WisdomTree Japan Hedged Equity Fund (NYSEArca: DXJ) led all U.S.-listed ETFs in the first quarter as the fund gathered $4 billion of fresh cash.
However, the WisdomTree ETF has been lagging the performance of rivals such as iShares MSCI Japan (NYSEArca: EWJ) the past couple weeks due to a strengthening yen versus the U.S. dollar.
The WisdomTree fund invests in Japanese stocks but hedges its exposure to the yen. Therefore, it will outperform unhedged ETFs such as EWJ when the yen weakens against the dollar.
The multi-month slide in CurrencyShares Japanese Yen Trust (NYSEArca: FXY) has provided a tailwind to DXJ relative to unhedged Japanese ETFs, although the yen currency ETF has bounced somewhat the past couple weeks. [Red-Hot WisdomTree Japan ETF May Rally More on Yen Devaluation]
WisdomTree Japan Hedged Equity Fund has taken in at least $1 billion for the third month in a row.
“It’s amazing,” says Chris Hempstead, director of ETF execution services at WallachBeth Capital LLC.
The $4 billion first-quarter inflow is a massive haul for an ETF that currently holds about $5.7 billion. The fund has an expense ratio of 0.48%.