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Is WisdomTree Japan SmallCap Dividend ETF (DFJ) a Strong ETF Right Now?
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A smart beta exchange traded fund, the WisdomTree Japan SmallCap Dividend ETF (DFJ - Free Report) debuted on 06/16/2006, and offers 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.
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.
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.
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
DFJ is managed by Wisdomtree, and this fund has amassed over $204.31 million, which makes it one of the average sized ETFs in the Asia-Pacific (Developed) ETFs. Before fees and expenses, DFJ seeks to match the performance of the WisdomTree Japan SmallCap Dividend Index.
The WisdomTree Japan SmallCap Dividend Index is comprised of dividend-paying small capitalization companies in Japan.
Cost & Other Expenses
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
With one of the more expensive products in the space, this ETF has annual operating expenses of 0.58%.
DFJ's 12-month trailing dividend yield is 2.71%.
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.
When you look at individual holdings, Kobe Steel Ltd accounts for about 1.04% of the fund's total assets, followed by Cosmo Energy Holdings Co Ltd and Seven Bank Ltd.
The top 10 holdings account for about 6.56% of total assets under management.
Performance and Risk
The ETF return is roughly 13.63% so far this year and was up about 25.70% in the last one year (as of 09/26/2023). In the past 52-week period, it has traded between $55.73 and $71.80.
The ETF has a beta of 0.55 and standard deviation of 15.75% for the trailing three-year period, making it a medium risk choice in the space. With about 751 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree Japan SmallCap Dividend 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 $9.23 billion in assets, iShares MSCI Japan ETF has $13.23 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 SmallCap Dividend ETF (DFJ) a Strong ETF Right Now?
A smart beta exchange traded fund, the WisdomTree Japan SmallCap Dividend ETF (DFJ - Free Report) debuted on 06/16/2006, and offers 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.
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.
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.
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
DFJ is managed by Wisdomtree, and this fund has amassed over $204.31 million, which makes it one of the average sized ETFs in the Asia-Pacific (Developed) ETFs. Before fees and expenses, DFJ seeks to match the performance of the WisdomTree Japan SmallCap Dividend Index.
The WisdomTree Japan SmallCap Dividend Index is comprised of dividend-paying small capitalization companies in Japan.
Cost & Other Expenses
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
With one of the more expensive products in the space, this ETF has annual operating expenses of 0.58%.
DFJ's 12-month trailing dividend yield is 2.71%.
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.
When you look at individual holdings, Kobe Steel Ltd accounts for about 1.04% of the fund's total assets, followed by Cosmo Energy Holdings Co Ltd and Seven Bank Ltd.
The top 10 holdings account for about 6.56% of total assets under management.
Performance and Risk
The ETF return is roughly 13.63% so far this year and was up about 25.70% in the last one year (as of 09/26/2023). In the past 52-week period, it has traded between $55.73 and $71.80.
The ETF has a beta of 0.55 and standard deviation of 15.75% for the trailing three-year period, making it a medium risk choice in the space. With about 751 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree Japan SmallCap Dividend 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 $9.23 billion in assets, iShares MSCI Japan ETF has $13.23 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.