A smart beta exchange traded fund, the WisdomTree Europe Hedged Equity ETF (HEDJ Quick QuoteHEDJ - Free Report) debuted on 01/04/2010, and offers broad exposure to the European Equity ETFs category of the market.

What Are Smart Beta ETFs?

The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.

Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.

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.

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.

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, HEDJ has amassed assets over $1.77 billion, making it one of the larger ETFs in the European Equity ETFs. HEDJ, before fees and expenses, seeks to match the performance of the WisdomTree Europe Hedged Equity Index.

The WisdomTree Europe Hedged Equity Index is designed to provide exposure to European equities while at the same time neutralizing exposure to fluctuations between the Euro and 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.

Annual operating expenses for HEDJ are 0.58%, which makes it on par with most peer products in the space.

It has a 12-month trailing dividend yield of 2.14%.

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.

When you look at individual holdings, European Euro (eur)accounts for about 100% of the fund's total assets, followed by Banco Bilbao Vizcaya Argentaria Sa (BBVA) and Lvmh Moet Hennessy Louis Vuitton Se (MC).

Its top 10 holdings account for approximately 138.89% of HEDJ's total assets under management.

Performance and Risk

So far this year, HEDJ has gained about 22.2%, and is up about 22.99% in the last one year (as of 12/23/2025). During this past 52-week period, the fund has traded between $41.90 and $52.90.

The ETF has a beta of 0.77 and standard deviation of 15.00% for the trailing three-year period, making it a medium risk choice in the space. With about 137 holdings, it effectively diversifies company-specific risk .

Alternatives

WisdomTree Europe Hedged Equity ETF is a reasonable option for investors seeking to outperform the European Equity ETFs segment of the market. However, there are other ETFs in the space which investors could consider.

iShares MSCI Eurozone ETF (EZU) tracks MSCI EMU Index and the Vanguard FTSE Europe ETF (VGK) tracks FTSE Developed Europe All Cap Index. iShares MSCI Eurozone ETF has $8.75 billion in assets, Vanguard FTSE Europe ETF has $29 billion. EZU has an expense ratio of 0.51% and VGK changes 0.06%.

Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the European Equity 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.