Tag Archives: $DXJ

And, The Winner Is…According to ETF.com…

March 20, 2015 MarketsMuse Staff Reporter Leave a comment

MarketsMuse.com ETF coverage profiles ETF.com Awards Ceremony courtesy of opening extract from ETF.com news release. Category winners for “best” and respective ‘runners up’ extend across best issuers, best strategists, best capital markets desk, and best products across equity, fixed income, and currency and include the following products: HEDJ, DXJ, CHNB, ZROZ, BNDX, VTI, EMQQ, FV, IUSB, PDBC, TYTE, WYDE, BCHP, COMT, DIVY, SXOE, DGRO, DVP, FMLP, AIRR, QVAL, ASHS.

The WisdomTree Europe Hedged Equity Fund (HEDJ) was named the ETF of the Year at the second annual ETF.com Awards held tonight in New York—in no small part because it has been more popular than competing equity strategies designed to protect U.S. investors from the strength of the dollar.

ETF.com, the 15-year-old news, views and financial data company focused exclusively on exchange-traded funds, also honored important individuals like Lee Kranefuss, who built iShares, the world’s largest ETF company; and the fund sponsor First Trust.

The annual awards ceremony, which took place at Chelsea Piers, recognizes the people, products and companies that have been instrumental in moving the 22-year-old ETF industry forward and that have helped create better options and outcomes for investors.

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ETF News

Hedged Vs. Unhedged International Currency ETFs

March 18, 2015 MarketsMuse Staff Reporter Leave a comment

MarketMuse blog update courtesy of CNBC. With investing overseas being so dangerous right now, because of enormous moves in currency, buying stocks overseas—including ETFs, why are people so keen on doing it. CNBC reporter, Bob Pisani’s ask the question:

Why doesn’t everyone buy hedged international ETFs when they want international exposure, rather than unhedged ETFs?

There are several reasons:

1) Until recently, it was almost impossible for the average investor to do so. There simply were no ETFs that enabled an investor to hedge out currency. A professional could hedge, of course, but at considerable cost.

Now that more hedged ETF products are becoming available, investors are taking note. In fact, the biggest European ETF is now a hedged product, the WisdomTree International Hedged, which recently surpassed its biggest unhedged rival, the Vanguard European ETF.

2) There was not a huge demand for such a product because currency moves like we have seen in euro this year (down 5 percent against the dollar) are very rare. Oh sure, maybe if you were investing in Argentina, but not the euro, not the yen. Most years did not involve anywhere near such dramatic moves.

This year, for example, the yen has barely moved against the dollar, so the difference between a hedged Japan ETF and an unhedged Japan ETF is very small:

That was not the case last year, when there was an enormous move in the yen versus the dollar, and investors made the DXJ the hottest ETF in years.

For the entire article from CNBC’s Bob Pisani’s story “Why currency-hedged ETFs are hot”, click here.

ETF News, Global Macro Strategy

Wisdom: Is $HEDJ The New Vogue Trade?

December 11, 2014 MarketsMuse Staff Reporter Leave a comment

Below extract courtesy of a.m. edition of “Sight Beyond Sight”, the global macro trading commentary published by Stamford, CT-based macro strategy think tank Rareview Macro LLC.

“…For most of the second half of the year we have seen a surging dollar, and a falling euro. Nothing seems to be coming that will disrupt that.

Now a lot of US investors have asked why the WisdomTree Europe Hedged Equity ETF (symbol: HEDJ) performance has been sub-optimal. Specifically, why isn’t this “strong dollar/weak euro” play not playing out much like last year’s Japan trade (strong dollar/ weak yen) as we saw with WisdomTree Japan Hedged Equity (DXJ)?

As a reminder, DXJ is a portfolio of Japanese stocks with a currency hedge overlay (i.e. 100% of assets is hedged). So HEDJ is the European version of DXJ. The underperformance therefore is simply stock-related.

For example, HEDJ is a basket of European stocks (i.e. 100% of assets is FX hedged). The underlying basket is a Wisdometree dividend weighted basket. It does not quite have the same weightings as the iShares MSCI EMU ETF (symbol: EZU) which is market cap weighted & large cap equivalent or the iShares Europe ETF (IEV) or any other standard index, but it does have a very high correlation.

If you compare HEDJ vs. EZU (i.e. use Bloomberg COMP function, HEDJ in line one and EZU in line 2 and then change the currency next to EZU to EUR instead of USD) you will see performance come back in line with HEDJ as it displays the effect of the FX hedge.

So HEDJ is working exactly the way it should given how it is constructed and using HEDJ to get long European stocks and a weaker EUR is correct instrument for that view.

So the question becomes, how do you gain using HEDJ? more