Currency ETFs

A Fund that Provides Exposure to the European Equity Market

The WisdomTree Europe Hedged Equity Fund (HEDJ) is an exchange-traded fund (ETF) that provides investors with exposure to the European equity market while also hedging against possible fluctuations between the dollar and the euro.

This exchange-traded fund is based off the WisdomTree Europe Hedged Equity Index, which tracks European dividend-paying companies in the WisdomTree International Equity Index, trades in euros, has at least a $1 billion market capitalization and derives at least 50% of its revenue in the latest fiscal year from countries outside of Europe. The presence of a currency hedge also matters because there could be large movements in the exchange rate between the U.S. dollar and the euro.

At a time when the Italian economy is in a recession, Spain is undergoing political turmoil regarding Catalonian independence and populist politicians and parties are gaining sway across the continent, prospective investors in the European economy need all the protection that they can get.

The top 10 countries that this ETF is invested in include France (28.17%), Germany (21.19%), the Netherlands (18.71%), Spain (16.39%), Belgium (6.76%), Finland (5.22%), Ireland (1.26%), Italy (0.99%), Portugal (0.77%) and Austria (0.54%).

Chart courtesy of StockCharts.com.

Some of this fund’s top holdings include Anheuser-Busch InBev SA/NV (NYSE: BUD), Sanofi-Aventis SA (NASDAQ: SNY), Unilever NV (NYSE: UN), Banco Santander SA (NYSE: SAN), Telefonica SA (NYSE: TEF), Daimler Ag-Reg Shs (OTCMKTS: DDAIF) and LVMH Met Hennessy Louis Vuitton SE (OTCMKTS: LVMUY).

The top sectors that this ETF is invested in are consumer staples (20.95%), consumer discretionary (17.35%), industrials (15.93%), financials (11.85%), materials (10.53%) and health care (10.13%). The fund currently has $3.8 billion in assets under management and has a $523,303 average 30-day volume. It also has an expense ratio of 0.58%, meaning that it is slightly more expensive to hold in comparison to other exchange-traded funds.

As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an email. You just may see your question answered in a future ETF Talk.

Jim Woods

Jim Woods is a 20-plus-year veteran of the markets with varied experience as a broker, hedge fund trader, financial writer, author and newsletter editor. Jim is the editor of Intelligence Report, Investing Edge, the Bullseye Stock Trader, and The Deep Woods (formerly the Weekly ETF Report). His books include co-authoring, “Billion Dollar Green: Profit from the Eco Revolution,” and “The Wealth Shield: How to Invest and Protect Your Money from Another Stock Market Crash, Financial Crisis or Global Economic Collapse.” He’s also ghostwritten many books and articles, as well as edited content for some of the investment industry’s biggest luminaries. His articles have appeared on many leading financial websites, including StockInvestor.com, InvestorPlace.com, Main Street Investor, MarketWatch, Street Authority, Human Events and many others. Jim formerly worked with Investor’s Business Daily founder William J. O’Neil, helping to author training courses in the CANSLIM stock-picking methodology. The independent firm TipRanks rates Jim the No. 3 financial blogger in the world (out of more than 6,000). TipRanks calculates that, since 2012, he's made 361 successful recommendations out of 499 total, earning a success rate of 72% and a +15.3% average return per recommendation. He is known in professional and personal circles as “The Renaissance Man,” because his expertise includes such varied fields as composing and performing music; Western horsemanship, combat marksmanship, martial arts, auto racing and bodybuilding. Jim holds a BA in philosophy from the University of California, Los Angeles, and is a former U.S. Army paratrooper. A self-described “radical for capitalism,” he celebrates the virtue of making money from his Southern California horse ranch.