WisdomTree (NasdaqGS: WETF), the fifth-largest U.S. issuer of exchange traded funds, added to its lineup today with two new ETFs.
New York-based WisdomTree added to its already expansive lineup of currency hedged ETFs with the debut of the WisdomTree International Hedged Equity Fund (NYSEArca: HDWM). The WisdomTree International Hedged Equity Fund offers investors exposure to ex-U.S. and Canada developed markets dividend payers while limiting currency risk via the currency hedged kicker.
The new ETF allocates 23.6% of its weight to U.K. stocks and another 14.2% to Japanese stocks. None of the other 19 countries represented in the new ETF command double digit weights. The U.K. is one of the best, if not the best, ex-U.S. dividend market. In 2014, U.K. firms once again offered excellent dividend growth. Payouts there surged 31% to $135 billion, according to Henderson Global Investors. [Good Timing for This new ETF]
Compared to other developed market destinations, such as the U.S., U.K. and Australia, Japan has a long way to go to prove its dividend mettle. However, the payout situation in historically low-yielding Japan is improving. For example, WisdomTree’s Japan dividend stream last year reached a new high of nearly 8 trillion yen, up 14.6% from the 2008. In dollar terms, the Dividend Stream also reached a new high of $77.2 billion, an increase of 4.5% from the 2012 high, according to WisdomTree.
As the issuer notes, HDWM is the essentially the currency hedged answer to the $682 million WisdomTree DEFA Fund (NYSEArca: DWM). DWM tracks an index where 43% of the constituents have dividend yields north of 3.7%. HDWM charges 0.35% per year.
WisdomTree’s other new offering is the WisdomTree Barclays U.S. Aggregate Bond Enhanced Yield Fund (NYSEArca: AGGY). The new ETFs offers the potential for enhanced yield while avoiding bonds with junk ratings.
AGGY is also a low duration option with an effective duration of 0.02 years, according to issuer data. Zero-duration or interest-rate-hedged ETFs that try to negate the negative effects of higher rates have done their job, outpacing unhedged equivalents. Over 39% of AGGY’s holdings are rated A, AA or AAA. [Fixed-Income ETFs That Beat Interest Rate Risk]
“As investors increasingly look for ways to boost the income potential of their portfolios, AGGY provides the opportunity to do so within core fixed income, while continuing to benefit from the diversification of a multi-sector portfolio,” said Rick Harper, WisdomTree head of fixed income and currency, in a statement.
AGGY charges just 0.12% per year.