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Is WisdomTree Europe Hedged Equity ETF (HEDJ) a Strong ETF Right Now?
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Designed to provide broad exposure to the European Equity ETFs category of the market, the WisdomTree Europe Hedged Equity ETF (HEDJ - Free Report) is a smart beta exchange traded fund launched on 01/04/2010.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
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.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
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 $1.43 billion, making it one of the larger ETFs in the European Equity ETFs. HEDJ, 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
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.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.58%.
HEDJ's 12-month trailing dividend yield is 3.40%.
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 (STLAM) accounts for about 6.49% of the fund's total assets, followed by Asml Holding Nv (ASML - Free Report) and Lvmh Moet Hennessy Louis Vuitton Se (MC - Free Report) .
Its top 10 holdings account for approximately 41.1% of HEDJ's total assets under management.
Performance and Risk
Year-to-date, the WisdomTree Europe Hedged Equity ETF return is roughly 20.62% so far, and was up about 23.87% over the last 12 months (as of 07/26/2023). HEDJ has traded between $62.11 and $83.81 in this past 52-week period.
HEDJ has a beta of 0.88 and standard deviation of 17.16% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 130 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.
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 $8.36 billion in assets, Vanguard FTSE Europe ETF has $19.33 billion. EZU has an expense ratio of 0.52% and VGK charges 0.11%.
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?
Designed to provide broad exposure to the European Equity ETFs category of the market, the WisdomTree Europe Hedged Equity ETF (HEDJ - Free Report) is a smart beta exchange traded fund launched on 01/04/2010.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
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.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
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 $1.43 billion, making it one of the larger ETFs in the European Equity ETFs. HEDJ, 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
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.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.58%.
HEDJ's 12-month trailing dividend yield is 3.40%.
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 (STLAM) accounts for about 6.49% of the fund's total assets, followed by Asml Holding Nv (ASML - Free Report) and Lvmh Moet Hennessy Louis Vuitton Se (MC - Free Report) .
Its top 10 holdings account for approximately 41.1% of HEDJ's total assets under management.
Performance and Risk
Year-to-date, the WisdomTree Europe Hedged Equity ETF return is roughly 20.62% so far, and was up about 23.87% over the last 12 months (as of 07/26/2023). HEDJ has traded between $62.11 and $83.81 in this past 52-week period.
HEDJ has a beta of 0.88 and standard deviation of 17.16% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 130 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.
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 $8.36 billion in assets, Vanguard FTSE Europe ETF has $19.33 billion. EZU has an expense ratio of 0.52% and VGK charges 0.11%.
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.