WisdomTree’s Japanese hedged equity ETF surges past $2 billion in assets

Jan 22nd, 2013 | By | Category: ETF and Index News

WisdomTree, a US-based sponsor of exchange-traded funds (ETFs), has revealed that the NYSE Arca-listed WisdomTree Japan Hedged Equity ETF (DXJ) has surpassed $2 billion in assets, more than doubling its assets in just under a month.

WisdomTree’s Japanese hedged equity ETF surges past $2 billion in assets

The WisdomTree Japan Hedged Equity ETF has surged past $2bn in assets, more than doubling in size in less than a month.

We published an article on currency-hedged Japanese equity ETFs earlier this month in which we made a case for investing in Japanese ETFs that hedged the USD/JPY exchange rate. The article highlighted the WisdomTree fund [see Dollar-hedged ETFs outperform in land of weakening yen].

Understandably popular with investors, the fund is designed to offer broad exposure to the Japanese equity market – with a tilt toward the exporters, who may stand to benefit from a depreciating yen – while hedging the currency fluctuations between the value of the Japanese yen to the US dollar.

Commenting on the milestone, Jeremy Schwartz, WisdomTree Director of Research, said: “Newly elected Prime Minister Shinzo Abe has been very effective through his plans and aggressive rhetoric to weaken the yen, and as a result, there has already been improved market sentiment in the world’s third largest economy.”

He added: “I believe DXJ offers the best tactical tool for gaining access to a country that possesses a strong negative correlation, or relationship, between its currency and its equity markets. DXJ attempts to remove one element of risk – fluctuations of the yen’s exchange rate versus the US dollar – from the equation, thus, creating the potential for a strategic place in an investor’s portfolio should the yen further weaken or even stabilise in value over the long term.”

As an alternative to the WisdomTree fund, investors could consider the db-X MSCI Japan Currency-Hedged Equity ETF (DBJP) from Deutsche Bank. This fund, which is also listed on the NYSE Arca, provides access to the MSCI Japan Index while at the same time mitigating exposure to fluctuations in the exchange rate.

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