The WisdomTree Dynamic Currency Hedged International Equity Fund (DDWM) made its debut on 01/07/2016, and is a smart beta exchange traded fund that provides broad exposure to the Broad Developed World ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
Managed by Wisdomtree, DDWM has amassed assets over $246.18 M, making it one of the average sized ETFs in the Broad Developed World ETFs. DDWM seeks to match the performance of the WisdomTree Dynamic Currency Hedged International Equity Index before fees and expenses.
The WisdomTree Dynamic Currency Hedged International Equity Index is a fundamentally weighted Index that measures the performance of dividend-paying companies in the industrialized world, excluding Canada & the US, & it remove from index performance the impact of changes to the value of foreign currencies relative to the USD with a hedge ratio ranging from 0 to 100% on a monthly basis.
Cost & Other Expenses
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for this ETF are 0.35%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 3.42%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
When you look at individual holdings, China Mobile Ltd accounts for about 1.38% of the fund's total assets, followed by Hsbc Holdings Plc (HSBA) and Bp Plc (BP/).
The top 10 holdings account for about 12.53% of total assets under management.
Performance and Risk
The ETF has lost about -0.28% so far this year and is up roughly 6.10% in the last one year (as of 08/29/2018). In the past 52-week period, it has traded between $28.72 and $31.95.
The fund has a beta of 0.59 and standard deviation of 12.99% for the trailing three-year period. With about 850 holdings, it effectively diversifies company-specific risk.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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WISDMTR-DCH INT (DDWM): ETF Research Reports
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