WisdomTree International Hedged Equity ETF to Trim Euro Exposure
The WisdomTree International Hedged Equity Fund (NYSE: HEDJ) will begin trading in its new form after the close of business on August 29 and will be renamed the WisdomTree Europe Hedged Equity Fund. HEDJ will remain the fund's ticker.
Earlier this month, WisdomTree Research Director Jeremy Schwartz announced the restructuring for HEDJ as means of reducing the ETF's exposure to the faltering euro and controversial European financial services company.
The new version of HEDJ will focus on export-driven European-based firms that pay dividends. Previously, the Fund provided exposure to equities across Europe, Australia and the Far East, while neutralizing the multiple currency movements in these regions versus the dollar, according to a statement issued by WisdomTree.
"Concerns over the future of the euro may cause investors to reevaluate their exposure to Europe, though current valuations for European stocks remain compelling based on historically low P/E ratios1 and high dividend yield differentials compared to the U.S.," Luciano Siracusano, WisdomTree Chief Investment Strategist, said in the statement.
"In fact, even in a declining euro environment, we believe many global companies headquartered in Europe will continue to be competitive and have the potential to generate substantial profits. By providing exposure to European stocks while neutralizing the downside for U.S. investors that would be inflicted by a weakening euro, we believe HEDJ can present a precise and thoughtful alternative to un-hedged portfolios of European stocks."
Financials are currently HEDJ's largest sector weight at almost 22 percent. The ETF, which debuted in late 2009, has $15.1 million in assets under management and charges an annual expense ratio of 0.58 percent. HEDJ has a 30-day SEC yield of 4.13 percent.
WisdomTree also sponsors the popular WisdomTree Japan Hedged Equity Fund (NYSE: DXJ), which hedges exposure to the dollar/yen currency pair. DXJ has $598.4 million in AUM.
For more on HEDJ's restructuring, click here.
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