INTRODUCING THE WISDOMTREE WESTERN ASSET UNCONSTRAINED BOND FUND The First Truly Unconstrained Fixed Income ETF

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1 WisdomTree Western Asset ETFs UNCONSTRAINED BOND FUND UBND For decades, declining interest rates have provided a tailwind for traditional fixed income strategies. Today, with yields near historic lows and interest rate sensitivity near all-time highs, positive total returns of core fixed income benchmarks 1 have become increasingly dependent on steady or lower rates. As a result, the risk/return trade-off in these approaches seems misaligned with the objectives of many investors. In response, we believe investors may need to take a more flexible approach than traditional indexes allow. One potential solution may be to liberate the portfolio manager from the constraints of an index. So-called unconstrained fixed income strategies focus on generating total returns regardless of movements in interest rates. In our view, this approach could be a particularly powerful tool to help investors navigate uncertain markets. By providing this strategy in an exchange-traded fund (ETF), WisdomTree sought to tap the expertise of Western Asset Management Company (Western Asset), an investment manager with more than 11 years of unconstrained investing experience. INTRODUCING THE WISDOMTREE WESTERN ASSET UNCONSTRAINED BOND FUND The First Truly Unconstrained Fixed Income ETF The WisdomTree Western Asset Unconstrained Bond Fund (UBND) brings an unconstrained approach to fixed income and a leading institutional fixed income manager in an ETF. UBND seeks to provide a high level of total return and a lower level of risk through investments in fixed income assets around the world: + Investment Flexibility: The Fund is not managed to a benchmark and is able to deploy capital across all fixed income strategies and sectors based on experience and valuations. + Bond-Like Volatility: The Fund targets % to 5.00% annualized volatility 3. + Emphasis on Value: The Fund permits a world-class investment manager to incorporate the best ideas for total returns into a single portfolio. + Disciplined Risk Management: Active management 4 is focused on risk-adjusted returns supported by robust risk management infrastructure. Morningstar Fixed Income Fund Manager of the Year Mark Lindbloom, the lead portfolio manager for the WisdomTree Western Asset Unconstrained Bond Fund, was named Morningstar s Fixed Income Fund Manager of the Year for 2014, along with Western Asset CIO Ken Leech and portfolio manager Carl Eichstaedt. 1 Proxied by the Barclays U.S. Aggregate Index. 2 Target volatility provided by the Fund s sub-adviser, Western Asset Management Company. 3 Volatility: A measure of the dispersion of actual returns around a particular average level. 4 Active: Funds that attempt to outperform the market by selecting securities a portfolio manager believes to be the best.

2 WHAT IS UNCONSTRAINED FIXED INCOME INVESTING? As unconstrained investing has grown in popularity in recent years, many strategies and approaches have emerged under this banner term, sometimes making it difficult to codify. Simply put, an unconstrained fixed income strategy allows an investment manager increased flexibility to generate total returns and manage risk compared to the constraints imposed by an index-based approach. Despite its name, unconstrained strategies are not undisciplined our view is that a focus on risk is essential to management of these strategies. The specific level of risk that the manager targets is a primary differentiating factor among unconstrained strategies some target bond-like volatility, while others are more opportunistic and target much higher levels of risk. Western Asset s approach focuses on the less risky end of this spectrum by targeting a bond-like volatility of 3% to 5% per year. As a result, this approach can be used as a complement to or a substitute for a traditional core fixed income portfolio. As we outline below, an unconstrained approach to fixed income may help investors navigate today s particularly difficult market environment. TRADITIONAL FIXED INCOME BENCHMARKS: LESS YIELD, MORE INTEREST RATE RISK 5 On a risk-adjusted basis, the Barclays U.S. Aggregate Index (Barclays Agg) (see last page for definition) has been one of the best performing strategies over the last 10 years as interest rates fell to record lows. Unfortunately, the fall in rates has driven durations longer, increasing interest rate risk sensitivity over time. Today, the balance between yield and interest rate risk leaves many bond investors vulnerable. As the Federal Reserve (Fed) looks to lift rates for the first time in nearly a decade, we believe that interest rate risk is likely to serve as a headwind rather than a tailwind going forward. In this environment, investors should ask themselves if the Agg s current composition is reflective of their investment goals. Put simply, an index is merely a reflection of issuance, not value. As government and securitized debt issuance has risen in the United States, will these subsets of the market offer compelling opportunities for income given the current interest rate environment? 5 Interest rate risk: The risk that an investment s value will decline due to an increase in interest rates.

