The WisdomTree Europe Hedged Equity ETF (HEDJ) made its debut on 01/04/2010, and is a smart beta exchange traded fund that provides broad exposure to the European Equity ETFs category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
Managed by Wisdomtree, HEDJ has amassed assets over $1.58 billion, making it one of the larger ETFs in the European Equity ETFs. HEDJ seeks to match the performance of the WisdomTree Europe Hedged Equity Index before fees and expenses.
The WisdomTree Europe Hedged Equity Index is designed to provide exposure to European equities while at the same time neutralizing exposure to fluctuations between the Euro and the U.S. dollar.
Cost & Other Expenses
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for HEDJ are 0.58%, which makes it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 3.02%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Taking into account individual holdings, Deutsche Telekom Ag (DTE) accounts for about 5.41% of the fund's total assets, followed by Banco Bilbao Vizcaya Argentaria Sa (BBVA) and Lvmh Moet Hennessy Louis Vuitton Se (MC).
The top 10 holdings account for about 40.44% of total assets under management.
Performance and Risk
The ETF return is roughly 8.74% and is up about 10.50% so far this year and in the past one year (as of 02/10/2025), respectively. HEDJ has traded between $41.58 and $48.49 during this last 52-week period.
The fund has a beta of 0.87 and standard deviation of 16.37% for the trailing three-year period, which makes HEDJ a medium risk choice in this particular space. With about 135 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree Europe Hedged Equity ETF is not a suitable option for investors seeking to outperform the European Equity ETFs segment of the market. Instead, there are other ETFs in the space which investors should consider.
IShares MSCI Eurozone ETF (EZU) tracks MSCI EMU Index and the Vanguard FTSE Europe ETF (VGK) tracks FTSE Developed Europe All Cap Index. IShares MSCI Eurozone ETF has $7.34 billion in assets, Vanguard FTSE Europe ETF has $17.53 billion. EZU has an expense ratio of 0.51% and VGK charges 0.06%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the European Equity ETFs.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Get it free >>WisdomTree Europe Hedged Equity ETF (HEDJ): ETF Research Reports
DTE Energy Company (DTE) : Free Stock Analysis Report
Banco Bilbao Viscaya Argentaria S.A. (BBVA) : Free Stock Analysis Report
Moelis & Company (MC) : Free Stock Analysis Report
iShares MSCI Eurozone ETF (EZU): ETF Research Reports
Vanguard FTSE Europe ETF (VGK): ETF Research Reports
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
