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Is WisdomTree Japan Hedged Equity ETF (DXJ) a Strong ETF Right Now?
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A smart beta exchange traded fund, the WisdomTree Japan Hedged Equity ETF (DXJ - Free Report) debuted on 06/16/2006, and offers broad exposure to the Asia-Pacific (Developed) ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
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
The fund is managed by Wisdomtree, and has been able to amass over $1.86 billion, which makes it one of the larger ETFs in the Asia-Pacific (Developed) ETFs. This particular fund seeks to match the performance of the WisdomTree Japan Hedged Equity Index before fees and expenses.
The WisdomTree Japan Hedged Equity Index is designed to provide exposure to Japanese equity markets while at the same time neutralizing exposure to fluctuations of the Japanese Yen movements relative to the U.S. dollar.
Cost & Other Expenses
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Operating expenses on an annual basis are 0.48% for this ETF, which makes it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 2.67%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
Looking at individual holdings, Toyota Motor Corp accounts for about 5.21% of total assets, followed by Japan Tobacco Inc and Mitsubishi Ufj Financial Group.
DXJ's top 10 holdings account for about 33.84% of its total assets under management.
Performance and Risk
The ETF has lost about -1.72% and was up about 5.77% so far this year and in the past one year (as of 05/12/2022), respectively. DXJ has traded between $57.34 and $65.89 during this last 52-week period.
The fund has a beta of 0.70 and standard deviation of 23.49% for the trailing three-year period, which makes DXJ a medium risk choice in this particular space. With about 416 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree Japan Hedged Equity ETF is a reasonable option for investors seeking to outperform the Asia-Pacific (Developed) ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
JPMorgan BetaBuilders Japan ETF (BBJP - Free Report) tracks MORNINGSTAR JAPAN TRGT MRKT EXPOSURE ID and the iShares MSCI Japan ETF (EWJ - Free Report) tracks MSCI Japan Index. JPMorgan BetaBuilders Japan ETF has $6.88 billion in assets, iShares MSCI Japan ETF has $9.25 billion. BBJP has an expense ratio of 0.19% and EWJ charges 0.50%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Asia-Pacific (Developed) 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 Japan Hedged Equity ETF (DXJ) a Strong ETF Right Now?
A smart beta exchange traded fund, the WisdomTree Japan Hedged Equity ETF (DXJ - Free Report) debuted on 06/16/2006, and offers broad exposure to the Asia-Pacific (Developed) ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
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
The fund is managed by Wisdomtree, and has been able to amass over $1.86 billion, which makes it one of the larger ETFs in the Asia-Pacific (Developed) ETFs. This particular fund seeks to match the performance of the WisdomTree Japan Hedged Equity Index before fees and expenses.
The WisdomTree Japan Hedged Equity Index is designed to provide exposure to Japanese equity markets while at the same time neutralizing exposure to fluctuations of the Japanese Yen movements relative to the U.S. dollar.
Cost & Other Expenses
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Operating expenses on an annual basis are 0.48% for this ETF, which makes it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 2.67%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
Looking at individual holdings, Toyota Motor Corp accounts for about 5.21% of total assets, followed by Japan Tobacco Inc and Mitsubishi Ufj Financial Group.
DXJ's top 10 holdings account for about 33.84% of its total assets under management.
Performance and Risk
The ETF has lost about -1.72% and was up about 5.77% so far this year and in the past one year (as of 05/12/2022), respectively. DXJ has traded between $57.34 and $65.89 during this last 52-week period.
The fund has a beta of 0.70 and standard deviation of 23.49% for the trailing three-year period, which makes DXJ a medium risk choice in this particular space. With about 416 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree Japan Hedged Equity ETF is a reasonable option for investors seeking to outperform the Asia-Pacific (Developed) ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
JPMorgan BetaBuilders Japan ETF (BBJP - Free Report) tracks MORNINGSTAR JAPAN TRGT MRKT EXPOSURE ID and the iShares MSCI Japan ETF (EWJ - Free Report) tracks MSCI Japan Index. JPMorgan BetaBuilders Japan ETF has $6.88 billion in assets, iShares MSCI Japan ETF has $9.25 billion. BBJP has an expense ratio of 0.19% and EWJ charges 0.50%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Asia-Pacific (Developed) 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.