• Australian Dollar (7.20% Average Weight)*: The Australian dollar has depreciated more than 5% versus the U.S. dollar during the first month of 2015. WTIDGH’s dominant exposure here is to BHP Billiton (3.88% average weight), which was down about 1.2% over the month, but other Australian exposures were able to buoy WTIDGH’s overall Australia performance to about 50 basis points.
*Average weight refers to the average weight within WTIDGH from 12/31/14 to 1/31/15. Source for all bullet points is Bloomberg, with data measured from 12/31/14 to 1/31/15.
One-Third Exposure to the Euro Area
The greater than 33% average exposure to the euro area has made the WisdomTree International Hedged Dividend Growth Index an interesting broad-based international strategy to gain significant exposure to positive equity performance catalyzed by the policies of the European Central Bank.
We continue to believe the adoption of currency-hedged strategies are in early days—currency hedging started in Japan in 2013 and continued in the eurozone in late 2014 and early 2015. Broad international regional allocations are a natural frontier for people to expand this approach, and WisdomTree’s dividend-focused approach—with screens for quality and growth that the WTIDGH employs for stock selection—makes it an attractive option for developed world exposures.
1Source: Bloomberg. European stocks represented by the MSCI EMU Index are up more than 7% from 12/31/14 to 1/31/15.
2Source: Bloomberg. U.S. stocks represented by the S&P 500 Index from 12/31/14 to 1/31/15.
Important Risks Related to this Article
Foreign investing involves special risks, such as risk of loss from currency fluctuation or political or economic uncertainty. Investments in currency involve additional special risks, such as credit risk and interest rate fluctuations. Dividends are not guaranteed, and a company’s future ability to pay dividends may be limited. A company currently paying dividends may cease paying dividends at any time.