Japan’s recent dividend growth trajectory is encouraging. In local currency terms over the past year, the MSCI Japan Index’s dividend growth of 20.2% is well above the 13.3% dividend growth rate on the S&P 500, according to WisdomTree data. That is saying something because in recent years the U.S. has been the dominant developed markets force when it comes to dividend growth.
As is the case with some well-known, U.S.-focused WisdomTree dividend ETFs, JHDG considers return on assets and return on equity as part of its selection criteria.
“Return on equity for the WisdomTree Japan Hedged Dividend Growth Index (10.2%) was slightly higher than it was for the JPX-Nikkei Index 400 (9.5%), but the return on assets (ROA) figure for the WisdomTree Index (3.0%) was about twice that of the JPX-Nikkei Index 400 (1.6%), leading to almost 45% lower leverage. An interesting point on the subject of leverage: the WisdomTree Japan Hedged Dividend Growth Index had less than 4% weight to Financials, whereas the JPX-Nikkei Index 400 had 18.0% weight to this same sector, certainly a notable difference,” said WisdomTree Research Director Jeremy Schwartz in a note out Thursday. [Quality and Dividend Growth in Japan]
JHDG is WisdomTree’s thirteenth currency hedged ETF and the issuer’s ninth Japan fund. The new ETF charges 0.43% per year.
JHDG Top 10 Holdings
Table Courtesy: WisdomTree