WisdomTree Expands International Dividend ETF Lineup

The theme of hedging currency risk in the same wrapper as a basket of international stocks is one that WisdomTree has exploited to the fullest.    

Their wildly successful WisdomTree Europe Hedged Equity Fund (HEDJ) and WisdomTree Japan Hedged Equity Fund (DXJ) have a combined $36.88 billion in total assets as a result of weakening foreign currency trends over the last 18 months.  These funds have allowed investors to step outside traditional international stock index strategies and take advantage of what could be a significant driver of excess returns.

To follow up on the popularity of this trend, WisdomTree recently introduced a new fund designed to capitalize on a broad-basket of dividend paying stocks with the same currency awareness as HEDJ and DXJ. 

The WisdomTree International Hedged Equity Fund (HDWM) is a fundamentally weighted ETF that selects companies outside the U.S. and Canada with a history of declaring dividends to shareholders.  In its debut, this ETF has well over 700 individual stocks of both developed and emerging market countries, alongside short positions in 11 different currencies. 

According to the index constraints, components in HDWM are weighted according to annual cash dividends paid to shareholders.  The top three countries that make up this ETF include: the United Kingdom, Japan, and France. 

Jeremy Schwartz, WisdomTree Director of Research, noted that “Income generating strategies are critical for many investors, and we believe investments like HDWM, are attractive ways to generate income, especially in a low-yielding, low-return environment characterized by volatility and uncertainty.” 

It’s also worth noting that HDWM has priced itself at the low end of the expense ratio spectrum with a management fee of just 0.35 percent.  HEDJ and DXJ charge expense ratios of 0.58 and 0.48 percent respectively. 

This low-cost, combined with stalwart overseas income stocks such as HSBC Holdings PLC (HSBC) and Novartis AG (NVS), makes HDWM a solid candidate for ETF investors to consider when evaluating their international exposure.