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Is WisdomTree Japan SmallCap Dividend ETF (DFJ) a Strong ETF Right Now?
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Making its debut on 06/16/2006, smart beta exchange traded fund WisdomTree Japan SmallCap Dividend ETF (DFJ - Free Report) provides investors broad exposure to the Asia-Pacific (Developed) ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: 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.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
Because the fund has amassed over $325.64 million, this makes it one of the average sized ETFs in the Asia-Pacific (Developed) ETFs. DFJ is managed by Wisdomtree. 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
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
With one of the more expensive products in the space, this ETF has annual operating expenses of 0.58%.
It's 12-month trailing dividend yield comes in at 2.46%.
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.
Taking into account individual holdings, Horiba Ltd accounts for about 0.86% of the fund's total assets, followed by Toyo Tire Co and Daido Steel Co Ltd.
DFJ's top 10 holdings account for about 5.78% of its total assets under management.
Performance and Risk
So far this year, DFJ has lost about -1.19%, and was up about 15.09% in the last one year (as of 01/29/2024). During this past 52-week period, the fund has traded between $64.46 and $75.35.
The ETF has a beta of 0.50 and standard deviation of 15.43% for the trailing three-year period, making it a medium risk choice in the space. With about 738 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 $10.30 billion in assets, iShares MSCI Japan ETF has $14.66 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?
Making its debut on 06/16/2006, smart beta exchange traded fund WisdomTree Japan SmallCap Dividend ETF (DFJ - Free Report) provides investors broad exposure to the Asia-Pacific (Developed) ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: 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.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
Because the fund has amassed over $325.64 million, this makes it one of the average sized ETFs in the Asia-Pacific (Developed) ETFs. DFJ is managed by Wisdomtree. 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
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
With one of the more expensive products in the space, this ETF has annual operating expenses of 0.58%.
It's 12-month trailing dividend yield comes in at 2.46%.
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.
Taking into account individual holdings, Horiba Ltd accounts for about 0.86% of the fund's total assets, followed by Toyo Tire Co and Daido Steel Co Ltd.
DFJ's top 10 holdings account for about 5.78% of its total assets under management.
Performance and Risk
So far this year, DFJ has lost about -1.19%, and was up about 15.09% in the last one year (as of 01/29/2024). During this past 52-week period, the fund has traded between $64.46 and $75.35.
The ETF has a beta of 0.50 and standard deviation of 15.43% for the trailing three-year period, making it a medium risk choice in the space. With about 738 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 $10.30 billion in assets, iShares MSCI Japan ETF has $14.66 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.