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Is WisdomTree Europe Hedged Equity ETF (HEDJ) a Strong ETF Right Now?
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Launched on 01/04/2010, the WisdomTree Europe Hedged Equity ETF (HEDJ - Free Report) is a smart beta exchange traded fund offering broad exposure to the European Equity 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.
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.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
The fund is managed by Wisdomtree. HEDJ has been able to amass assets over $1.28 billion, making it one of the larger ETFs in the European Equity ETFs. This particular fund, before fees and expenses, seeks to match the performance of the WisdomTree Europe Hedged Equity Index.
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
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Annual operating expenses for HEDJ are 0.58%, which makes it on par with most peer products in the space.
HEDJ's 12-month trailing dividend yield is 3.08%.
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.
When you look at individual holdings, Linde Plc (LIN - Free Report) accounts for about 6.23% of the fund's total assets, followed by Lvmh Moet Hennessy Louis Vuitton Se (MC - Free Report) and Asml Holding Nv (ASML - Free Report) .
The top 10 holdings account for about 14.57% of total assets under management.
Performance and Risk
The ETF has lost about -9.23% and is down about -8.62% so far this year and in the past one year (as of 11/14/2022), respectively. HEDJ has traded between $62.11 and $82.19 during this last 52-week period.
HEDJ has a beta of 0.85 and standard deviation of 24.66% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 137 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree Europe Hedged Equity ETF is not a suitable option for investors seeking to outperform the European Equity ETFs segment of the market. Instead, there are other ETFs in the space which investors should consider.
IShares MSCI Eurozone ETF (EZU - Free Report) tracks MSCI EMU Index and the Vanguard FTSE Europe ETF (VGK - Free Report) tracks FTSE Developed Europe All Cap Index. IShares MSCI Eurozone ETF has $5.52 billion in assets, Vanguard FTSE Europe ETF has $15.05 billion. EZU has an expense ratio of 0.50% 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?
Launched on 01/04/2010, the WisdomTree Europe Hedged Equity ETF (HEDJ - Free Report) is a smart beta exchange traded fund offering broad exposure to the European Equity 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.
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.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
The fund is managed by Wisdomtree. HEDJ has been able to amass assets over $1.28 billion, making it one of the larger ETFs in the European Equity ETFs. This particular fund, before fees and expenses, seeks to match the performance of the WisdomTree Europe Hedged Equity Index.
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
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Annual operating expenses for HEDJ are 0.58%, which makes it on par with most peer products in the space.
HEDJ's 12-month trailing dividend yield is 3.08%.
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.
When you look at individual holdings, Linde Plc (LIN - Free Report) accounts for about 6.23% of the fund's total assets, followed by Lvmh Moet Hennessy Louis Vuitton Se (MC - Free Report) and Asml Holding Nv (ASML - Free Report) .
The top 10 holdings account for about 14.57% of total assets under management.
Performance and Risk
The ETF has lost about -9.23% and is down about -8.62% so far this year and in the past one year (as of 11/14/2022), respectively. HEDJ has traded between $62.11 and $82.19 during this last 52-week period.
HEDJ has a beta of 0.85 and standard deviation of 24.66% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 137 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree Europe Hedged Equity ETF is not a suitable option for investors seeking to outperform the European Equity ETFs segment of the market. Instead, there are other ETFs in the space which investors should consider.
IShares MSCI Eurozone ETF (EZU - Free Report) tracks MSCI EMU Index and the Vanguard FTSE Europe ETF (VGK - Free Report) tracks FTSE Developed Europe All Cap Index. IShares MSCI Eurozone ETF has $5.52 billion in assets, Vanguard FTSE Europe ETF has $15.05 billion. EZU has an expense ratio of 0.50% 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.