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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.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
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.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
The fund is managed by Wisdomtree. HEDJ has been able to amass assets over $1.48 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 this ETF are 0.58%, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 3.25%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
When you look at individual holdings, Stellantis Nv (STLAM) accounts for about 8.71% of the fund's total assets, followed by Banco Bilbao Vizcaya Argentaria Sa (BBVA - Free Report) and Asml Holding Nv (ASML - Free Report) .
HEDJ's top 10 holdings account for about 42.72% of its total assets under management.
Performance and Risk
So far this year, HEDJ has added about 1.87%, and it's up approximately 17.82% in the last one year (as of 01/31/2024). During this past 52-week period, the fund has traded between $37.48 and $43.65.
HEDJ has a beta of 0.90 and standard deviation of 16.31% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 152 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 $7.13 billion in assets, Vanguard FTSE Europe ETF has $18.78 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.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
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.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
The fund is managed by Wisdomtree. HEDJ has been able to amass assets over $1.48 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 this ETF are 0.58%, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 3.25%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
When you look at individual holdings, Stellantis Nv (STLAM) accounts for about 8.71% of the fund's total assets, followed by Banco Bilbao Vizcaya Argentaria Sa (BBVA - Free Report) and Asml Holding Nv (ASML - Free Report) .
HEDJ's top 10 holdings account for about 42.72% of its total assets under management.
Performance and Risk
So far this year, HEDJ has added about 1.87%, and it's up approximately 17.82% in the last one year (as of 01/31/2024). During this past 52-week period, the fund has traded between $37.48 and $43.65.
HEDJ has a beta of 0.90 and standard deviation of 16.31% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 152 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 $7.13 billion in assets, Vanguard FTSE Europe ETF has $18.78 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.