#How is WisdomTree Innovating Money Market Trading?
WisdomTree, a prominent asset management firm in New York, is on the verge of introducing innovative features to its money market fund. The WisdomTree Treasury Money Market Digital Fund will soon offer continuous trading and instant settlement options.
This new trading capability allows the fund to engage in transactions around the clock against the USDC stablecoin. The dealer-principal model utilized by WisdomTree's broker-dealer subsidiary ensures efficient trade execution. Recently, the SEC provided exemptive relief to various WisdomTree entities, while FINRA endorsed the broker-dealer unit to execute trades as principal. This marks a pivotal moment in the structuring of funds under the Investment Company Act of 1940, making it one of the most significant advancements since the inception of exchange-traded funds.
The implementation of instant settlement showcases the potential of blockchain technology and real-world asset tokenization. Contrary to traditional mutual funds, which typically settle the next day, this new setup permits investors to allocate their capital into yield-generating assets without delay, enhancing potential returns on cash that would otherwise remain idle.
The trading mechanism operates bilaterally, with the broker-dealer utilizing its inventory instead of relying on an exchange. This preserves the existing primary-market functionality of the fund, with prospects for future participation from unaffiliated dealers.
Additionally, the fund introduces continuous dividend accrual. It leverages blockchain timestamps to distribute daily income based on the holding period associated with each wallet, even when shares shift between accounts within a single day.
WTGXX maintains a target net asset value of one dollar by investing in short-term Treasury and government securities. As of February 23, the fund had amassed $730 million in total assets and has an expense ratio of 0.25%. Institutional clients will have early access to these features via WisdomTree Connect, while retail investors can look forward to availability through the firm’s Prime app, which allows investments starting at just one dollar.