Designed to provide broad exposure to the Broad Developed World ETFs category of the U.S. equity market, the WisdomTree Dynamic Currency Hedged International Equity Fund (DDWM) is a smart beta exchange traded fund launched on 01/07/2016.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
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.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
The fund is sponsored by Wisdomtree. It has amassed assets over $262.45 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 3.50%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
Looking at individual holdings, Bp Plc (BP/) accounts for about 1.51% of total assets, followed by Hsbc Holdings Plc (HSBA) and Royal Dutch Shell Plc Class A (RDSA).
Its top 10 holdings account for approximately 12.84% of DDWM's total assets under management.
Performance and Risk
The ETF has lost about -2.44% so far this year and was up about 5.76% in the last one year (as of 07/12/2018). In the past 52-week period, it has traded between $28.69 and $31.95.
DDWM has a beta of 0.58 and standard deviation of 13.21% for the trailing three-year period. With about 854 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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