We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Is WisdomTree Europe Hedged Equity ETF (HEDJ) a Strong ETF Right Now?
Read MoreHide Full Article
The WisdomTree Europe Hedged Equity ETF (HEDJ - Free Report) was launched on 01/04/2010, and is a smart beta exchange traded fund designed to offer broad exposure to the European Equity ETFs category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader 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.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other 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
Managed by Wisdomtree, HEDJ has amassed assets over $1.27 billion, making it one of the larger ETFs in the European Equity ETFs. 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
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.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.58%.
The fund has a 12-month trailing dividend yield of 2.61%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Taking into account individual holdings, Stellantis Nv (STLA - Free Report) accounts for about 6.31% of the fund's total assets, followed by Asml Holding Nv (ASML - Free Report) and Banco Bilbao Vizcaya Argentaria Sa (BBVA - Free Report) .
Its top 10 holdings account for approximately 22.36% of HEDJ's total assets under management.
Performance and Risk
The ETF has added about 8.32% and is down about -2.03% so far this year and in the past one year (as of 01/20/2023), respectively. HEDJ has traded between $62.11 and $78.80 during this last 52-week period.
The fund has a beta of 0.87 and standard deviation of 24.81% for the trailing three-year period, which makes HEDJ a medium risk choice in this particular space. With about 131 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 $6.68 billion in assets, Vanguard FTSE Europe ETF has $16.26 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.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Is WisdomTree Europe Hedged Equity ETF (HEDJ) a Strong ETF Right Now?
The WisdomTree Europe Hedged Equity ETF (HEDJ - Free Report) was launched on 01/04/2010, and is a smart beta exchange traded fund designed to offer broad exposure to the European Equity ETFs category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader 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.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other 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
Managed by Wisdomtree, HEDJ has amassed assets over $1.27 billion, making it one of the larger ETFs in the European Equity ETFs. 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
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.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.58%.
The fund has a 12-month trailing dividend yield of 2.61%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Taking into account individual holdings, Stellantis Nv (STLA - Free Report) accounts for about 6.31% of the fund's total assets, followed by Asml Holding Nv (ASML - Free Report) and Banco Bilbao Vizcaya Argentaria Sa (BBVA - Free Report) .
Its top 10 holdings account for approximately 22.36% of HEDJ's total assets under management.
Performance and Risk
The ETF has added about 8.32% and is down about -2.03% so far this year and in the past one year (as of 01/20/2023), respectively. HEDJ has traded between $62.11 and $78.80 during this last 52-week period.
The fund has a beta of 0.87 and standard deviation of 24.81% for the trailing three-year period, which makes HEDJ a medium risk choice in this particular space. With about 131 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 $6.68 billion in assets, Vanguard FTSE Europe ETF has $16.26 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.