A Hedged Approach to Investing in Europe
The WisdomTree Europe Hedged Equity Fund (HEDJ) is an exchange-traded fund that provides investors with exposure to the European equity market while also hedging against possible fluctuations between the dollar and the euro, suggests fund expert Jim Woods, editor of The Deep Woods.
This exchange-traded fund is based off the WisdomTree Europe Hedged Equity Index, which tracks European dividend-paying companies in the WisdomTree International Equity Index, trades in euros, has at least a $1 billion market capitalization and derives at least 50% of its revenue in the latest fiscal year from countries outside of Europe.
More from Jim Woods: A Hedged ETF for Exposure to Japan
The presence of a currency hedge also matters because there could be large movements in the exchange rate between the U.S. dollar and the euro.
At a time when the Italian economy is in a recession, Spain is undergoing political turmoil regarding Catalonian independence and populist politicians and parties are gaining sway across the continent, prospective investors in the European economy need all the protection that they can get.
The top 10 countries that this ETF is invested in include France (28.17%), Germany (21.19%), the Netherlands (18.71%), Spain (16.39%), Belgium (6.76%), Finland (5.22%), Ireland (1.26%), Italy (0.99%), Portugal (0.77%) and Austria (0.54%).
Some of this fund’s top holdings include Anheuser-Busch InBev SA/NV (BUD), Sanofi-Aventis SA (SNY), Unilever NV (UN), Banco Santander SA (SAN), Telefonica SA (TEF), Daimler Ag-Reg Shares (DDAIF) and LVMH Met Hennessy Louis Vuitton SE (LVMUY).
The top sectors that this ETF is invested in are consumer staples (20.95%), consumer discretionary (17.35%), industrials (15.93%), financials (11.85%), materials (10.53%) and health care (10.13%).
See also: The Timely Ten: Blue Chip Buys with Value and Yield
The fund currently has $3.8 billion in net assets under management and has a $523,303 average 30-day volume. It also has an expense ratio of 0.58%, meaning that it is slightly more expensive to hold in comparison to other exchange-traded funds.
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