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

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The WisdomTree Dynamic Currency Hedged International Equity Fund (DDWM - Free Report) made its debut on 01/07/2016, and is a smart beta exchange traded fund that provides broad exposure to the Broad Developed World 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.

Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option 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

Managed by Wisdomtree, DDWM has amassed assets over $235.64 M, making it one of the average sized ETFs in the Broad Developed World ETFs. This particular fund, before fees and expenses, 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

Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.

Annual operating expenses for this ETF are 0.35%, making it on par with most peer products in the space.

The fund has a 12-month trailing dividend yield of 3.42%.

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.

Looking at individual holdings, Hsbc Holdings Plc (HSBA) accounts for about 1.40% of total assets, followed by Bp Plc (BP/) and China Mobile Ltd.

The top 10 holdings account for about 12.64% of total assets under management.

Performance and Risk

The fund's year-to-date return has lost about -0.35%, and is up roughly 4.98% in the last one year (as of 08/06/2018). DDWM has traded between $28.70 and $31.95 in the past 52-week period.

The ETF has a beta of 0.59 and standard deviation of 13.08% for the trailing three-year period. With about 848 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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