Daily ETF Watch: ‘HEDJ’ Now Top Hedge

WisdomTree’s currency-hedged Europe ETF edges out the company’s Japan-focused currency-hedged blockbuster.

Reviewed by: Heather Bell
Edited by: Heather Bell

There’s been a shift in the currency-hedged space. WisdomTree really kicked off the whole currency hedging wave when it redesigned its dividend-weighted Japan fund into a product designed to take maximum advantage of the weakening yen by adding a screen for export-focused companies.


The WisdomTree Japan Hedged Equity Fund (DXJ | B-70) then went on a bit of an asset-gathering rampage over the next couple of years, ballooning to more than $15 billion. But its sister fund targeting the eurozone, the WisdomTree Europe Hedged Equity Fund (HEDJ | B-61), has also been on a tear as the euro has weakened alongside the yen. And on Monday, March 16, it surpassed DXJ in terms of assets under management (AUM), racking up $15.7 billion to DXJ’s $15.5 billion:


YTD Assets & Flows, DXJ Vs. HEDJ

Source: Bloomberg


If one looks even further back to the start of the year, HEDJ’s daily inflows have been nothing but impressive. While DXJ started off the year with only about $12 billion in AUM, and has slowly added a few more billion, HEDJ was at less than $6 billion in AUM as of the first of the year. Its total inflows for 2015 were $8.7 billion versus $2.3 billion for DXJ.


WisdomTree holds the by-far dominant position in the currency-hedged equity space. HEDJ’s and DXJ’s closest competitor is the Deutsche X-trackers MSCI EAFE Hedged Equity ETF (DBEF | B-79), which has just $6.1 billion in AUM.


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 graduate of Dartmouth college and resides in the Denver area with her two dogs.