WisdomTree Barclays Yield Enhanced U.S. Aggregate Bond AGGY is a decent core bond holding. It reaches for yield by segmenting the taxable investment-grade U.S.-dollar-denominated bond market and tilting towards the highest-yielding components. While the strategy is tethered to the Bloomberg Barclays U.S. Aggregate Bond Index, the amount of leash it does have is just enough for it to go astray under certain circumstances. We witnessed this in 2020, as it was late to dial down its credit risk as credit spreads widened and slow to ratchet it back up as they tightened. This episode revealed a timing element that is present in its index construction that hadn't been as evident in the past. We have downgraded its Process rating to Average from Above Average. And as a result, we are downgrading its overall Morningstar Analyst Rating to Neutral from Silver.
Will AGGY outperform in future?
Get our overall rating based on a fundamental assessment of the pillars below.
The Process Pillar is our assessment of how sensible, clearly defined, and repeatable AGGY’s performance objective and investment process is for both security selection and portfolio construction.
The People Pillar is our evaluation of the AGGY management team’s experience and ability. We find that high-quality management teams deliver superior performance relative to their benchmarks and/or peers.
The Parent Pillar is our rating of AGGY’s parent organization’s priorities and whether they’re in line with investors’ interests.