The WisdomTree Europe Hedged Equity ETF (HEDJ) was launched on 01/04/2010, and is a smart beta exchange traded fund designed to offer 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.
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.
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.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
The fund is managed by Wisdomtree. HEDJ has been able to amass assets over $1.58 billion, making it one of the larger ETFs in the European Equity ETFs. HEDJ seeks to match the performance of the WisdomTree Europe Hedged Equity Index before fees and expenses.
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.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.58%.
It has a 12-month trailing dividend yield of 3.24%.
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.
When you look at individual holdings, Banco Bilbao Vizcaya Argentaria Sa (BBVA) accounts for about 6.92% of the fund's total assets, followed by Deutsche Telekom Ag (DTE) and Banco Santander Sa (SAN).
HEDJ's top 10 holdings account for about 42% of its total assets under management.
Performance and Risk
So far this year, HEDJ return is roughly 1.14%, and is down about -3.60% in the last one year (as of 04/14/2025). During this past 52-week period, the fund has traded between $41.58 and $49.84.
HEDJ has a beta of 0.78 and standard deviation of 16.80% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 133 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 $8.59 billion in assets, Vanguard FTSE Europe ETF has $21.14 billion. EZU has an expense ratio of 0.51% and VGK charges 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.
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WisdomTree Europe Hedged Equity ETF (HEDJ): ETF Research Reports DTE Energy Company (DTE): Free Stock Analysis Report Banco Bilbao Viscaya Argentaria S.A. (BBVA): Free Stock Analysis Report Banco Santander, S.A. (SAN): Free Stock Analysis Report iShares MSCI Eurozone ETF (EZU): ETF Research Reports Vanguard FTSE Europe ETF (VGK): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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