WisdomTree Dynamic Ccy Hdgd Intl Eq ETF’s management team is rated Average, but a solid investment process still helps this strategy retain its Morningstar Medalist Rating of Gold. The portfolio maintains a sizable cost advantage over competitors, priced within the lowest fee quintile among peers.  

 The strategy's effective investment philosophy supports a High Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained a significant underweight position in liquidity exposure and an overweight in quality exposure compared with category peers. Low liquidity risk exposure is attributed to stocks with a low trading volume, limiting managers' flexibility. And a high quality exposure is rooted in holding stocks with low financial leverage and strong returns on equity. The strategy’s management team earns an Average People Pillar rating. The strategy's parent organization earns the firm a Below Average Parent Pillar rating. People Pillar and Parent Pillar ratings for this strategy are indirectly assigned by a Morningstar analyst rather than algorithmically derived. Please see the notes following each pillar section for more details. The details of assigning methods can be found in each pillar section.

Analyst Rating

TotalEnergies SE

Novan

National Energy Services Reunited

Shell PLC

Autoliv

SPDR Bloomberg Barclays Mortgage Backed Bond ETF

Moelis

AstraZeneca

Credit Suisse

Rogers

Morningstar's evaluation of this security's process aims to determine the likelihood that it will outperform its Morningstar Category benchmark on a risk-adjusted basis over the long term. WisdomTree Dynamic Ccy Hdgd Intl Eq Fd earns a High Process Pillar rating. 

The largest contributor to the rating is that this fund tracks an index. Historical data, such as Morningstar's Active/Passive Barometer, finds that passively managed funds have generally outperformed their active counterparts, especially over longer time horizons. Strong risk-adjusted performance also contributes to the process. This can be seen in the fund's five-year alpha calculated relative to the category index, which suggests that the managers have shown skill in their allocation of risk. The parent firm's excellent risk-adjusted performance, as shown by its average 10-year Morningstar Rating of 3.4 stars, contributes to the process as well.

 This strategy has tended to hold more growth stocks than others in the Foreign Large Value Morningstar Category. But in terms of market capitalization, it is on par with peers. Analyzing additional factors, this strategy continually held some stocks with low trading volume over the last few years. Less-liquid stocks might offer strong returns to compensate for their risks, but they can be harder and more expensive to trade in bear markets. In the latest month, the strategy was also less exposed to the Liquidity factor compared with Morningstar Category peers. This strategy also has had a position favoring high-quality stocks in recent years, which could contribute to higher downside risk protection. High exposure to the quality factor means holding companies that are consistently profitable, growing, and have solid balance sheets. Compared with category peers, the strategy also had more exposure to the Quality factor in the most recent month. In addition, this strategy has an underweight bias to the volatility factor, meaning investing in stocks that have a lower standard deviation of returns. These companies have historically been a valuable ballast to steady portfolio returns during market downturns. In recent months, the strategy also had less Volatility factor exposure than its peers. More information on a fund and its respective category's factor exposure can be found in the Factor Profile module within the Portfolio section. 

 The portfolio is overweight in financial services by 2.8 percentage points in terms of assets compared with the category average, and its consumer cyclical allocation is similar to the category. The sectors with low exposure compared to category peers are technology and basic materials, underweight the average by 3.6 and 3.1 percentage points of assets, respectively. The strategy owns 1,047 securities and is similarly diversified as peers, with 13.1% of portfolio assets concentrated within the top 10 holdings. And finally, in terms of portfolio turnover, on a year-over-year basis, 29% of the fund's holdings have changed, whether through increasing, decreasing, or changing a position.

High

Process

WisdomTree’s team is good but unexceptional, earning the strategy an Average People Pillar rating. There’s a deep bench of five managers listed on the fund. Together, they manage a total of 113 strategies, with solid long-term prospects. The strategies average a Bronze asset-weighted Morningstar Medalist Rating, indicating a position to deliver positive alpha relative to the category median in aggregate.  

 Note: This People Pillar rating is indirectly assigned by an analyst. Morningstar analysts evaluate the People Pillar for passive products at the brand level and may also differentiate by asset class. There is at least one other passive strategy at the firm that is covered by a Morningstar analyst, so the People Pillar rating of the fund is inherited from the rating that the Morningstar analyst assigned to investment vehicles under the same brand name.

Average

People

WisdomTree is improving, but its shaky global fund lineup and uncertain trajectory hold its rating to Below Average. 

WisdomTree’s research organization has long been a strength. Under CIO Jeremy Schwartz, the team has generated creative, economically sound ideas and evolved them into investable products, like the efficient core series. A recent focus on investor education spawned the Portfolio Analysis Tools Hub, an online platform that taps the team’s brainpower to help investors make better investment decisions.

