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Is WisdomTree Europe Hedged Equity ETF (HEDJ) a Strong ETF Right Now?
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A smart beta exchange traded fund, the WisdomTree Europe Hedged Equity ETF (HEDJ - Free Report) debuted on 01/04/2010, and offers broad exposure to the European Equity 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.
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.
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.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
Because the fund has amassed over $1.41 billion, this makes it one of the larger ETFs in the European Equity ETFs. HEDJ is managed by Wisdomtree. Before fees and expenses, this particular fund 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
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.
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 3.34%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
Taking into account individual holdings, Stellantis Nv (STLAM) accounts for about 7.92% of the fund's total assets, followed by Banco Bilbao Vizcaya Argentaria Sa (BBVA - Free Report) and Banco Santander Sa (SAN - Free Report) .
The top 10 holdings account for about 43.88% of total assets under management.
Performance and Risk
So far this year, HEDJ has added about 22.11%, and is up about 15.26% in the last one year (as of 12/01/2023). During this past 52-week period, the fund has traded between $34.98 and $41.97.
The fund has a beta of 0.88 and standard deviation of 16.41% for the trailing three-year period, which makes HEDJ a medium risk choice in this particular space. With about 129 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 $6.51 billion in assets, Vanguard FTSE Europe ETF has $18.09 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?
A smart beta exchange traded fund, the WisdomTree Europe Hedged Equity ETF (HEDJ - Free Report) debuted on 01/04/2010, and offers broad exposure to the European Equity 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.
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.
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.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
Because the fund has amassed over $1.41 billion, this makes it one of the larger ETFs in the European Equity ETFs. HEDJ is managed by Wisdomtree. Before fees and expenses, this particular fund 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
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.
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 3.34%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
Taking into account individual holdings, Stellantis Nv (STLAM) accounts for about 7.92% of the fund's total assets, followed by Banco Bilbao Vizcaya Argentaria Sa (BBVA - Free Report) and Banco Santander Sa (SAN - Free Report) .
The top 10 holdings account for about 43.88% of total assets under management.
Performance and Risk
So far this year, HEDJ has added about 22.11%, and is up about 15.26% in the last one year (as of 12/01/2023). During this past 52-week period, the fund has traded between $34.98 and $41.97.
The fund has a beta of 0.88 and standard deviation of 16.41% for the trailing three-year period, which makes HEDJ a medium risk choice in this particular space. With about 129 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 $6.51 billion in assets, Vanguard FTSE Europe ETF has $18.09 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.