WISDOMTREE EFFICIENT TIPS PLUS GOLD FUND GDT Stock Analysis

About WISDOMTREE EFFICIENT TIPS PLUS GOLD FUND

The Fund is actively managed using a model-based approach. The Fundseeks to achieve its investment objective by investing, either directly or through a wholly-owned subsidiary, in a portfolio composedof (i) inflation-protected U.S. Treasury Bonds (“TIPS”), other debt securities issued by the U.S. Treasury, including bills,notes, bonds, and floating rate public obligations of the U.S. Treasury (“Floating Rate Notes”), and derivatives that provideexposure to such investments, such as inflation swaps, and (ii) U.S.-listed gold futures contracts. The Fund uses U.S.-listed gold futurescontracts and other derivatives, such as swaps, to enhance the capital efficiency of the Fund. Capital efficiency is the ability for aninvestment to gain exposure to a particular market while using fewer assets. Under normal circumstances, the Fund invests at least 80%of its net assets, plus any borrowings for investment purposes, in a combination of U.S.-listed gold futures contracts and U.S. Treasurysecurities, as well as other investments that, combined, have economic characteristics that are substantially similar to those of goldand TIPS or other debt securities issued by the U.S. Treasury. The Fund invests in inflation-protected public obligations of the U.S.Treasury, commonly known as “TIPS” with a focus on bonds maturing in less than five years. TIPS are designed to provide inflationprotection to investors. TIPS are income-generating securities whose interest and principal payments are adjusted for inflation, whichis defined as a sustained increase in prices that erodes the purchasing power of money. The inflation adjustment, which is typically appliedto the principal of the bond, follows a designated inflation index, the Consumer Price Index (“CPI”), and is applied to theTIPS’ principal payments according to changes in CPI. A fixed coupon rate is applied to the inflation-adjusted principal so that,as inflation rises, both the principal value and the interest payments increase. This inflation adjustment feature seeks to provide investorswith a hedge against inflation while preserving the purchasing power of their investment. Because of this inflation adjustment feature,inflation-protected bonds typically have lower yields than conventional fixed-rate bonds. The Fund will invest in long-only gold futures contracts. Contract selection is based on impliedcarry, which is the potential return (or loss) that an investor would earn by holding the reference asset (i.e., gold) until thefutures contract expires. The Fund will not invest directly in physical commodities. The Fund seeks to have approximately equal exposure to TIPS and gold.The Fund’s portfolio will be rebalanced quarterly to implement the results of the model. As a result, between quarterly rebalances,the Fund’s allocations to TIPS and gold may vary from the targeted approximately equal exposure. To the extent the Fund’sexposure deviates from the targeted allocation by greater than 10%, the Adviser may determine to rebalance the Fund’s portfoliointra-quarter to more closely align its holdings with the targeted approximately equal exposure. To maintain exposure to a futures contract, the Fund must sell the positionin the expiring contract and buy a new position in a contract with a later delivery month, which is referred to as “rolling.”The Fund expects to employ an “enhanced roll” process by attempting to roll from an expiring futures contract to another futurescontract in seeking to generate a greater yield for the Fund. This roll process, generally implemented monthly, aims to maximize the potentialroll benefits in backwardated markets and minimize potential losses in contango markets by rolling, as applicable, to the futures contracton a particular commodity which generates the maximum implied yield. Futures contracts trade either in contango, where forward month futurescontracts cost more than the current month (leading to negative roll yield) or in backwardation, where forward month…