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Is WisdomTree Europe Hedged Equity ETF (HEDJ) a Strong ETF Right Now?
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Making its debut on 01/04/2010, smart beta exchange traded fund WisdomTree Europe Hedged Equity ETF (HEDJ - Free Report) provides investors broad exposure to the European Equity ETFs category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
Because the fund has amassed over $1.71 billion, this makes it one of the largest ETFs in the European Equity ETFs. HEDJ is managed by Wisdomtree. This particular fund seeks to match the performance of the WisdomTree Europe Hedged Equity Index before fees and expenses.
The WisdomTree Europe Hedged Equity Index is designed to provide exposure to European equities while at the same time neutralizing exposure to fluctuations between the Euro and the U.S. dollar.
Cost & Other Expenses
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
Operating expenses on an annual basis are 0.58% for HEDJ, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 2.38%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
Looking at individual holdings, Linde Plc (LIN - Free Report) accounts for about 5.17% of total assets, followed by Asml Holding Nv (ASML - Free Report) and Sanofi Sa (SAN - Free Report) .
The top 10 holdings account for about 36.39% of total assets under management.
Performance and Risk
Year-to-date, the WisdomTree Europe Hedged Equity ETF has lost about -13.47% so far, and is down about -4.26% over the last 12 months (as of 05/11/2022). HEDJ has traded between $66.23 and $82.19 in this past 52-week period.
The fund has a beta of 0.83 and standard deviation of 23.78% for the trailing three-year period, which makes HEDJ a medium risk choice in this particular space. With about 133 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree Europe Hedged Equity ETF is a reasonable option for investors seeking to outperform the European Equity ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
JPMorgan BetaBuilders Europe ETF (BBEU - Free Report) tracks MORNINGSTAR DEV EUROPE TARGET MKT EXP ID and the Vanguard FTSE Europe ETF (VGK - Free Report) tracks FTSE Developed Europe All Cap Index. JPMorgan BetaBuilders Europe ETF has $8.77 billion in assets, Vanguard FTSE Europe ETF has $18 billion. BBEU has an expense ratio of 0.09% and VGK charges 0.08%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the European Equity ETFs.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Is WisdomTree Europe Hedged Equity ETF (HEDJ) a Strong ETF Right Now?
Making its debut on 01/04/2010, smart beta exchange traded fund WisdomTree Europe Hedged Equity ETF (HEDJ - Free Report) provides investors broad exposure to the European Equity ETFs category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
Because the fund has amassed over $1.71 billion, this makes it one of the largest ETFs in the European Equity ETFs. HEDJ is managed by Wisdomtree. This particular fund seeks to match the performance of the WisdomTree Europe Hedged Equity Index before fees and expenses.
The WisdomTree Europe Hedged Equity Index is designed to provide exposure to European equities while at the same time neutralizing exposure to fluctuations between the Euro and the U.S. dollar.
Cost & Other Expenses
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
Operating expenses on an annual basis are 0.58% for HEDJ, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 2.38%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
Looking at individual holdings, Linde Plc (LIN - Free Report) accounts for about 5.17% of total assets, followed by Asml Holding Nv (ASML - Free Report) and Sanofi Sa (SAN - Free Report) .
The top 10 holdings account for about 36.39% of total assets under management.
Performance and Risk
Year-to-date, the WisdomTree Europe Hedged Equity ETF has lost about -13.47% so far, and is down about -4.26% over the last 12 months (as of 05/11/2022). HEDJ has traded between $66.23 and $82.19 in this past 52-week period.
The fund has a beta of 0.83 and standard deviation of 23.78% for the trailing three-year period, which makes HEDJ a medium risk choice in this particular space. With about 133 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree Europe Hedged Equity ETF is a reasonable option for investors seeking to outperform the European Equity ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
JPMorgan BetaBuilders Europe ETF (BBEU - Free Report) tracks MORNINGSTAR DEV EUROPE TARGET MKT EXP ID and the Vanguard FTSE Europe ETF (VGK - Free Report) tracks FTSE Developed Europe All Cap Index. JPMorgan BetaBuilders Europe ETF has $8.77 billion in assets, Vanguard FTSE Europe ETF has $18 billion. BBEU has an expense ratio of 0.09% and VGK charges 0.08%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the European Equity ETFs.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.