WisdomTree Japan Hedged Equity ETF’s management team is just average, but a solid investment process still helps this strategy retain its Morningstar Medalist Rating of Bronze. The portfolio maintains a sizable cost advantage over competitors, priced within the second-cheapest fee quintile among peers.  

 The strategy's effective investment philosophy supports an Above Average Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained a significant overweight position in yield exposure and an underweight in volatility exposure compared with category peers. High yield exposure is attributed to holding high dividend-paying or buyback stocks, and is suitable for income seekers outside of fixed-income. And low volatility exposure is rooted in stocks that have a lower standard deviation of returns. The equity team managing the passive strategy earns the strategy an Average People Pillar rating. The strategy's parent organization still has a way to go to reach the industry standard, evidenced by a lack of inside investments from portfolio managers and a cohort of unseasoned portfolio managers. As a result, the firm obtains a Below Average Parent Pillar rating.

Analyst Rating

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 Japan Hedged Equity Fund earns an Above Average Process Pillar rating. 

The most notable contributor to the rating is that this fund tracks an index. Historical data, like 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 supports the rating. 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. 

 This strategy skews toward larger, more value-oriented companies compared with its average peer in the Japan Stock Morningstar Category. Analyzing additional factors, this strategy has continually displayed high-yield exposure compared with Morningstar Category peers during recent years, holding more companies returning cash to shareholders via dividends or buybacks. High-yield stocks tend to be connected to more mature companies earning enough cash to return some to shareholders. At times, however, extreme market pressure can force them to cut their dividends, which hurts stock performance. In recent months, the strategy was more exposed to the Yield factor compared with its Morningstar Category peers as well. The managers have also shown an underweight risk tilt, demonstrated by lower volatility exposure over peers in recent years. These low-risk stocks are typically at their best when markets are not. Low volatility exposure contributes to limited loss on the downside at the cost of a lag in bull markets. Similarly, in recent months, the strategy also had less exposure to the Volatility factor than peers. In addition, this strategy has not maintained a defensive tilt, demonstrated by low exposure to the quality factor. This means the fund avoids holding firms that are consistently profitable, growing, and have solid balance sheets.  Lacking this ballast, the fund's prospects will rest on its ability to supersede peers during economic booms. In this month, however, the strategy had more exposure to the Quality factor 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 basic materials and industrials relative to the category average by 3.7 and 3.1 percentage points, respectively. The sectors with low exposure compared to category peers are technology and communication services, underweight the average by 4.1 and 3.2 percentage points of assets, respectively. The portfolio is positioned across 434 holdings and is quite concentrated. Specifically, 30.6% of the portfolio's assets are housed within the top 10 holdings, versus the category’s 24.8% average. And in closing, in terms of portfolio turnover, this portfolio's holdings turn over more often than comparable products in its peer group, possibly resulting in higher costs for investors and a drag on performance.

Above Average

Process

WisdomTree’s equity team is valuable but does not stand out as one of the industry's best, warranting an Average People Pillar rating. There’s a sizable bench of five managers listed on the fund.  Together, they manage a total of 115 strategies, with a Bronze asset-weighted average Morningstar Medalist Rating, demonstrating their potential 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 an exchange-traded fund provider whose proprietary indexes underpin many of its funds. After the firm's core lineup of fundamentally weighted funds lost its luster in a difficult value environment, WisdomTree faces an identity crisis.

WisdomTree has plugged the holes in its value-oriented lineup with trendy thematic funds. Offerings that aim to capitalize on hot topics like cloud computing and genetic advancement fall outside the firm's realm of expertise and look like Band-Aids to curb outflows, not well-vetted long-term investments. Predictably, this point-and-shoot product-development approach had led WisdomTree to shut down funds at a lofty rate.

Bucking an industrywide, investor-friendly trend, WisdomTree has modestly trimmed fees on just a handful of funds. Such stubbornness calls into question whether the publicly traded firm prioritizes fundholders' or shareholders' interests. Recent inflows have helped, but severe outflows over the late 2010s have weakened the firm's financial position over the past several years.

