WisdomTree expanded its line of dynamic currency hedged exchange traded funds with an international quality dividend growth strategy for yield-minded investors who are wary of foreign exchange fluctuations.
WisdomTree has rolled out the WisdomTree Dynamic Currency Hedged International Quality Dividend Growth Fund (BATS: DHDG). DHDG has a net expense ratio of 0.48%.
DHDG will try to reflect the performance of the WisdomTree Dynamic Currency Hedged International Quality Dividend Growth Index, which is comprised of developed market, ex- U.S. and Canada, dividend growing companies with the best combined rank of growth and quality factors while diminishing exposure to currency risk with a fluctuating hedge ratio ranging from 0% to 100% on a monthly basis.
The growth factor is based on long-term earnings growth expectations. The quality factor is based on three-year historical averages for return on equity and return on assets. Lastly, companies are weighted based on annual cash dividends paid.
Unlike the more popular currency hedged ETF strategies, DHDG, will utilize a type of dynamic currency hedged methodology that will hedge currency fluctuations in the relative value of the foreign currency against the U.S. dollar, ranging from 0% to 100% hedge based on interest rate differentials, valuations and relative price momentum on the foreign currencies, compared to the USD.