Consequently, the stronger dollar and weaker euro were seen as a boon for export-heavy industries across Europe and the currency-hedged Europe ETFs that include heavy tilts toward large exporters. For instance, HEDJ’s underlying index specifically targets companies that generate the majority of revenue from overseas markets.
“The fund’s index screens for companies that derive at least 50% of their revenue from countries outside Europe and weights constituents by annual cash dividends paid,” according to Morningstar analyst Patricia Oey. “On a fundamental level, a falling euro benefits the large-cap, export-oriented consumer and industrials firms that are well-represented in this fund. Most of the companies in this fund are domiciled in Germany, France, Spain, and the Netherlands.”
WisdomTree Europe Hedged Equity Fund
For more information on the Eurozone, visit our Europe category.
Max Chen contributed to this article.