The firm’s product lineup is a mixed bag. To complement its core lineup of fundamentally weighted strategies, WisdomTree has recently launched funds targeting established factors instead of trendy themes—an encouraging reorientation. Yet the shutdown of WisdomTree U.S. Growth and Momentum ETF calls WisdomTree’s commitment to these funds into question, and vestiges from its laxer product-development era look ripe for closure. Its European lineup features risky trading tools that are hard for investors to use well. 

WisdomTree’s future may hinge on WisdomTree Prime, its blockchain-based digital wallet. The launch reflects founder and CEO Jonathan Steinberg’s conviction in the disruptive potential of the blockchain. Prime shouldn’t hurt WisdomTree fund investors (most funds on the platform are zero-fee), but it may distract the firm from shoring up its core offering.

Below Average

Parent

WisdomTree Dynamic Currency Hedged International Equity Fund

DDWM tracks a dividend-weighted index of dividend-paying developed-market equities outside the US and Canada. The index dynamically hedges currency exposure for USD investors based on three equal-weighted signals.

WisdomTree Dynamic Currency Hedged International SmallCap Equity Fund

WisdomTree International SmallCap Dividend Fund

WisdomTree International Equity Fund

WisdomTree Japan Hedged Equity Fund

WisdomTree Emerging Markets Multifactor Fund

WisdomTree International Hedged Quality Dividend Growth Fund

WisdomTree International Multifactor Fund

By Liqian Ren, Director of Modern Alpha Key Takeaways Currency hedging is crucial for mitigating risks in global investing by managing foreign exchange fluctuations while preserving equity exposure. Our dynamic currency-hedged ETFs have proven to reduce portfolio risk through factor-based strategies.

Currency Hedging: A Tool to Reduce Risk

By Liqian Ren, Director of Modern Alpha The recent surge in the dollar, driven by geopolitical tensions and the unique role of the U.S. in international financial markets, has brought currency hedging into focus. Our strategic long-term orientation suggests that currency hedging should be a more frequent consideration when investing in foreign markets.

What Our Signals Say about U.S. Dollar Risk

VettaFi's vice chairman Tom Lydon discussed the WisdomTree Dynamic Currency Hedged International Equity Fund (DDWM) on this week's “ETF of the Week” podcast with Chuck Jaffe of “Money Life. Investors have been hesitant to put money in anything outside of the U.S.

ETF of the Week: WisdomTree Dynamic Currency Hedged International Equity Fund (DDWM)

WisdomTree Emerging Markets ex-State-Owned Enterprises Fund

WisdomTree China ex-State-Owned Enterprises Fund

Exchange traded fund investors should consider the benefits of currency hedging in international allocations to help access a “truer” exposure to foreign markets.

Smart ETF Strategies for International Market Exposure Today

WisdomTree Europe Hedged Equity Fund

International allocations face many headwinds in 2022, including a strong U.S. dollar and rising geopolitical tensions. However, many investors are doubling down on their risk by investing in unhedged strategies.

What's Your Strategy for International Allocations? Seeking Opportunities Against Geopolitical Risk and the Strong Dollar

Currency hedge value-add to returns was high over this period, but the risk reduction is what we would expect on a longer-run basis. The dynamic currency hedge contained in DDWM added almost 200 basis points per year over the last six years.

Managing Currency Risk In A Systematic Fashion

The Consumer Price Index came in higher than anticipated at 8.5% for March, and while stock markets in the U.S. initially rallied in the hopes that it might be the peak, many economists believe that inflation could remain substantial through the end of the year. The increases to consumer prices have happened at a rate [.

As U.S. Inflation Soars, Consider Dividends Overseas

WisdomTree International Quality Dividend Growth Fund

Things are starting to get interesting in the Eurozone with an upcoming European Central Bank (ECB) meeting and German elections on the docket. Both events have the potential to stir stocks in the region.

With Eurozone Equities Ready to Shine, Consider this Model Portfolio

Many equity-focused investors may not be aware of this, but the U.S. dollar is one of this year's best-performing currencies. In fact, the dollar is standing out against the backdrop of other traditional hedges (gold and some bonds) vexing investors.

Looking to Cash In on a Stronger U.S. Dollar?

Supported by a cyclical value rally on par with that of the U.S., European equities are among asset allocators' most preferred ideas for the second half of 2021. Indeed, valuations across the pond are attractive, but isolating specific European countries that offer investors the most upside can be tricky.

Looking for a Comprehensive Investing Strategy in Europe?

International equities, including ex-US developed markets fare, are expected to get their momentum back with Joe Biden in the White House. While there's only so much an American president can do to jolt overseas markets, advisors can position for an ex-US developed markets resurgence with WisdomTree's Developed International Model Portfolio.

News for WisdomTree Dynamic Currency Hedged International Equity Fund ETF (DDWM)