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Investing “for the Long Run” with the Siegel-WisdomTree Model Portfolios
Key Takeaways
- The Siegel-WisdomTree Model Portfolios represent a groundbreaking collaboration between WisdomTree and industry legend Professor Jeremy Siegel. Launched in 2019, these open-architecture, ETF Model Portfolios offer a fresh approach for advisors seeking to balance current income needs with longevity risk management.
- The Siegel-WisdomTree Model Portfolios are designed for medium- and long-term investors, and the Model Portfolios come in three risk profiles: Siegel-WisdomTree Global Equity Model: 100% equity; Siegel-WisdomTree Longevity Model: 75% equity, 25% fixed income; Siegel-WisdomTree Moderate Model: 60% equity, 40% fixed income.
- The portfolios apply the core investment principles from Professor Siegel’s research while also reflecting the ongoing views of WisdomTree’s Model Portfolio Investment Committee.
This article is relevant to financial professionals who are considering offering model portfolios to their clients. If you are an individual investor interested in WisdomTree ETF Model Portfolios, please inquire with your financial professional. Not all financial professionals have access to these Model Portfolios.
As the adoption of model portfolios continues to expand, we are seeing a growing number of advisors leveraging third-party portfolios backed by the capabilities of professional asset managers.
At WisdomTree, we believe our Model Portfolio collaboration with industry legend Professor Jeremy Siegel is truly the first of its kind.
Launched in 2019, this suite of open-architecture ETF Model Portfolios provides an innovative solution to advisors seeking to balance their clients’ current income needs while managing longevity risk.
Introducing the Siegel-WisdomTree Model Portfolios
The Siegel-WisdomTree Model Portfolios offer three risk profiles tailored to meet the needs of medium- and long-term investors:
All three Model Portfolios were designed to offer an efficient, low-cost way to apply the core investment principles from Professor Jeremy Siegel’s research, including:
Longer life expectancy requires individuals to rethink their retirement planning and asset allocation.
While the short-term standard deviation of equities is higher than that of bonds, this may not be the most appropriate definition of risk for most investors. Rather, we believe the risk that investors do not reach their retirement goals—shortfall risk—should be weighed more heavily in investors’ minds than the day-to-day fluctuations of the stock market.
With longer life expectancies extending individual investor’s investment horizons, we believe a greater equity bias (structurally allocating more to equities than to fixed income) is warranted in many client portfolios.
Additionally, when viewed through the lens of maintaining purchasing power, equities can help reduce risk, as stocks have historically been an excellent long-term hedge against inflation.
As Professor Siegel’s research below highlights, value and dividend-paying stocks have historically enhanced portfolio returns while experiencing less volatility than growth stocks.
Therefore, the equity allocations of the Model Portfolios tilt toward factors such as dividend yield and low price-to-earnings (P/E) ratios to seek higher income generation and outperformance potential.
A fully diversified, global equity portfolio offers potential for long-term return and risk diversification benefits.1
The models provide diversified exposure to U.S. and international stocks. Although U.S. stocks have outperformed over the past decade2, this has not always been the case. Moreover, we believe lower equity valuations found outside of the U.S. could potentially result in attractive returns over the long-term.
Leveraging Professor Siegel’s Insights and WisdomTree’s Professional Investment Platform for Your Clients
In today’s rapidly changing market environment, we see a growing number of advisors leaning into model portfolios and leveraging the professional investment capabilities of WisdomTree and our Senior Economist, Professor Jeremy Siegel.
The Siegel-WisdomTree Model Portfolios, available for advisors across several third-party model platforms, are built to deliver for your clients over the long term so that you can focus on building and managing your relationships.
Beyond model portfolio management, advisors also gain access to Professor Siegel’s market views and positioning via weekly market commentary, webcasts and other materials designed to help you effectively communicate with your clients.
1 Diversification does not guarantee a profit or eliminate the risk of a loss.
2 In the ten-year period ending March 31, 2024, the S&P 500 Index delivered an annualized total return of 12.96% compared to a 4.24% annualized total return on the MSCI ACWI Ex-US Index. Source: Bloomberg; As of March 31, 2024. Past performance is not indicative of future returns. You cannot invest directly in an index.
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Important Risks Related to this Article
Model rebalancing and trading will be provided by Adhesion Wealth, a provider of outsourced investment management solutions, giving their advisor clients direct access to a platform that will deliver a more customizable approach with advisor input. WisdomTree’s Portfolio and Growth Solutions enable advisors to prioritize customizable brand practices and fact sheets, investment design of models, and efficiencies across implementation, trading and tax transitions, which can serve as a springboard toward their growth.
For financial advisors: WisdomTree Model Portfolio information is designed to be used by financial advisors solely as an educational resource, along with other potential resources advisors may consider, in providing services to their end clients. WisdomTree’s Model Portfolios and related content are for information only and are not intended to provide, and should not be relied on for, tax, legal, accounting, investment or financial planning advice by WisdomTree, nor should any WisdomTree Model Portfolio information be considered or relied upon as investment advice or as a recommendation from WisdomTree, including regarding the use or suitability of any WisdomTree Model Portfolio, any particular security or any particular strategy.
For retail investors: WisdomTree’s Model Portfolios are not intended to constitute investment advice or investment recommendations from WisdomTree. Your investment advisor may or may not implement WisdomTree’s Model Portfolios in your account. The performance of your account may differ from the performance shown for a variety of reasons, including but not limited to: your investment advisor, and not WisdomTree, is responsible for implementing trades in the accounts; differences in market conditions; client-imposed investment restrictions; the timing of client investments and withdrawals; fees payable; and/or other factors. WisdomTree is not responsible for determining the suitability or appropriateness of a strategy based on WisdomTree’s Model Portfolios. WisdomTree does not have investment discretion and does not place trade orders for your account. This material has been created by WisdomTree, and the information included herein has not been verified by your investment advisor and may differ from information provided by your investment advisor. WisdomTree does not undertake to provide impartial investment advice or give advice in a fiduciary capacity. Further, WisdomTree receives revenue in the form of advisory fees for our exchange-traded Funds and management fees for our collective investment trusts.
Jeremy Siegel serves as Senior Economist to WisdomTree, Inc., and its subsidiary, WisdomTree Asset Management, Inc. (“WTAM” or “WisdomTree”). He serves on the Model Portfolio Investment Committee for the Siegel WisdomTree Model Portfolios of WisdomTree, which develops and rebalances WisdomTree's Model Portfolios. In serving as an advisor to WisdomTree in such roles, Mr. Siegel is not attempting to meet the objectives of any person, does not express opinions as to the investment merits of any particular securities and is not undertaking to provide and does not provide any individualized or personalized advice attuned or tailored to the concerns of any person.
