HEDJ: Solid Portfolio Without The Currency Risk

seekingalpha06-19

International investing is challenging due to currency impact and lack of outperformance relative to the US.WisdomTree Europe Hedged Equity ETF (HEDJ) hedges against euro-dollar currency fluctuations,...

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}\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nHEDJ: Solid Portfolio Without The Currency Risk\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-06-19 06:00 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4699824-hedj-solid-portfolio-without-the-currency-risk><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>International investing is challenging due to currency impact and lack of outperformance relative to the US.WisdomTree Europe Hedged Equity ETF (HEDJ) hedges against euro-dollar currency fluctuations,...</p>\n\n<a href=\"https://seekingalpha.com/article/4699824-hedj-solid-portfolio-without-the-currency-risk\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"ASML","symbol_name":"阿斯麦","start_time":0,"source_url":"https://seekingalpha.com/article/4699824-hedj-solid-portfolio-without-the-currency-risk","article_id":"2444493732","we_media_id":null,"thumbnails":["https://static.seekingalpha.com/cdn/s3/uploads/getty_images/171720729/image_171720729.jpg"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2444493732","pubTimestamp":1718748000,"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"Well - you don't have to. If you're bullish on Europe but don't want exposure to the euro, the WisdomTree Europe Hedged Equity Fund ETF  is worth considering. HEDJ is a fund that gives investors access to the performance of a basket of European equities hedged against the currency fluctuations between the euro and the dollar. The fund tracks the performance of the WisdomTree Europe Hedged Equity Index. The idea here is that through the use of a currency-hedging strategy, HEDJ seeks to isolate investors' returns from the forex market. This can be useful during long periods of extreme euro depreciation against the greenback, helping to maintain the real value of European-currency denominated wealth. A Look At The Holdings The appeal of the fund goes beyond the currency hedging side, but also more broadly in terms of it as a diversifier. The top 10 holdings make up 42.48% of the fund, which is fairly concentrated but also not unusual for international funds regardless of whether they are ","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"ASML":"阿斯麦","HEZU":"iShares Currency Hedged MSCI EMU ETF","FDN":"First Trust Dow Jones Internet I","PSA":"公共存储公司","BK4585":"ETF&股票定投概念","BK4534":"瑞士信贷持仓","LU2063271972.USD":"富兰克林创新领域基金","BK4147":"半导体设备","LU0097036916.USD":"贝莱德美国增长A2 USD","HEDJ":"欧洲证券汇率对冲ETF-WisdomTree","BK4533":"AQR资本管理(全球第二大对冲基金)","IE00BD6J9T35.USD":"NEUBERGER BERMAN NEXT GENERATION MOBILITY \"A\" (USD) ACC","LU1064927863.SGD":"JPMorgan Funds - Europe Dynamic A (acc) SGD-H","BK4550":"红杉资本持仓","BK4588":"碎股","BK4084":"特种房地产投资信托","BK4217":"自存仓储房地产信托","IE0004445239.USD":"JANUS HENDERSON US FORTY \"A2\" (USD) ACC","STLA":"Stellantis NV","BK4099":"汽车制造商","03165":"华夏欧优股对冲"},"translate_title":"HEDJ：稳健的投资组合，无货币风险","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"PSA":1,"HEZU":1,"HEDJ":1,"STLA":0.8,"FDN":0.8,"03165":0.6,"ASML":0.6},"content_text":"International investing is challenging due to currency impact and lack of outperformance relative to the US.WisdomTree Europe Hedged Equity ETF (HEDJ) hedges against euro-dollar currency fluctuations, offering exposure to European equities without currency risk.The fund holds diversified companies like Stellantis NV and ASML Holding NV, with a value tilt, 3.33% dividend yield, and P/E of 10.40.Yuji Sakai International investing is hard. Aside from the fact that it's been hard to generate outperformance relative to the US for over 15 years now, one has to consider the impact of currency movement throwing off expected returns. If you're a US-based investor, the weaker international currency is relative to the Dollar, the more that serves as a headwind against performance because of that very conversion hurting your allocation. So why take the currency risk to begin with? Well - you don't have to. If you're bullish on Europe but don't want exposure to the euro, the WisdomTree Europe Hedged Equity Fund ETF (NYSEARCA:HEDJ) is worth considering. HEDJ is a fund that gives investors access to the performance of a basket of European equities hedged against the currency fluctuations between the euro and the dollar. The fund tracks the performance of the WisdomTree Europe Hedged Equity Index. The idea here is that through the use of a currency-hedging strategy, HEDJ seeks to isolate investors' returns from the forex market. This can be useful during long periods of extreme euro depreciation against the greenback, helping to maintain the real value of European-currency denominated wealth. A Look At The Holdings The appeal of the fund goes beyond the currency hedging side, but also more broadly in terms of it as a diversifier. The top 10 holdings make up 42.48% of the fund, which is fairly concentrated but also not unusual for international funds regardless of whether they are currency-hedged or not. WisdomTree.com What are these companies? Stellantis NV is a multinational automotive corporation, formed by the merger of Fiat Chrysler Automobiles and the Peugeot S.A. (PSA) Group, and is one of the largest automakers in the world. Banco Bilbao Vizcaya Argentaria SA is a banking group based in Madrid, Spain. ASML Holding NV is a Dutch company that produces complex semiconductor equipment such as lithography systems used in the manufacture of integrated circuits. And Siemens is a German multinational engineering and electronics conglomerate corporation with activities in over 200 countries. Nice mix here overall. The stocks in the portfolio give this a nice value tilt, with a dividend yield of 3.33%, and P/E of 10.40. WisdomTree.com Sector Composition and Weightings When we look at the sector allocation, Consumer Discretionary makes up the biggest allocation at 23.47%, followed by Industrials at 19.66% and Financials at 14.66%. It's rare to see Consumer Discretionary at the top of a fund allocation list. While I worry about the state of the consumer in the US, the international side I think is interesting as Europe begins its interest rate cutting cycle. WisdomTree.com As to country allocation, the Netherlands has the largest exposure here at 27%, followed by Germany and France. Overall fairly well-balanced in my view. WisdomTree.com Peer Comparison One fund worth comparing this against which also has currency hedges is the iShares Currency Hedged MSCI Eurozone ETF (HEZU). This fund invests solely in companies in the Eurozone region, while the HEDJ gives broader exposure to European equities, including companies outside of the Eurozone. When we look at the price ratio of the two, we find that there's no clear edge in choosing one over the other, given the performance has been roughly the same since 2020. StockCharts.com Pros and Cons The biggest positive here is that the WisdomTree Europe Hedged Equity ETF isolates investors' returns to exchange rate movements between the euro and dollar, thus potentially enhancing risk-adjusted return. The fund allows for passive investment in the broad European equity market, which is made up of well-diversified, dividend-paying companies operating across different sectors in Europe. The downside? If Europe actually appreciates relative to the dollar, you might want to actually unhedge your international exposure, as that would be a positive to total return. Hard to imagine given how strong the US economy has been relative to Europe, but still worth considering. In addition, the fund likely will also be affected by geopolitical and economic developments in the European region. This could have an adverse effect on the performance of the fund's underlying companies. Conclusion  Solid fund overall. It does what it's supposed to do, taking our currency movement, and the mix of holdings adds some nice diversification overall to a portfolio. I think it's worth considering if, like me, you believe it's only a matter of time before international investing shows some real momentum, and you want to take out the euro in your allocation.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.3","shortVersion":"4.29.3","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2444493732"}