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Is WisdomTree Japan Hedged Equity ETF (DXJ) a Strong ETF Right Now?
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Launched on 06/16/2006, the WisdomTree Japan Hedged Equity ETF (DXJ - Free Report) is a smart beta exchange traded fund offering broad exposure to the Asia-Pacific (Developed) 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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
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, and has been able to amass over $1.98 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
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
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 2.97%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. 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 5.09% of total assets, followed by Japan Tobacco Inc and Mitsubishi Ufj Financial Group.
Performance and Risk
So far this year, DXJ has gained about 7.96%, and it's up approximately 7.66% in the last one year (as of 11/17/2022). During this past 52-week period, the fund has traded between $57.34 and $67.10.
The fund has a beta of 0.64 and standard deviation of 23.25% for the trailing three-year period, which makes DXJ a medium risk choice in this particular space. With about 423 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 $6.77 billion in assets, iShares MSCI Japan ETF has $9.08 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?
Launched on 06/16/2006, the WisdomTree Japan Hedged Equity ETF (DXJ - Free Report) is a smart beta exchange traded fund offering broad exposure to the Asia-Pacific (Developed) 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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
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, and has been able to amass over $1.98 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
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
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 2.97%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. 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 5.09% of total assets, followed by Japan Tobacco Inc and Mitsubishi Ufj Financial Group.
Performance and Risk
So far this year, DXJ has gained about 7.96%, and it's up approximately 7.66% in the last one year (as of 11/17/2022). During this past 52-week period, the fund has traded between $57.34 and $67.10.
The fund has a beta of 0.64 and standard deviation of 23.25% for the trailing three-year period, which makes DXJ a medium risk choice in this particular space. With about 423 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 $6.77 billion in assets, iShares MSCI Japan ETF has $9.08 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.