The debut of DXKW is arguably well-time as South Korean banker s and policymakers have said this year that the weak yen is one of the two biggest headwinds facing the economy there.
“Korea’s exports share a high degree of overlap with Japan’s. Korea is arguably the country that would be most impacted by Shinzo Abe’s programs to stimulate Japan’s economy, which have resulted in a weaker yen. If the yen continues to weaken considerably, Korea may have to counteract these measures, in which case a currency-hedged option could become more important for Korean equities,” said WisdomTree Research Director Jeremy Schwartz in a note.
In addition to the won hedge, DXKW focuses on companies that derive less than 80% of their sales from inside of South Korea. There is a 10% cap to any individual security, and a 4.5% cap to the second-largest individual security at the time of the annual Index rebalance,” according to WisdomTree.
DXKW Sector Allocations