Daily ETF Watch: New Dividend ETFs Planned
WisdomTree’s latest dividend-focused ETFs, including one with a currency hedge, are just around the corner.
WisdomTree’s latest dividend-focused ETFs, including one with a currency hedge, are just around the corner.
WisdomTree’s latest dividend-focused ETFs, including one with a currency hedge, are just around the corner.
WisdomTree is expanding its family of dividend-focused ETFs by filing updated regulatory paperwork for two funds: the WisdomTree Europe Dividend Growth Fund (EUDG) and the WisdomTree International Hedged Dividend Growth (IHDG). The ETFs target non-U.S. firms with good dividend-growth prospects.
The new ETFs will combine two trends currently coursing throughout the ETF industry: dividend-paying stocks and currency hedging. The dividend growth aspect is in the context of persistent low interest rates, highlighted by the Federal Reserve’s ongoing bond-buying economic stimulus. Low bond yields have resulting in investors using dividend-paying equities as a yield-replacement strategy.
Currency-hedged ETFs are also currently hot because they’re designed to control portfolio volatility by removing the currency variable from a particular investment strategy.
For example, the db X-trackers MSCI Japan Hedged Equity Fund (DBJP | B-61) rose more than 50 percent last year, while the nonhedged iShares MSCI Japan ETF (EWJ | B-96) gained just 26 percent—a difference based solely on the yen’s slide against the dollar, as both funds hold the same stocks.
The WisdomTree Europe Dividend Growth Fund will track the WisdomTree Europe Dividend Growth Index, which will provide investors exposure to dividend-paying common stocks of companies listed in developed European countries such as United Kingdom, Switzerland and Germany, according to its regulatory filing.
EUDG, the Europe-focused dividend ETF, has an expense ratio of 0.58 percent, or $58 for every $10,000 invested.
IHDG will track the WisdomTree International Hedged Dividend Growth Index, which comprises 300 dividend-paying companies in developed European countries such as Austria, France and Germany, and Pacific Rim countries such as Japan, Australia and New Zealand, according to its regulatory filing.
IHDG, too, has an expense ratio of 0.58 percent, or $58 for every $10,000 invested.
ETF Gets New Name
On May 1, the Market Vectors RVE Hard Assets Producers ETF (HAP | B-81) changed its name to the Market Vectors Natural Resources ETF, following the rebranding of the fund’s benchmark index from the Rogers-Van Eck Hard Assets Producers Index to the Rogers-Van Eck Natural Resources Index.
The index’s methodology and underlying constituents remain unchanged, while the rebranding effort better aligns the index with the industry segment it seeks to represent, according to Market Vectors.
The Rogers-Van Eck Natural Resources Index comprises companies that are principally engaged in the production and distribution of commodities and commodity-related products and services in agriculture, energy, precious metals, base and industrial metals, alternatives and forest products.
