WisdomTree Japan Equity UCITS ETF - GBP Hedged

Issuer: WisdomTree

Asset Class: Equity

TER: 45bps

Trading Currency: GBX

Pays Income: False

Listing Date: 04 Nov 2015

Ticker: DXJP

ISIN: IE00BYQCZF74

This financial product offers a strategic and targeted investment approach to the Japanese equity market by focusing exclusively on dividend-paying companies. The underlying strategy is designed to track a fundamentally weighted index, which marks a significant divergence from traditional market-capitalisation methodologies. Instead of weighting constituent companies by their market size, the index allocates weight based on the aggregate cash dividends they are projected to pay in the upcoming year. This dividend-focused approach provides exposure to a basket of established, cash-generative Japanese businesses, potentially offering a unique risk and return profile compared to broader market indices. This methodology can be particularly appealing for investors seeking an income-oriented or value-tilted exposure within their Japanese equity allocation.

A critical feature of this specific share class is its embedded currency-hedging mechanism. It is purposefully engineered to neutralise the impact of exchange rate fluctuations between the Japanese Yen and the British Pound. This is a crucial consideration for investors whose home currency is the pound, as it helps to isolate the investment's performance to the returns of the underlying Japanese equities, rather than being significantly impacted by currency market volatility. By mitigating this layer of risk, the investment aims to provide a purer exposure to the Japanese stock market's performance. This makes it a suitable instrument for those who wish to strategically invest in Japan but are concerned about the potential adverse effects of a depreciating Yen against their base currency, thereby seeking a more predictable return stream from the asset class itself.