No. 16 filed on June 27, 2008.
(h)(5) License Agreement between the Registrant and WisdomTree
Investments, Inc is incorporated herein by reference to exhibit
(h)(3) of Registrant's Post-Effective Amendment No. 2 filed on
September 29, 2006.
(h)(6) License Agreement Schedule is incorporated herein by reference to
exhibit (h)(6) of Registrant's Post-Effective Amendment No. 16
filed on June 27, 2008.
(h)(7) Securities Lending Agency Agreement between the Registrant and UBS
Securities LLC is incorporated herein by reference to exhibit
(h)(4) of Registrant's Post-Effective Amendment No. 2 filed on
September 29, 2006.
(h)(8) Form of Securities Loan Agreement between the Registrant and UBS
Securities LLC is incorporated herein by reference to exhibit
(h)(5) of Registrant's Pre-Effective Amendment No. 1 filed on June
5, 2006.
(h)(9) Chief Compliance Officer Services Agreement between the Registrant
and ALPS Funds Services, Inc. is incorporated herein by reference
to exhibit (h)(6) of Registrant's Post-Effective Amendment No. 2
filed on September 29, 2006.
(h)(10) Chief Compliance Officer Services Agreement Schedule dated July 15,
2008 is filed herewith.
(h)(11) Index Methodology (Dividend Funds) is incorporated herein by
reference to exhibit (h)(8)of Registrant's Post-Effective Amendment
No. 2 filed on September 29, 2006.
(h)(12) Index Methodology (Earnings Funds) is incorporated herein by
reference to exhibit (h)(12) of Registrant's Post-Effective
Amendment No. 4 filed on February 15, 2007.
(h)(13) Index Methodology (Growth Funds) is incorporated herein by
reference to exhibit (h)(12) of Registrant's Post Effective
Amendment No. 16 filed on June 27, 2008.
(h)(14) Amended and Restated Services Agreement between the Registrant and
WisdomTree Asset Management, Inc. dated September 17, 2007 is filed
herewith.
(h)(15) Index Methodology (Currency Hedged Funds).*
(i) Legal Opinion and Consent of Ropes & Gray LLP, counsel to the
Registrant is filed herewith.
(j) Consent of Independent Registered Public Accounting Firm is filed
herewith.
(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) of Registrant's Pre-Effective Amendment No. 2 filed on
June 9, 2006.
(m) None.
(n) Not applicable.
(p)(1) Code of Ethics of the Registrant is incorporated herein by
reference to exhibit (p) of Registrant's Post Effective Amendment
No. 2 filed on September 29, 2006.
(p)(2) Code of Ethics of BNY Mellon is incorporated herein by reference to
exhibit (p)(2) of Registrant's Post Effective Amendment No. 14
filed on April 4, 2008.
(q)(1) Power of Attorney for Gregory Barton, Toni Massaro, Jonathan
Steinberg and Victor Ugolyn is incorporated herein by reference to
exhibit (q) of Registrant's Post Effective Amendment No. 7 filed on
October 19, 2007.
(q)(2) Power of Attorney for Amit Muni is incorporated herein by reference
to exhibit (q)(2) of Registrant's Post Effective Amendment No. 16
filed on June 27, 2008.
* To be filed by Amendment.
Item 24. Persons Controlled by or under Common Control with Registrant
Not applicable.
Item 25. Indemnification
Reference is made to Article IX of the Registrant's Trust Instrument included as
Exhibit (a)(1) 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 attorneys 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 26. Business and Other Connections of the Investment Adviser
WisdomTree Asset Management, Inc. ("WTAM"), 380 Madison Avenue, 21st Floor, New
York, NY 10017, a wholly-owned subsidiary of WisdomTree Investments, Inc., is a
registered investment adviser and serves as manager for all funds of the
Registrant. 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 will also have substantial
responsibilities as directors and/or officers of WisdomTree Investments, Inc.,
380 Madison Avenue, 21st Floor, New York, NY 10017. To the knowledge of the
Registrant, except as set forth below, 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 WisdomTree Asset Principal Business(es) During
Management, Inc. the Last Two Fiscal Years
Jonathan Steinberg President, (Principal Executive Chief Executive Officer of
Officer) and Trustee WisdomTree Investments
(formerly, Index Development
Partners, Inc.); Director of
WisdomTree Investments, Inc.;
President of the WisdomTree
Funds since 2005
Amit Muni Treasurer (Principal Financial and Chief Financial Officer and
Accounting Officer), Assistant Assistant Secretary of WisdomTree
Secretary Investments, Inc. (formerly Index
Development Partners, Inc.) since
March 2008; International Securities
Exchange Holdings, Inc. (ISE),
Controller and Chief Accounting
Officer, 2003 to 2008; Instinet
Group, Inc., Vice President
Finance, 2000 to 2003.
