Is WisdomTree Europe Hedged Equity ETF (HEDJ) a Strong ETF Right Now?

The WisdomTree Europe Hedged Equity ETF (HEDJ) made its debut on 01/04/2010, and is a smart beta exchange traded fund that provides broad exposure to the European Equity ETFs category of the market.

What Are Smart Beta ETFs?

Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.

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

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.

Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.

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 $1.75 billion, this makes it one of the larger ETFs in the European Equity ETFs. HEDJ is managed by Wisdomtree. Before fees and expenses, HEDJ 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

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.

With on par with most peer products in the space, this ETF has annual operating expenses of 0.58%.

It's 12-month trailing dividend yield comes in at 2.18%.

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, Us Dollar accounts for about 94.84% of total assets, followed by Banco Bilbao Vizcaya Argentaria Sa (BBVA) and Banco Santander Sa (SAN).

Its top 10 holdings account for approximately 134.7% of HEDJ's total assets under management.

Performance and Risk

The ETF has gained about 19.89% so far this year and it's up approximately 19.33% in the last one year (as of 10/20/2025). In the past 52-week period, it has traded between $41.90 and $51.55

The fund has a beta of 0.81 and standard deviation of 15.32% for the trailing three-year period, which makes HEDJ a medium risk choice in this particular space. With about 132 holdings, it effectively diversifies company-specific risk .

Alternatives

WisdomTree Europe Hedged Equity ETF is not a suitable option for investors seeking to outperform the European Equity ETFs segment of the market. Instead, there are other ETFs in the space which investors should 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 $8.47 billion in assets, Vanguard FTSE Europe ETF has $27.88 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

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This article originally published on Zacks Investment Research (zacks.com).

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