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Is WisdomTree Japan Hedged Equity ETF (DXJ) a Strong ETF Right Now?
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Launched on 06/16/2006, the WisdomTree Japan Hedged Equity ETF (DXJ - Free Report) is a smart beta exchange traded fund offering broad exposure to the Asia-Pacific (Developed) ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
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.
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.
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
DXJ is managed by Wisdomtree, and this fund has amassed over $1.95 billion, which makes it one of the larger ETFs in the Asia-Pacific (Developed) ETFs. This particular fund seeks to match the performance of the WisdomTree Japan Hedged Equity Index before fees and expenses.
The WisdomTree Japan Hedged Equity Index is designed to provide exposure to Japanese equity markets while at the same time neutralizing exposure to fluctuations of the Japanese Yen movements relative to the U.S. dollar.
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 DXJ are 0.48%, which makes it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 2.08%.
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, Toyota Motor Corp accounts for about 5.57% of the fund's total assets, followed by Mitsubishi Ufj Financial Group and Sumitomo Mitsui Financial Group.
DXJ's top 10 holdings account for about 31.54% of its total assets under management.
Performance and Risk
The ETF has gained about 20.43% and it's up approximately 35.38% so far this year and in the past one year (as of 11/02/2021), respectively. DXJ has traded between $49.48 and $65.19 during this last 52-week period.
The ETF has a beta of 0.76 and standard deviation of 23.44% for the trailing three-year period, making it a medium risk choice in the space. With about 423 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree Japan Hedged Equity ETF is a reasonable option for investors seeking to outperform the Asia-Pacific (Developed) ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
JPMorgan BetaBuilders Japan ETF (BBJP - Free Report) tracks MORNINGSTAR JAPAN TRGT MRKT EXPOSURE ID and the iShares MSCI Japan ETF (EWJ - Free Report) tracks MSCI Japan Index. JPMorgan BetaBuilders Japan ETF has $8.09 billion in assets, iShares MSCI Japan ETF has $12.98 billion. BBJP has an expense ratio of 0.19% and EWJ charges 0.51%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Asia-Pacific (Developed) 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 Japan Hedged Equity ETF (DXJ) a Strong ETF Right Now?
Launched on 06/16/2006, the WisdomTree Japan Hedged Equity ETF (DXJ - Free Report) is a smart beta exchange traded fund offering broad exposure to the Asia-Pacific (Developed) ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
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.
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.
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
DXJ is managed by Wisdomtree, and this fund has amassed over $1.95 billion, which makes it one of the larger ETFs in the Asia-Pacific (Developed) ETFs. This particular fund seeks to match the performance of the WisdomTree Japan Hedged Equity Index before fees and expenses.
The WisdomTree Japan Hedged Equity Index is designed to provide exposure to Japanese equity markets while at the same time neutralizing exposure to fluctuations of the Japanese Yen movements relative to the U.S. dollar.
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 DXJ are 0.48%, which makes it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 2.08%.
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, Toyota Motor Corp accounts for about 5.57% of the fund's total assets, followed by Mitsubishi Ufj Financial Group and Sumitomo Mitsui Financial Group.
DXJ's top 10 holdings account for about 31.54% of its total assets under management.
Performance and Risk
The ETF has gained about 20.43% and it's up approximately 35.38% so far this year and in the past one year (as of 11/02/2021), respectively. DXJ has traded between $49.48 and $65.19 during this last 52-week period.
The ETF has a beta of 0.76 and standard deviation of 23.44% for the trailing three-year period, making it a medium risk choice in the space. With about 423 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree Japan Hedged Equity ETF is a reasonable option for investors seeking to outperform the Asia-Pacific (Developed) ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
JPMorgan BetaBuilders Japan ETF (BBJP - Free Report) tracks MORNINGSTAR JAPAN TRGT MRKT EXPOSURE ID and the iShares MSCI Japan ETF (EWJ - Free Report) tracks MSCI Japan Index. JPMorgan BetaBuilders Japan ETF has $8.09 billion in assets, iShares MSCI Japan ETF has $12.98 billion. BBJP has an expense ratio of 0.19% and EWJ charges 0.51%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Asia-Pacific (Developed) 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.