Richard Morris Deputy General Counsel, Chief Legal Secretary and Chief Legal Officer
Officer of the WisdomTree Funds since 2005;
Deputy General Counsel of WisdomTree
Investments, Inc. since 2005; Senior
Counsel at Barclays Global Investors,
N.A. from 2002 to 2005; Counsel at
Barclays Global Investors, N.A. from
2000 to 2001.
WTAM, with the approval of the Registrant's board of trustees, selects the
sub-adviser for the funds of the Registrant. Mellon Capital Management
Corporation serves as sub-adviser for the funds.
Name Position with Sub Advisors Principal Business(es) During
the last Two Fiscal Years
Kurt Zyla Managing Director, Indexing Division Manager
and ETF Strategist
Todd Rose Vice President, Senior Portfolio Portfolio Management, Index Fund Management
Manager
Denise Krisko Managing Director, Equity Index Head of Index Management
Strategies, East Coast
Item 27. Principal Underwriters
(a) The Trust's distributor, ALPS Distributors, Inc. (the "Distributor"), acts
as distributor for the Registrant and the following investment companies:
Accessor Funds, AARP Funds, Agile Funds, Ameristock Mutual Funds, Inc., DIAMONDS
Trust, Drake Funds, Financial Investors Trust, Financial Investors Variable
Insurance Trust, First Funds, Firsthand Funds, Forward Emerald Funds, Henssler
Funds, Inc., Holland Balanced Fund, Laudus Trust, Milestone, Nasdaq 100 Trust,
PowerShares Exchange-Traded Funds Trust, SPDR Trust, MidCap SPDR Trust, Select
Sector SPDR Trust, Stonebridge Funds, Inc., Utopia Funds, W. P. Stewart Funds,
Wasatch Funds, and Westcore Trust.
(b) To the best of Registrant's knowledge, the directors and executive officers
of the Distributor are as follows:
Name Position(s) and Office(s) with the Distributor
Edmund J. Burke President
Thomas Carter Managing Director - Sales and Finance; Treasurer
Jeremy O. May Managing Director - Operations and Client Service;
Secretary
Diana Adams Vice President, Controller
Tane Tyler Chief Legal Officer, Assistant Secretary
Brad Swenson Chief Compliance Officer
The business address of each of the Distributor's directors or officers is 1290
Broadway, Suite 1100, Denver, Colorado 80203.
(c) Not applicable.
Item 28. 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 380 Madison Avenue, 21st Floor, New
York, NY 10017.
(b) WisdomTree Asset Management Inc. maintains all Records relating to its
services as investment adviser to the Registrant at 380 Madison Avenue, 21st
Floor, New York, NY 10017.
(c) The sub-Advisor maintains all Records relating to its services as
sub-adviser to the Registrant at One Mellon Center, Pittsburgh, PA, 15258 and
480 Washington Boulevard, Jersey City, New Jersey 07310
(d) ALPS Distributors, Inc. maintains all Records relating to its services as
Distributor of the Registrant at 1290 Broadway, Suite 1100, Denver, Colorado
80203.
(e) The Bank of New York maintains all Records relating to its services as
administrator, transfer agent and custodian of the Registrant at One Wall
Street, New York, New York 10286
Item 29. Management Services
Not applicable.
Item 30. Undertakings
The Registrant undertakes to file an amendment to this registration statement
with certified financial statements showing the initial capital received before
accepting subscriptions from more than 25 persons.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant has duly caused this Registration Statement
to be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of New York, State of New York, on the 29th day July, 2008.
WISDOMTREE TRUST
(Registrant)
By: /s/ Jonathan Steinberg
Jonathan Steinberg
President (Principal Executive Officer)
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities and
on the dates indicated.
Signatures Title(s) Date
---------- -------- ----
/s/ Jonathan Steinberg President (Principal Executive July 29, 2008
---------------------- Officer) and Trustee
Jonathan Steinberg
/s/ Amit Muni* Treasurer (Principal Financial July 29, 2008
-------------- and Accounting Officer) and
Amit Muni Assistant Secretary
/s/ Gregory Barton* Trustee July 29, 2008
-------------------
Gregory Barton
/s/ Toni Massaro* Trustee July 29, 2008
-----------------
Toni Massaro
/s/ Victor Ugolyn* Trustee July 29, 2008
------------------
Victor Ugolyn
*By: /s/ Jonathan Steinberg
Jonathan Steinberg
(Attorney-in-Fact)
EXHIBIT INDEX
Exhibit Description
------- -----------
(e)(2) Distribution Agreement Schedule.
(h)(10) Chief Compliance Officer Services Agreement Schedule.
(h)(14) Amended and Restated Services Agreement between the Registrant and
WisdomTree Asset Management, Inc.
(i) Legal Opinion and Consent of Ropes & Gray LLP, counsel to the
Registrant.
(j) Consent of Independent Registered Public Accounting Firm to the
Registrant.