The firm's research organization remains a highlight. Despite scattershot product launches, the team has demonstrated the ability to also hatch economically sound ideas and develop them into practicable products, like its funds that mechanically exclude state-owned enterprises. 

WisdomTree's commitment to investor education is another plus. Its Advisor Solutions platform, launched in 2016, provides advisors with a wealth of resources, and recent partnerships with Onramp Invest and Gemini should help advisors navigate cryptocurrency complexity. WisdomTree can read its clients' needs, but its trendy fund lineup shows that it's too willing to cater to their wants. It retains its Below Average rating.

Below Average

Parent

WisdomTree Japan Hedged Equity Fund

DXJ tracks an exporter-focused, dividend-weighted index of Japanese stocks. The fund is hedged for currency fluctuations between the USD and JPY.

iShares MSCI Japan ETF

As the Bank of Japan maintains its ultra-low interest rate policy, investors who are looking into Japanese equity markets should consider a currency-hedged country-specific exchange traded fund. The CurrencyShares Japanese Yen Trust (NYSEArca: FXY), which tracks the yen against the U.S. dollar, fell 2.0% on Thursday.

Currency-Hedged Japan ETFs Rally as Yen Dips to 20-Year Lows

The Japanese yen has weakened substantially in recent weeks, creating an opportunity for investors seeking to capture the performance and growth that the Japanese economy traditionally enjoys in a weakening yen environment. At a time when U.S. investors are facing a rising rate environment that is heavily impacting bonds, Japan is maintaining its practice of [.

Why You Should Consider Investment in Japan with DXJ

Japanese stocks have long been hailed as less expensive than their U.S. counterparts, and while that hasn't been enough to lure many U.S. investors to stocks in Asia's second-largest economy, the worm could be turning in favor of Japanese equities. In fact, a case can be made that the stars are aligning for the WisdomTree [.

Dip Into DXJ for Japan's Dividend, Value Proposition

The U.S. dollar recently hit a 20-year high against the Japanese yen, and that's good news for Japanese exporters, but not all exchange traded funds tracking Japanese stocks are adequately levered to that theme. Suggesting that currency hedging can work, the WisdomTree Japan Hedged Equity Fund (NYSEArca: DXJ) is higher by 2.49% year-to-date, while the unhedged [.

Dividend Growth, Weak Yen Boost Case for This Japan ETF

Xtrackers MSCI EAFE Hedged Equity ETF

WisdomTree Europe Hedged Equity Fund

iShares Currency Hedged MSCI EAFE ETF

iShares Russell 2000 ETF

SPDR S&P 500 ETF Trust

WisdomTree Bloomberg US Dollar Bullish Fund

Invesco DB US Dollar Index Bullish Fund

Rising interest rates have pushed investors into the dollar this year.

Dollar ETFs Among The Rare Winners From Rising Rates

Currency-hedged Japan country-related exchange traded funds could continue to be a better way to access the Japanese markets as the yen currency depreciates in the face of a loose monetary policy outlook. The currency-hedged WisdomTree Japan Hedged Equity Fund (NYSEArca: DXJ), which hedges against the negative effects of a depreciating yen currency relative to the [.

Use a Currency-Hedged ETF to Target Japan as the BOJ Maintains Loose Policies

Invesco Currencyshares Japanese Yen Trust

Japan currency-hedged exchange traded funds are rallying as the yen currency slips to its lowest level since 2015. The CurrencyShares Japanese Yen Trust (NYSEArca: FXY), which tracks the yen against the U.S. dollar, fell 1.0% on Monday and declined 5.9% in March.

Japan Currency-Hedged ETFs Have Been Rallying With Yen at Its Weakest Since 2015

The investment company nominated three candidates to WisdomTree's board.

ETFS Capital Responds To WisdomTree 'Poison Pill' With Scathing Letter

Warren Buffett's Berkshire Hathaway delivered fourth-quarter results over the weekend, and with that, the conglomerate included Buffett's always highly anticipated letter to shareholders. That letter updates investors on Berkshire's equity holdings.

