WisdomTree Newly Launched ETF Hedges Against Currency Exposure
In an interview with MarketWatch, the Investment manager of WisdomTree hoped that the recently launched exchange traded fund (ETF), WisdomTree International Hedged Equity Fund (NYSE: HEDJ), will be more acceptable by investors who are nervous about the prospects of a strengthening dollar in 2010. The distinctive feature of HEDJ is that it hedges against currency exposure. WisdomTree Chief Operating Officer Bruce Lavine said that although there are over 250 international-stock ETFs in the market, all have exposure to foreign currency.
The underlying holdings in HEDJ are other ETFs managed by WisdomTree, making it an ETF of ETFs. HEDJ currently invests in WisdomTree Europe Total Dividend Fund (NYSE: DEB), WisdomTree Japan Total Dividend Fund (NYSE: DXJ) and WisdomTree Pacific ex-Japan Total Dividend Fund (NYSE: DND). The expense ratio of HEDJ is 0.58%, which includes the fees of the fund's underlying ETFs.
The ETF's tracking index is an in-house benchmark called the WisdomTree DEFA International Hedged Equity Index. The prospectus indicates that the fund holds forward currency contracts or futures contracts designed to offset its exposure to non-US currencies.
