4 days ago
Is WisdomTree Japan Hedged Equity ETF (DXJ) a Strong ETF Right Now?
Launched on 06/16/2006, the WisdomTree Japan Hedged Equity ETF (DXJ) is a smart beta exchange traded fund offering broad exposure to the Asia-Pacific (Developed) ETFs category of the market.
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
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.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
DXJ is managed by Wisdomtree, and this fund has amassed over $3.44 billion, which makes it one of the larger ETFs in the Asia-Pacific (Developed) ETFs. Before fees and expenses, DXJ seeks to match the performance of the WisdomTree Japan Hedged Equity Index.
The WisdomTree Japan Hedged Equity Index is designed to provide exposure to Japanese equity markets while at the same time neutralizing exposure to fluctuations of the Japanese Yen movements relative to the U.S. dollar.
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.
Annual operating expenses for DXJ are 0.48%, which makes it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 3.11%.
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, Toyota Motor Corp accounts for about 5.21% of the fund's total assets, followed by Mitsubishi Ufj Financial Group and Japan Tobacco Inc.
Its top 10 holdings account for approximately 31.15% of DXJ's total assets under management.
So far this year, DXJ has added about 3.07%, and was up about 7.13% in the last one year (as of 06/02/2025). During this past 52-week period, the fund has traded between $91.43 and $117.51.
The fund has a beta of 0.41 and standard deviation of 19.48% for the trailing three-year period, which makes DXJ a medium risk choice in this particular space. With about 448 holdings, it effectively diversifies company-specific risk.
WisdomTree Japan Hedged Equity 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 $13.02 billion in assets, iShares MSCI Japan ETF has $15.03 billion. BBJP has an expense ratio of 0.19% and EWJ charges 0.50%.
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.
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 Japan Hedged Equity ETF (DXJ): ETF Research Reports
iShares MSCI Japan ETF (EWJ): ETF Research Reports
JPMorgan BetaBuilders Japan ETF (BBJP): ETF Research Reports
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