Launched on 06/16/2006, the WisdomTree Japan SmallCap Dividend ETF (DFJ Quick QuoteDFJ - Free Report) is a smart beta exchange traded fund offering broad exposure to the Asia-Pacific (Developed) 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.

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.

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.

This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.

Fund Sponsor & Index

Because the fund has amassed over $376.13 million, this makes it one of the average sized ETFs in the Asia-Pacific (Developed) ETFs. DFJ is managed by Wisdomtree. DFJ seeks to match the performance of the WisdomTree Japan SmallCap Dividend Index before fees and expenses.

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.

Operating expenses on an annual basis are 0.58% for DFJ, making it on par with most peer products in the space.

DFJ's 12-month trailing dividend yield is 2.67%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.

Looking at individual holdings, Us Dollar accounts for about 1.35% of total assets, followed by Daishi Hokuetsu Financial Grp and Chugin Financial Group Inc.

DFJ's top 10 holdings account for about 6.54% of its total assets under management.

Performance and Risk

The ETF has added about 9.91% so far this year and it's up approximately 25.82% in the last one year (as of 07/20/2026). In the past 52-week period, it has traded between $85.59 and $112.88

The fund has a beta of 0.43 and standard deviation of 15.94% for the trailing three-year period, which makes DFJ a medium risk choice in this particular space. With about 804 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) tracks MORNINGSTAR JAPAN TRGT MRKT EXPOSURE ID and the iShares MSCI Japan ETF (EWJ) tracks MSCI Japan Index. JPMorgan BetaBuilders Japan ETF has $17.07 billion in assets, iShares MSCI Japan ETF has $21.55 billion. BBJP has an expense ratio of 0.19% and EWJ changes 0.49%.

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.