3 FIGURE 1: BARCLAYS U.S. AGGREGATE INDEX: YIELD VS. DURATION Yield to Worst (%) Yield to Worst Effective Duration Effective Duration (Years) /30/90 6/30/91 6/30/92 6/30/93 6/30/94 6/30/95 6/30/96 6/30/97 6/30/98 6/30/99 6/30/00 6/30/01 6/30/02 6/30/03 Source: Barclays, as of 6/30/15. Effective duration: Provides a measure of sensitivity of the Fund s price to changes in interest rates and is calculated as the weighted average of the individual bond effective durations. Yield to worst: The rate of return generated assuming a bond is redeemed by the issuer on the least desirable date for the investor. Past performance is not indicative of future results. You cannot invest directly in an index. 6/30/04 6/30/05 6/30/06 6/30/07 6/30/08 6/30/09 6/30/10 6/30/11 6/30/12 6/30/13 6/30/14 6/30/15 The WisdomTree Western Asset Unconstrained Bond Fund has the flexibility to manage the interest risk profile and assess value across the full spectrum of fixed income assets. Western Asset s approach to unconstrained fixed income strategies allows greater flexibility to potentially find value across the yield curve 6, sector and credit quality 7 spectrum to balance portfolio risk versus reward. EXPANDING OPPORTUNITIES FOR RETURN: BOND INVESTING BEYOND THE BARCLAYS AGG U.S. Treasury rates drive a significant portion of returns within traditional U.S. core fixed income benchmarks. While at one time these benchmarks incorporated a large portion of the world s investable debt, that is no longer the case. In fact, the Barclays Agg accounts for only about 36% of the investible fixed income universe. 8 Today s global opportunity set for fixed income investors is much broader and provides a diversity of risk exposures and opportunities not captured in the Barclays Agg. This leaves a tremendous amount of potential opportunities untapped, particularly when the outlook for U.S. rates remains so uncertain. 6 Yield curve: Graphic depiction of interest rates on government bonds, with the current yield on the vertical axis and the years to maturity on the horizontal axis. 7 Credit quality: An assessment of a borrower s potential risk of default. 8 Source: Barclays, as of 6/30/15.

4 FIGURE 2: GLOBAL OPPORTUNITY SET MUCH GREATER THAN THE BARCLAYS U.S. AGG 18,000 16,000 14,000 36% 64% 16,418 12,000 USD (billions) 10,000 8,000 6,000 Barclays U.S. Aggregate 7,366 5,373 5,504 Other U.S. 5,988 Non-U.S. 4,000 2, , ,075 1,503 1,211 1, U.S. Government U.S. IG Credit U.S. Securitized U.S. TIPS Other IG Corporates Hybrid & Floating Rate Securitized HY Corporates/Bank Loans USD Emerging Markets Global Corporate ex-usd Global Securitized ex-usd Global Inflation-linked ex-usd Global HY Corporate ex-usd Euro Emerging Markets Global Government ex-usd Source: Barclays, as of 6/30/15. Investable universe values proxied by the subcomponents of the Barclays Multiverse Index. You cannot invest directly in an index. Subject to change. The WisdomTree Western Asset Unconstrained Bond Fund has the flexibility to invest in fixed income opportunities around the world and across sectors. RISING UNCERTAINTY, RISING RATES In today s markets, managers may need to adjust portfolio exposures to changing economic conditions. When interest rates rise, not all sectors of the bond market will necessarily be impacted the same. Additionally, rates may not rise uniformly across the yield curve, and certain sectors could actually benefit from a rise in rates. However, most investors don t have the resources required to efficiently manage the many flavors of fixed income in a single portfolio. As a result, these approaches may expose investors to risk.

5 FIGURE 3: UBND: TARGET ALLOCATION RANGES BY FIXED INCOME SECTOR 70% 60% 50% Market Value (%) 40% 30% 20% 10% 0% -10% -20% Treasury Agency Inflation- Linked MBS ABS IG Credit High-Yield 1 Non-US Emerging Markets Source: Western Asset. All percentages are relative to market value. Data may not sum to 100% due to rounding. ¹Includes bank loans. MBS: mortgage-backed securities. ABS: asset-backed securities. IG Credit: investment-grade credit. Allocation and duration positioning will fluctuate with market conditions and tactics. While differences could occur when the strategy is implemented with the ETF structure, we feel strongly that in terms of relative positioning and sector exposures the illustration remains reasonably accurate. Holdings subject to change. WHY WESTERN ASSET? The WisdomTree Western Asset Unconstrained Bond Fund was created with the belief that a manager with the necessary expertise and depth of resources can assist investors in successfully navigating the swiftly changing landscape. With $453 billion in assets under management 9, Western Asset offers the global breadth and local depth to not only uncover opportunities across the world, but to incorporate them within a portfolio guided by strict risk discipline. That s why WisdomTree chose to partner with Western Asset, a pioneer in unconstrained investing. UNCONSTRAINED, NOT UNDISCIPLINED As a fixed income-only manager, Western Asset integrates fundamental credit research with relative value analysis to manage exposures across every subset of the fixed income markets. The process begins with top-down assessments of the global economy and country- and sector-specific risks, but is driven by bottom-up company and industry analysis. The Western Asset management team: + Focuses on identifying the sectors and companies that offer relative value for the risks they entail + Uses disciplined credit research and a global footprint to identify opportunities and to potentially avoid pitfalls wherever they occur + Adheres to a strict sell discipline once targets are reached or when the risks no longer justify holding a security As a result, UBND contains Western Asset s best ideas for total return with an emphasis on risk management. 9 Source: Western Asset, as of 6/30/15.

