WisdomTree unveils currency-hedged Japanese equity sector ETFs

Apr 17th, 2014 | By | Category: Equities

WisdomTree, a leading provider of exchange-traded funds, has unveiled a suite of ETFs designed to provide exposure to various sectors of the Japanese equity market while hedging the dollar/yen exchange rate.

WisdomTree unveils currency-hedged Japanese equity sector ETFs

WisdomTree has unveiled a suite of dollar/yen hedged Japanese equity sector ETFs on the NYSE Arca.

The funds, listed on the NYSE Arca, have been launched to enable investors to better to capitalise on three investment themes identified by WisdomTree’s research team.

The themes stem from ‘Abenomics’ – namely the economic policies advocated by Shinzō Abe, prime minister of Japan since his election in December 2012. The polices are based upon “three arrows” of fiscal stimulus, monetary easing and structural reforms

Jeremy Schwartz, WisdomTree’s Director of Research, said: “Since the election of Japan Prime Minister Shinzo Abe over a year ago, there has been a great deal of excitement surrounding Abenomics and the policies designed to restore and reinvigorate economic growth in Japan. As Abe continues to make progress on his third arrow – structural economic reform designed to put Japan on a better growth trajectory – there will likely be a continual evaluation of the stocks and sectors most primed to benefit from new government initiatives. While broad-based approaches should continue to serve many investors well, we believe there is an additional opportunity for more finely tailored tools to access and leverage the evolution of Abenomics.”

The themes identified by WisdomTree and their associated new funds are:

  • Reflation
    A critical component of Abenomics involves the reflation of financial assets. The Bank of Japan itself has stated its goal to suppress risk premiums of owning equities by expanding its balance sheet to purchase ETFs and make direct investments into real estate investment trusts. The Japanese financial sector and real estate-related companies are therefore part of a theme many refer to as Japanese “reflation”.WisdomTree Japan Hedged Financials ETF (DXJF)
    WisdomTree Japan Hedged Real Estate ETF (DXJR)
  • Abe Growth Strategy
    Abe has stated that health care is an important sector to contribute to Japan’s economic growth and that he wants to use it as part of his growth strategy. As technology companies should also receive a boost from new government initiatives supporting additional capital spending, we believe tech, media and telecom stocks are also poised to be beneficiaries of Abenomics growth strategies.

    WisdomTree Japan Hedged Health Care ETF (DXJH)
    WisdomTree Japan Hedged Tech, Media and Telecom ETF (DXJT)
  • Yen sensitivity
    The capital goods sector, which among other industries includes more than a 45% weight in automobile companies and related suppliers, typically includes some of the most export-oriented stocks. These stocks are often very sensitive to changing exchange rates – so if yen continues its slide, these stocks could benefit.WisdomTree Japan Hedged Capital Goods ETF (DXJC)

Each fund has a net expense ratio of 0.43%.

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