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Is WisdomTree Dynamic Currency Hedged International Equity Fund (DDWM) a Hot ETF Right Now?

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A smart beta exchange traded fund, the WisdomTree Dynamic Currency Hedged International Equity Fund (DDWM - Free Report) debuted on 01/07/2016, and offers broad exposure to the Broad Developed World ETFs category of the U.S. equity market.

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.

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

The fund is managed by Wisdomtree. DDWM has been able to amass assets over $505.01 M, making it one of the average sized ETFs in the Broad Developed World ETFs. Before fees and expenses, DDWM seeks to match the performance of the WisdomTree Dynamic Currency Hedged International Equity Index.

The WisdomTree Dynamic Currency Hedged International Equity Index is a fundamentally weighted Index that measures the performance of dividend-paying companies in the industrialized world, excluding Canada & the US, & it remove from index performance the impact of changes to the value of foreign currencies relative to the USD with a hedge ratio ranging from 0 to 100% on a monthly basis.

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.

Operating expenses on an annual basis are 0.35% for DDWM, making it on par with most peer products in the space.

The fund has a 12-month trailing dividend yield of 1.96%.

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.

When you look at individual holdings, Royal Dutch Shell Plc Class B (RDSB) accounts for about 1.89% of the fund's total assets, followed by Bp Plc (BP/) and Hsbc Holdings Plc (HSBA).

DDWM's top 10 holdings account for about 14.01% of its total assets under management.

Performance and Risk

DDWM has lost about -0.98% so far this year, and as of 06/13/2018, is up about 7.14% in the last one year. In the past 52-week period, the fund has traded between $28.31 and $31.95.

The ETF has a beta of 0.57 and standard deviation of 13.26% for the trailing three-year period. With about 789 holdings, it effectively diversifies company-specific risk.

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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