WisdomTree Launches Hedged Dividend Growth ETF On Japan

This makes the launch well timed. However, while policy easing is inflating Japanese stock prices; it is weighing on the value of yen. This is especially true given the strength in the greenback.  Thus the product has adopted a currency hedging technique to ward off the sluggishness of Japanese currency and safeguard investors’ return from currency risk (read: Currency Hedged ETFs Top Q1 Asset Flows).

ETF Competition

Focus on dividends and hedging technique in the Japan equities ETF space is no longer a fresh idea as the space already has some popular ETFs including MSCI Japan Hedged Equity Fund (DBJP), Japan Hedged Equity Fund (DXJ) from WisdomTree and Currency Hedged MSCI Japan ETF (HEWJ) (read: Top Ranked Currency Hedged ETFs in Focus on Dollar Surge).

However, what makes JHDG unique is its combination of growth and value factors.  Given the attention to earnings growth, ROA and ROE, it would result in a more growth-oriented dividend portfolio as opposed to several other dividend funds which mainly revolve around value factors.

DBJP currently yields 9.21% (as of April 16, 2015) while DXJ and DXJS yield a respective of 1.67% and 1.05%. The underlying index of JHDG, WisdomTree Japan Hedged Dividend Growth Index, yields 2% in dividend, as per the issuer.

Moreover, its ROE and ROA also appear to be the highest in comparison to some equivalent indices. JHDG also charges less than the above-mentioned ETFs. From that point of view, JHDG should emerge triumphant and face no hurdle in garnering investor interest, going forward.  

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