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Is WisdomTree Japan Hedged Equity ETF (DXJ) a Strong ETF Right Now?
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A smart beta exchange traded fund, the WisdomTree Japan Hedged Equity ETF (DXJ - 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.
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.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
Because the fund has amassed over $3.70 billion, this makes it one of the larger ETFs in the Asia-Pacific (Developed) ETFs. DXJ is managed by Wisdomtree. DXJ, before fees and expenses, 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
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.48%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 2.40%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
Looking at individual holdings, Toyota Motor Corp accounts for about 5.15% of total assets, followed by Mitsubishi Ufj Financial Group and Honda Motor Co Ltd.
Its top 10 holdings account for approximately 30.17% of DXJ's total assets under management.
Performance and Risk
The ETF has added roughly 22.72% so far this year and was up about 20.06% in the last one year (as of 11/28/2024). In the past 52-week period, it has traded between $87.13 and $117.51.
DXJ has a beta of 0.52 and standard deviation of 18.15% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 460 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 $11.73 billion in assets, iShares MSCI Japan ETF has $13.82 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?
A smart beta exchange traded fund, the WisdomTree Japan Hedged Equity ETF (DXJ - 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.
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.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
Because the fund has amassed over $3.70 billion, this makes it one of the larger ETFs in the Asia-Pacific (Developed) ETFs. DXJ is managed by Wisdomtree. DXJ, before fees and expenses, 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
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.48%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 2.40%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
Looking at individual holdings, Toyota Motor Corp accounts for about 5.15% of total assets, followed by Mitsubishi Ufj Financial Group and Honda Motor Co Ltd.
Its top 10 holdings account for approximately 30.17% of DXJ's total assets under management.
Performance and Risk
The ETF has added roughly 22.72% so far this year and was up about 20.06% in the last one year (as of 11/28/2024). In the past 52-week period, it has traded between $87.13 and $117.51.
DXJ has a beta of 0.52 and standard deviation of 18.15% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 460 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 $11.73 billion in assets, iShares MSCI Japan ETF has $13.82 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.