Exchange traded funds began their journey slowly and over the past half decade have exploded into popular consciousness – and more importantly retail investor portfolios.
The story of course in surpassing the hedge fund industry in AUM are the ETFs themselves. However, the market has been paying special attention to a provider of ETFs lately. WisdomTree Investments, a New-York based ETF product sponsor and asset manager, has been a popular trade of late as the currency-hedging and dividend strategies they deploy have developed a loyal following.
Why? Surinder Thind, an analyst at Jeffries, explains “The headwinds from recent macro volatility are transitory and provide an attractive entry point for WETF not seen in a year. Long-term fundamentals remain intact as expectations for a stronger USD on divergent global central bank policies will continue to drive outsized growth in currency hedged products. Concern around recent insider sales is a non-event, and the potential of the company’s suite of rising rate products remains underappreciated. Reiterate Buy.”
The Fed congregated today and produced more speculation, but the outlook hasn’t changed. With so much uncertainty in the markets there is a demand for products that neutralize the effects of currency fluctuations and raising rates.
WisdomTree’s most popular ETFs by far have been the WisdomTree Europe Hedged Equity Fund (NYSEarca: HEDJ) and WisdomTree Japan Hedged Equity Fund (NYSEarca: DXJ). The performance of the ETFs this year has been remarkable – despite the volatility and pullback they have gained 16.5% and 21.1% respectively.