WisdomTree Japan Equity UCITS ETF - USD Hedged

Issuer: WisdomTree

Asset Class: Equity

TER: 48bps

Trading Currency: USD

Pays Income: False

Listing Date: 21 May 2015

Ticker: DXJ

ISIN: IE00BVXC4854

This financial instrument offers a strategic approach to investing in the Japanese stock market by focusing on dividend-paying companies while simultaneously mitigating currency risk for dollar-based investors. The underlying strategy tracks a custom-built index that employs a dividend-weighting methodology. This means that constituent companies are selected and weighted based on the cash dividends they are projected to pay in the upcoming year, potentially favouring fundamentally sound, mature businesses. This can provide a different return profile compared to conventional market-capitalisation-weighted approaches, often with a tilt towards value stocks.

A crucial feature of this product is its currency-hedging mechanism. It is designed to neutralize the fluctuations between the Japanese Yen and the US Dollar. For an investor whose portfolio is denominated in dollars, this hedge can be particularly advantageous when the yen is expected to weaken against the dollar, as it helps to isolate the performance of the underlying Japanese equities. Without the hedge, a strong dollar (or weak yen) would detract from the returns of Japanese assets when translated back into dollars. This structure therefore allows investors to express a pure view on the Japanese equity market without taking on direct currency exposure. The accumulating share class structure also ensures that all dividend income is reinvested back into the fund, fostering potential for compounded growth over the long term.