##  [# Daily ETF Watch: New Breed Of Hedged Funds](/sections/daily-etf-watch/daily-etf-watch-new-breed-hedged-funds) 

 

# Daily ETF Watch: New Breed Of Hedged Funds

 

 

iShares and WisdomTree are launching next-generation currency-hedged ETFs.



 

 

 

 

 [![HeatherBell_green_bg](/sites/default/files/styles/author_image_icon/public/2023-03/heather2.png?itok=5J9vBlda)](/contributors/heather-bell) 

[By Heather Bell](/contributors/heather-bell)

 Jan 07, 2016

 Edited by: Heather Bell

 

 

     Share  <a class="a2a a2a_button_email"> Email </a><a class="a2a a2a_button_linkedin"> LinkedIn </a><a class="a2a a2a_button_facebook"> Facebook </a><a class="a2a a2a_button_x"> X (Twitter) </a> 

 

 

 

 

 

 

 

 

  
            googletag.cmd.push(function() {
                googletag.display('js-dfp-tag-article_page_302x26');
            });
    
    

 

 

  

 



 

 

  Loading 

 

 



 

 

Today iShares and WisdomTree are each rolling out lineups of currency-hedged ETFs on the BATS exchange for which the hedges will be adjusted to respond to market conditions.

The three iShares funds, their tickers and expense ratios are as follows:

- [iShares Adaptive Currency Hedged MSCI Japan ETF (DEWJ)](https://www.sec.gov/Archives/edgar/data/1100663/000119312516422221/d94445d497k.htm), 0.47%
- [iShares Adaptive Currency Hedged MSCI Eurozone ETF (DEZU)](https://www.sec.gov/Archives/edgar/data/1100663/000119312516422224/d112784d497k.htm), 0.50%
- [iShares Adaptive Currency Hedged MSCI EAFE ETF (DEFA)](https://www.sec.gov/Archives/edgar/data/1100663/000119312516422228/d113988d497k.htm), 0.35%

On a monthly basis, the iShares ETFs will use what the prospectuses term a "hedge ratio" to determine how much of a currency hedge they will each maintain. The hedge ratio is based on four equally weighted criteria: value, momentum, carry and volatility. A fund can be 0% hedged, 25% hedged, 50% hedged or 100% hedged.

Meanwhile, the four WisdomTree funds, their tickers and expense ratios are as follows:

- [WisdomTree Dynamic Currency Hedged Europe Equity Fund (DDEZ),](https://www.sec.gov/Archives/edgar/data/1350487/000119312516421059/d106425d497k.htm) 0.43%
- [WisdomTree Dynamic Currency Hedged Japan Equity Fund (DDJP)](https://www.sec.gov/Archives/edgar/data/1350487/000119312516421056/d106428d497k.htm), 0.43%
- [WisdomTree Dynamic Currency Hedged International Equity Fund (DDWM)](https://www.sec.gov/Archives/edgar/data/1350487/000119312516421050/d106426d497k.htm), 0.35%
- [WisdomTree Dynamic Currency Hedged International SmallCap Equity Fund (DDLS)](https://www.sec.gov/Archives/edgar/data/1350487/000119312516421042/d106420d497k.htm), 0.43%

The WisdomTree ETFs provide a more precise degree of currency hedging than the iShares funds. Although the hedging methodology only relies on three criteria—interest rate differentials, momentum and value—the hedges can range anywhere from 0% to 100%. As with the iShares ETFs, the degree to which each fund is hedged is recalculated on a monthly basis.

Beyond having somewhat different hedging methodologies, the two fund families track different types of indexes. The iShares ETFs are tied to benchmarks weighted by market capitalization, whereas the WisdomTree ETFs’ indexes are weighted by dividends. However, both families of funds have a similar range of expense ratios, with the iShares funds skewing slightly more expensive.

---

*Contact Heather Bell at <hbell@etf.com>.*



 

 

 [ Heather Bell ](/contributors/heather-bell) 

 

 

  Heather Bell is a former managing editor of etf.com. She has also held editorial positions at Dow Jones Indexes and Lehman Brothers. Bell is a…   [View Bio](/contributors/heather-bell)

 



 

 


 Related Topics  [Currency Hedged](http://www.etf.com/topics/currency-hedged) 

 [Dividend](http://www.etf.com/topics/dividend)