A smart beta exchange traded fund, the WisdomTree Europe Hedged Equity ETF (HEDJ) debuted on 01/04/2010, and offers broad exposure to the European Equity ETFs category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
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.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
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.
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
The fund is sponsored by Wisdomtree. It has amassed assets over $1.88 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
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Operating expenses on an annual basis are 0.58% for HEDJ, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 1.54%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that 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 Asml Holding Nv (ASMLO).
Its top 10 holdings account for approximately 139.13% of HEDJ's total assets under management.
Performance and Risk
The ETF has added roughly 6.13% and is up roughly 16.54% so far this year and in the past one year (as of 02/23/2026), respectively. HEDJ has traded between $41.90 and $56.31 during this last 52-week period.
The ETF has a beta of 0.78 and standard deviation of 14.90% for the trailing three-year period, making it a medium risk choice in the space. With about 138 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 $10.09 billion in assets, Vanguard FTSE Europe ETF has $32.01 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.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
WisdomTree Europe Hedged Equity ETF (HEDJ): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