Bet on Buffett With This Japan ETF

WisdomTree Emerging Markets SmallCap Dividend Fund

WisdomTree Global ex-U.S. Quality Dividend Growth Fund

WisdomTree International Quality Dividend Growth Fund

WisdomTree 90/60 US Balanced Fund

With money flowing and pivoting within markets as volatility continued in January, many investors sought hedges, havens, and diversification with their investments. The following are the top five ETFs by flows for WisdomTree in the month of January.

The Top 5 Performing WisdomTree ETFs in January

JPMorgan BetaBuilders Japan ETF

Xtrackers MSCI Japan Hedged Equity ETF

WisdomTree Japan SmallCap Dividend Fund

WisdomTree Japan Hedged SmallCap Equity Fund

iShares MSCI Australia ETF

iShares MSCI Japan Equal Weighted ETF

iShares MSCI Japan Value ETF

First Trust Japan AlphaDEX Fund

Franklin FTSE Australia ETF

Franklin FTSE Japan Hedged ETF

Franklin FTSE Japan ETF

Goldman Sachs ActiveBeta Japan Equity ETF

iShares Currency Hedged MSCI Japan ETF

iShs Crr Hg JPX Shs

Xtrackers Japan JPX-Nikkei 400 Equity ETF

iShares JPX-Nikkei 400 ETF

iShares MSCI Japan Small-Cap ETF

Japan And Australia Enter Third Economic Downturns As Omicron Wave Hits

Inflation isn't a topic confined to 2021. It's front and center to start 2022 and could remain that way for several months.

Inflation Predictions Indicate That Japan ETFs Could Be 2022 Winners

Upcoming rate hikes could drive an increase in hedging costs for Japanese investors, redirecting flows into unconventional assets and regions. Hedged yield pickup is naturally governed by the relationship of the spot and forward FX rates, which in turn are driven primarily by short-term interest rates.

Japan's Search For Surplus Yield

Japanese stocks are trailing U.S. rivals this year, with some of that laggard status attributable to a slower roll-out of coronavirus vaccines in Japan. Still, the WisdomTree Japan Hedged Equity Fund (NYSEArca: DXJ) ranks as one of the more solid developed markets single-country exchange traded funds this year.

Japan's Catch-Up Story Is a 2022 Theme to Monitor

The dollar is one of the best-performing major currencies in the world this year. The opposite is true of the Japanese yen, which is off more than 9% against the greenback year-to-date.

This ETF Shows Promise for Japanese Stocks in 2022

Some banks and research firms are growing bullish on Japanese stocks, and that could signal opportunities with exchange traded funds such as the WisdomTree Japan Hedged Equity Fund (NYSEArca: DXJ). The currency-hedged exchange traded fund is up 17.31% year-to-date, beating the MSCI EAFE Index by nearly 600 basis points.

Reasons Mount to Be Bullish on Japan ETFs

Xtrackers Harvest CSI 300 China A-Shares ETF

ProShares UltraShort MSCI Brazil Capped

Direxion Daily CSI 300 China A Share Bull 2X Shares

Global X China Financials ETF

Morgan Stanley Exch Traded Nts 2008-31.3.20 Ser-F Linked to S&P Chinese Renminbi TR Ind

