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Is WisdomTree Japan Hedged Equity ETF (DXJ) a Strong ETF Right Now?
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Designed to provide broad exposure to the Asia-Pacific (Developed) ETFs category of the market, the WisdomTree Japan Hedged Equity ETF (DXJ - Free Report) is a smart beta exchange traded fund launched on 06/16/2006.
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.
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.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track 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.
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 $3.87 billion, making it one of the larger ETFs in the Asia-Pacific (Developed) ETFs. 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.
Operating expenses on an annual basis are 0.48% for this ETF, which makes it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 3.48%.
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, Toyota Motor Corp accounts for about 5.86% of the fund's total assets, followed by Mitsubishi Ufj Financial Group and Sumitomo Mitsui Financial Group.
The top 10 holdings account for about 30.8% of total assets under management.
Performance and Risk
Year-to-date, the WisdomTree Japan Hedged Equity ETF has added about 0.09% so far, and it's up approximately 20.52% over the last 12 months (as of 01/29/2025). DXJ has traded between $91.43 and $117.51 in this past 52-week period.
The fund has a beta of 0.51 and standard deviation of 18.15% for the trailing three-year period, which makes DXJ a medium risk choice in this particular space. With about 440 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 $11.28 billion in assets, iShares MSCI Japan ETF has $13.64 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?
Designed to provide broad exposure to the Asia-Pacific (Developed) ETFs category of the market, the WisdomTree Japan Hedged Equity ETF (DXJ - Free Report) is a smart beta exchange traded fund launched on 06/16/2006.
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.
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.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track 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.
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 $3.87 billion, making it one of the larger ETFs in the Asia-Pacific (Developed) ETFs. 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.
Operating expenses on an annual basis are 0.48% for this ETF, which makes it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 3.48%.
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, Toyota Motor Corp accounts for about 5.86% of the fund's total assets, followed by Mitsubishi Ufj Financial Group and Sumitomo Mitsui Financial Group.
The top 10 holdings account for about 30.8% of total assets under management.
Performance and Risk
Year-to-date, the WisdomTree Japan Hedged Equity ETF has added about 0.09% so far, and it's up approximately 20.52% over the last 12 months (as of 01/29/2025). DXJ has traded between $91.43 and $117.51 in this past 52-week period.
The fund has a beta of 0.51 and standard deviation of 18.15% for the trailing three-year period, which makes DXJ a medium risk choice in this particular space. With about 440 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 $11.28 billion in assets, iShares MSCI Japan ETF has $13.64 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.