ETF Trends
ETF Trends

WisdomTree, a leading ETF sponsor and index developer, has launched a new  exchange traded fund (ETF): WisdomTree International Hedged Equity Fund (NYSRArca: HEDJ). HEDJ is a “fund of funds.”

HEDJ is designed to provide exposure to the equity securities in Europe, Australasia and the Far East, while at the same time hedging currency movements in these regions versus the U.S. dollar. Investors can invest internationally with or without exposure to currencies, giving it a currency hedge, not an equity hedge.

Ron Rowland for Seeking Alpha says that HEDJ intends to enter into forward currency contracts or futures contracts in order to offset the fund’s exposure to non-U.S. currencies. The effect would be to deliver greater returns than an equivalent non-currency hedged investment when the U.S. dollar is going up in value relative to foreign currencies and lower returns when the U.S. dollar is falling.

The expense ratio is 0.58% for HEDJ and 0.48% on the underlying funds. When added together, it’s a 1.06% expense ratio. However, a portion of the management fees equal to the underlying fund fees will be waived, resulting in a net expense ratio of 0.58%. [More on currency ETFs.]

For more stories about new ETFs, visit our new ETF category.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.