WisdomTree Japan Hedged SmallCap Equity Fund (DXJS)

Overview

The WisdomTree Japan Hedged SmallCap Equity Fund (DXJS) seeks to provide investment results that closely correspond to the price and yield performance of the WisdomTree Japan SmallCap Equity Index, hedged against fluctuations in the relative value of the U.S. dollar and the Japanese yen.

Reputation and Reliability

WisdomTree is a well-established ETF provider known for its innovative ETF products and rules-based investment strategies.

Management Expertise

WisdomTree has a dedicated team of investment professionals with experience in ETF management and currency hedging strategies.

Goal

To track the performance of the WisdomTree Japan SmallCap Equity Index, while mitigating the impact of currency fluctuations between the U.S. dollar and the Japanese yen.

Investment Approach and Strategy

Strategy: The fund employs a full replication strategy, holding all or substantially all of the securities in the underlying index and utilizes currency hedging to reduce the impact of JPY/USD exchange rate movements.

Composition The ETF primarily holds stocks of Japanese small-cap companies. The holdings are diversified across various sectors of the Japanese economy.

Market Share: DXJS's market share represents a portion of the total assets invested in Japan small-cap equity ETFs, which is constantly in flux based on fund inflows and outflows as well as performance.

Total Net Assets (AUM): 508132460

Key Competitors

• iShares MSCI Japan Small-Cap ETF (SCJ)
• First Trust Japan AlphaDEX Fund (FJP)
• JPMorgan BetaBuilders Japan ETF (BBJP)

Competitive Landscape

The competitive landscape consists of ETFs that target Japanese equities, with variations in market capitalization focus, currency hedging, and weighting methodologies. DXJS offers a unique currency-hedged approach within the small-cap segment, providing an advantage to investors seeking to isolate Japanese equity performance from currency risk. However, competitors with larger AUMs may offer greater liquidity.

Historical Performance: Historical performance data needs to be obtained from reliable financial data providers and would typically consist of total returns for periods such as 1-month, 3-month, YTD, 1-year, 3-year, 5-year, and 10-year.

Benchmark Comparison: The ETF's performance is compared to the WisdomTree Japan SmallCap Equity Index to assess tracking accuracy and the effectiveness of the currency hedging strategy.

Expense Ratio: 0.58

Average Trading Volume

The average trading volume for DXJS indicates how actively the ETF is traded, a higher volume signifying more liquidity.

Bid-Ask Spread

The bid-ask spread of DXJS provides insights into the cost of trading the ETF, with a narrower spread indicating lower transaction costs.

Market Environment Factors

Economic indicators such as GDP growth, inflation rates, and interest rate policies in Japan influence DXJS. Sector-specific growth prospects in the Japanese economy and global market sentiment also impact the fund.

Growth Trajectory

The growth trajectory of DXJS depends on investor demand for currency-hedged exposure to Japanese small-cap equities. Changes to the underlying index methodology or hedging strategy could also influence its growth.

Competitive Edge

DXJS offers a unique currency-hedged approach to investing in Japanese small-cap equities, shielding investors from currency fluctuations. This differentiates it from non-hedged competitors. WisdomTree's expertise in currency hedging strategies provides further competitive advantage. The fund's rules-based index methodology ensures transparency and consistency. By mitigating currency risk, DXJS can potentially offer more predictable returns for U.S. dollar-based investors.

Volatility

Historical volatility measures the degree of price fluctuations of DXJS over time.

Market Risk

DXJS is subject to market risk associated with investments in Japanese small-cap equities, including economic downturns, sector-specific risks, and geopolitical events.

Ideal Investor Profile

DXJS is suitable for investors seeking exposure to Japanese small-cap equities while mitigating currency risk. It is appropriate for those with a neutral or bearish outlook on the Japanese yen relative to the U.S. dollar.

Market Risk

DXJS is suitable for long-term investors seeking diversified exposure to the Japanese market and for active traders who may use the fund to express a view on the Japanese equity market while neutralizing currency effects.

The WisdomTree Japan Hedged SmallCap Equity Fund (DXJS) offers investors exposure to Japanese small-cap equities while mitigating the impact of currency fluctuations. It is ideal for investors who want exposure to Japanese companies, but are wary of the risks associated with changes in currency exchange rates. DXJS faces competition from other Japanese equity ETFs, but it sets itself apart with its currency hedging strategy. The fundu2019s performance is dependent on the performance of the Japanese small-cap market and the effectiveness of its hedging strategy. Investors should consider their risk tolerance and investment objectives before investing.

Data Sources:

• WisdomTree
• FactSet
• Bloomberg

Disclaimers:

The data and analysis provided are for informational purposes only and should not be considered investment advice. Past performance is not indicative of future results. Investors should consult with a qualified financial advisor before making any investment decisions.