Supplement Dated July 1, 2008
to the
Prospectus Dated July 27, 2007 for the
WisdomTree Domestic Dividend Funds and International Dividend Funds
The following information supplements the information in the current Prospectus.
WisdomTree Middle East Dividend Fund
Exchange Trading Symbol GULF Cusip Number 97717X305
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 May 30, 2008, approximately 40% of the Index consisted
of companies with market capitalizations over $10 billion and 45% of the Index
consisted of companies with a market capitalization between $2 billion and $10
billion.
Primary Investment Risks
The following risks, in addition to the risks described in the Prospectus under
the heading "Principal Risk Factors Common to All Funds", are risks that can
significantly affect the Fund's performance and the value of your investment.
o Foreign Securities Risk. The Fund invests in foreign securities. Foreign
securities can involve additional risks relating to political, economic, or
regulatory conditions in foreign countries. These risks include
fluctuations in foreign currencies; withholding or other taxes; trading,
settlement, custodial, and other operational risks; and the less stringent
investor protection and disclosure standards of some foreign markets. 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.
o Geographic Risk (Middle East). The Fund invests 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 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 this 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 Risks. 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 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 Financial Sector Investing. The Fund generally invests a relatively large
portion of its assets in the financial sector. The financial sector in the
Middle East can be significantly affected by, among other things, commodity
prices, government intervention and regulation, interest rates, stock
market activity, mergers and acquisition activity, and losses on loans.
o Telecommunication Investing. The Fund generally invests a relatively large
portion 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 Investments in Depositary Receipts and Participation Certificates. The Fund
may invest in Depositary Receipts and Participation Certificates as a
substitute for investing directly in securities included in the Index.
Depositary Receipts are receipts typically issued by a bank or trust
company which evidence ownership by the bank or trust company of securities
issued by a foreign corporation. Participation Certificates are 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 Depositary Receipts and
Participation Certificates can increase tracking error relative to the
Index.
o Small and Mid-Capitalization Investing. The Fund invests a portion of its
assets in securities of small- and mid-capitalization companies. The
securities of small- and mid-capitalization companies may be subject to
more unpredictable price changes than securities of larger companies or the
market as a whole.
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 will generally
cause the Fund to recognize a capital gain that it might not have incurred
if it had made a redemption in-kind.
Performance Information
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) 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 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 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:
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
Creation and Redemption Transaction Fees for Creation Units (Institutional
Investors Only)
The 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 following table also shows, as of
June 15, 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 Value Standard Maximum
Of A Creation Unit Fee Fee
------------------ -------- --------
$2,500,000 $6,500 $26,000
The Fund reserves the right to impose restrictions on disruptive, excessive, or
short-term trading, and may reject purchase orders or redemption orders in such
cases.
Financial Highlights. Financial Statements and Annual Reports will be available
after the Fund has completed a fiscal year of operations.