6 ACTIVE FIXED INCOME IN AN ETF ETF Advantages Access to a leading global fixed income investment manager Access to an evolving market No investment minimums No redemption fees Low fees of only 0.55% 10 Active Management Advantages Opportunity to capitalize on a rapidly evolving global fixed income market Potential ability to exploit certain market inefficiencies Flexibility to potentially avoid pitfalls in benchmark-focused strategies Intraday liquidity 11 Full transparency of holdings on a daily basis WisdomTree WisdomTree sponsors distinct ETFs that span asset classes and countries around the world. 12 WisdomTree pioneered the concept of fundamentally weighted ETFs and active ETFs and is an industry leader in both categories. Western Asset Management Company Western Asset Management has more than 30 years of experience in managing fixed income and oversees more than $453 billion globally. 13 Western Asset s core strength is in corporate credit research and risk management. WisdomTree Western Asset Unconstrained Bond Fund Quick Facts Ticker: UBND Exchange: NASDAQ Expense Ratio: 0.60%, contractually waived to 0.55% through December 31, Structure: Open-end ETF. Objective: The Fund seeks a high level of total return consisting of both income and capital appreciation. Primary Exposure: Flexible approach to fixed income; targeting annual volatility of 3% to 5%. Key Attributes 14 Credit quality: >50% investment-grade securities. Effective duration: -3 to 8 years. Currency: <50% in non-dollar-denominated securities; <25% unhedged. Regions: <25% emerging markets. Concentration: Exposure to a single corporate issuer capped at 10%. At WisdomTree, we do things differently. We build our ETFs with proprietary methodologies, smart structures and uncommon access to provide investors with the potential for income, performance, diversification and more. 10 Gross expense ratio of 0.60% contractually waived to 0.55% through 12/31/16. Ordinary brokerage commissions may apply. 11 Liquidity: The degree to which an asset or security can be bought or sold in the market without affecting the asset s price. 12 Source: WisdomTree, as of 6/30/ Source: Western Asset, as of 6/30/ Investment guidelines targeted by sub-adviser. Please view the Fund s prospectus for statutory limits.

7 This Fund is new and has limited operating history. Investors should carefully consider the investment objectives, risks, charges and expenses of the Fund before investing. To obtain a prospectus containing this and other important information, please call WISE (9473) or visit wisdomtree. com. Investors should read the prospectus carefully before investing. There are risks associated with investing, including possible loss of principal. Unlike typical exchange-traded funds, there is no index that the Fund attempts to track or replicate. Thus, the ability of the Fund to achieve its objective will depend on the effectiveness of the portfolio manager. Fixed income investments are subject to interest rate risk; their value will normally decline as interest rates rise. In addition, when interest rates fall, income may decline. Fixed income investments are also subject to credit risk, the risk that the issuer of a bond will fail to pay interest and principal in a timely manner or that negative perceptions of the issuer s ability to make such payments will cause the price of that bond to decline. High-yield or junk bonds have lower credit ratings and involve a greater risk to principal. Foreign investing involves special risks, such as risk of loss from currency fluctuation or political or economic uncertainty. Investments in emerging, offshore or frontier markets are generally less liquid and less efficient than investments in developed markets and are subject to additional risks, such as risks of adverse governmental regulation and intervention or political developments. Derivative investments can be volatile, and these investments may be less liquid than other securities, and more sensitive to the effects of varied economic conditions. The Fund may engage in short sale transactions where losses may be exaggerated, potentially losing more money than the actual cost of the investment, and the third party to the short sale may fail to honor its contract terms, causing a loss to the Fund. Please read the Fund s prospectus for specific details regarding the Fund s risk profile. Barclays U.S. Aggregate Index: Represents securities that are SEC-registered, taxable and dollar denominated. The Index covers the U.S. investment-grade, fixedrate bond market, with Index components for government and corporate securities, mortgage pass-through securities and asset-backed securities. These major sectors are subdivided into more specific indexes that are calculated and reported on a regular basis. Barclays Multiverse Index: Provides a broad-based measure of the global fixed income market. The Index represents the union of the Barclays Global Aggregate Index and the Barclays Global High-Yield Index and captures investment-grade and high-yield securities in all eligible currencies. WisdomTree Funds are distributed by Foreside Fund Services, LLC. Foreside Fund Services, LLC is not affiliated with Western Asset Management Company. WTGM-0355