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Is WisdomTree Japan Hedged Equity ETF (DXJ) a Strong ETF Right Now?
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Making its debut on 06/16/2006, smart beta exchange traded fund WisdomTree Japan Hedged Equity ETF (DXJ - Free Report) provides investors broad exposure to the Asia-Pacific (Developed) ETFs category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
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.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
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.
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
Managed by Wisdomtree, DXJ has amassed assets over $1.98 billion, making it one of the larger ETFs in the Asia-Pacific (Developed) ETFs. Before fees and expenses, DXJ seeks to match the performance of the WisdomTree Japan Hedged Equity Index.
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
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.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.48%.
The fund has a 12-month trailing dividend yield of 2.96%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Looking at individual holdings, Toyota Motor Corp accounts for about 5.33% of total assets, followed by Japan Tobacco Inc and Mitsubishi Ufj Financial Group.
DXJ's top 10 holdings account for about 33.65% of its total assets under management.
Performance and Risk
So far this year, DXJ has added about 4.92%, and it's up approximately 3.80% in the last one year (as of 09/15/2022). During this past 52-week period, the fund has traded between $57.34 and $66.72.
DXJ has a beta of 0.65 and standard deviation of 23.21% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 427 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 $6.41 billion in assets, iShares MSCI Japan ETF has $9.37 billion. BBJP has an expense ratio of 0.19% and EWJ charges 0.50%.
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?
Making its debut on 06/16/2006, smart beta exchange traded fund WisdomTree Japan Hedged Equity ETF (DXJ - Free Report) provides investors broad exposure to the Asia-Pacific (Developed) ETFs category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
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.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
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.
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
Managed by Wisdomtree, DXJ has amassed assets over $1.98 billion, making it one of the larger ETFs in the Asia-Pacific (Developed) ETFs. Before fees and expenses, DXJ seeks to match the performance of the WisdomTree Japan Hedged Equity Index.
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
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.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.48%.
The fund has a 12-month trailing dividend yield of 2.96%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Looking at individual holdings, Toyota Motor Corp accounts for about 5.33% of total assets, followed by Japan Tobacco Inc and Mitsubishi Ufj Financial Group.
DXJ's top 10 holdings account for about 33.65% of its total assets under management.
Performance and Risk
So far this year, DXJ has added about 4.92%, and it's up approximately 3.80% in the last one year (as of 09/15/2022). During this past 52-week period, the fund has traded between $57.34 and $66.72.
DXJ has a beta of 0.65 and standard deviation of 23.21% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 427 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 $6.41 billion in assets, iShares MSCI Japan ETF has $9.37 billion. BBJP has an expense ratio of 0.19% and EWJ charges 0.50%.
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.