Global X Copper Miners ETF

Invesco DB Commodity Index Tracking Fund

Direxion Daily S&P Oil & Gas Exp. & Prod. Bear 2X Shares

ProShares UltraShort Oil & Gas

Direxion Daily Emerging Markets Bear 3X Shares

iShares MSCI Emerging Markets ETF

PrShrs Trust II Shs Proshares Short Euro

ProShares Short MSCI Emerging Markets

ProShares UltraShort Euro

iShares MSCI Brazil ETF

Invesco CurrencyShares Euro Trust

iShares China Large-Cap ETF

ProShares UltraShort FTSE China 50

VanEck Vectors Gold Miners ETF

VanEck Junior Gold Miners ETF

SPDR Gold Trust

ProShares UltraShort Gold

iShares iBoxx High Yield Corporate Bond ETF

iShares 7-10 Year Treasury Bond ETF

iShares Europe ETF

iShares MSCI India ETF

Direxion Daily Junior Gold Miners Index Bear 2X Shares

Global X Lithium & Battery Tech ETF

iShares MSCI China ETF

ProShares UltraShort 7-10 Year Treasury

Invesco QQQ

VanEck Vectors Russia ETF

ProShares UltraShort Bloomberg Crude Oil

iShares Silver Trust

ProShares UltraPro Short S&P500

ProShares UltraPro Short QQQ

ProShares UltraShort 20+ Year Treasury

ProShares Short 7-10 Year Treasury

Direxion Daily Technology Bull 3x Shares

Direxion Daily Technology Bear 3X Shares

iShares 20+ Year Treasury Bond ETF

Direxion Daily 7-10 Year Treasury Bear 3x Shares

ProShares Ultra Euro

United States Oil Fund LP

ProShares Ultra VIX Short-Term Futures ETF

Vanguard S&P 500 ETF

Vanguard FTSE Emerging Markets ETF

iShares Global Timber & Forestry ETF

Energy Select Sector SPDR Fund

Financial Select Sector SPDR Fund

SPDR S&P Metals & Mining ETF

Direxion Daily FTSE China Bear 3X Shares

Direxion Daily FTSE China Bull 3X Shares

ProShares UltraShort Silver

In the latest World Economic Outlook Report, the IMF said "the dangerous divergence in economic prospects across countries remains a major concern". While the IMF focused on the "vaccine divide" between developed and developing nations, there are other divergences at play.

'Dangerous Divergences'

It's the moment Japanese equity longs have been waiting for: Friday's re-test of nearly 2-year-old resistance in the ¥113 area on JPYUSD (the Japanese yen to U.S. dollar exchange rate). Japan also has some headlines making the rounds that could get investment juices flowing.

Japan's Export Machine Needed That Yen Break

ProShares UltraShort MSCI Japan

ProShares Ultra MSCI Japan

Aberdeen Japan Equity Fund Inc

SPDR Solactive Japan ETF

After underperforming earlier in the year, Japanese equities started rising in late August and should maintain strong momentum in the coming months. The Japanese economy's growth in the recovery quarter, Q2, was solid; and the full-year growth rate for 2021 is projected at 2.4%.

Japanese Equities Continuing Recent Outperformance

iShares JP Morgan USD Emerging Markets Bond ETF

iShares Russell 2000 Growth ETF

Invesco DB US Dollar Index Bearish Fund

The U.S. dollar strengthened to a two-week high lately versus a basket of major currencies on the Fed taper bet.

U.S. Dollar to Gain Ahead? ETFs to Gain/Lose

Coronavirus vaccinations are finally taking off in Japan as the world's third-largest economy looks to play catch-up with the U.S. on that metric. That could be a plus for the WisdomTree Japan Hedged Equity Fund (NYSEArca: DXJ).

It Could Be Japan's Time to Shine

After a disappointing start to its vaccine rollout, Japan got on its feet in August, vaccinating as many as 1.58% of the population per day at the peak of the campaign. Another initiative that may help Japan's stock market is a new requirement to publish disclosure materials in English.

After Covid: Japan's Catch-Up

WisdomTree Dynamic Currency Hedged International Equity Fund

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?

VanEck Vectors Africa Index ETF

iShares Asia 50 ETF

First Trust Latin America AlphaDEX Fund

SPDR S&P Midcap 400 ETF Trust

Vanguard FTSE Europe ETF

If you're looking to build a truly global portfolio of investments, these seven ETFs will get the job done without spending too much on fees. The post 7 Best ETFs to Buy for a Truly Global Portfolio appeared first on InvestorPlace.

7 Best ETFs to Buy for a Truly Global Portfolio

In the seven years leading up to the Games, millions of jobs are created to meet the demand in labor needed to pull off hosting the Olympics. The confluence of heavy media coverage and no fans has never happened for the Olympics.

Olympic Economics In A COVID-19 World

News for WisdomTree Japan Hedged Equity Fund ETF (DXJ)