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Is WisdomTree Japan SmallCap Dividend ETF (DFJ) a Strong ETF Right Now?
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Launched on 06/16/2006, the WisdomTree Japan SmallCap Dividend ETF (DFJ - Free Report) is a smart beta exchange traded fund offering broad exposure to the Asia-Pacific (Developed) ETFs category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
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.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
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
The fund is managed by Wisdomtree. DFJ has been able to amass assets over $204.62 million, making it one of the average sized ETFs in the Asia-Pacific (Developed) ETFs. DFJ seeks to match the performance of the WisdomTree Japan SmallCap Dividend Index before fees and expenses.
The WisdomTree Japan SmallCap Dividend Index is comprised of dividend-paying small capitalization companies in Japan.
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 DFJ are 0.58%, which makes it one of the more expensive products in the space.
DFJ's 12-month trailing dividend yield is 2.70%.
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.
Taking into account individual holdings, Kobe Steel Ltd accounts for about 1.67% of the fund's total assets, followed by Cosmo Energy Holdings Co Ltd and Tokyo Seimitsu Co Ltd.
Its top 10 holdings account for approximately 7.25% of DFJ's total assets under management.
Performance and Risk
Year-to-date, the WisdomTree Japan SmallCap Dividend ETF has added roughly 13.68% so far, and is up about 16.16% over the last 12 months (as of 11/27/2023). DFJ has traded between $61.08 and $71.80 in this past 52-week period.
The fund has a beta of 0.52 and standard deviation of 15.70% for the trailing three-year period, which makes DFJ a medium risk choice in this particular space. With about 743 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree Japan SmallCap Dividend ETF is a reasonable option for investors seeking to outperform the Asia-Pacific (Developed) ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
JPMorgan BetaBuilders Japan ETF (BBJP - Free Report) tracks MORNINGSTAR JAPAN TRGT MRKT EXPOSURE ID and the iShares MSCI Japan ETF (EWJ - Free Report) tracks MSCI Japan Index. JPMorgan BetaBuilders Japan ETF has $9.52 billion in assets, iShares MSCI Japan ETF has $13.17 billion. BBJP has an expense ratio of 0.19% and EWJ charges 0.50%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Asia-Pacific (Developed) ETFs.
Bottom Line
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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Is WisdomTree Japan SmallCap Dividend ETF (DFJ) a Strong ETF Right Now?
Launched on 06/16/2006, the WisdomTree Japan SmallCap Dividend ETF (DFJ - Free Report) is a smart beta exchange traded fund offering broad exposure to the Asia-Pacific (Developed) ETFs category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
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.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
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
The fund is managed by Wisdomtree. DFJ has been able to amass assets over $204.62 million, making it one of the average sized ETFs in the Asia-Pacific (Developed) ETFs. DFJ seeks to match the performance of the WisdomTree Japan SmallCap Dividend Index before fees and expenses.
The WisdomTree Japan SmallCap Dividend Index is comprised of dividend-paying small capitalization companies in Japan.
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 DFJ are 0.58%, which makes it one of the more expensive products in the space.
DFJ's 12-month trailing dividend yield is 2.70%.
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.
Taking into account individual holdings, Kobe Steel Ltd accounts for about 1.67% of the fund's total assets, followed by Cosmo Energy Holdings Co Ltd and Tokyo Seimitsu Co Ltd.
Its top 10 holdings account for approximately 7.25% of DFJ's total assets under management.
Performance and Risk
Year-to-date, the WisdomTree Japan SmallCap Dividend ETF has added roughly 13.68% so far, and is up about 16.16% over the last 12 months (as of 11/27/2023). DFJ has traded between $61.08 and $71.80 in this past 52-week period.
The fund has a beta of 0.52 and standard deviation of 15.70% for the trailing three-year period, which makes DFJ a medium risk choice in this particular space. With about 743 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree Japan SmallCap Dividend ETF is a reasonable option for investors seeking to outperform the Asia-Pacific (Developed) ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
JPMorgan BetaBuilders Japan ETF (BBJP - Free Report) tracks MORNINGSTAR JAPAN TRGT MRKT EXPOSURE ID and the iShares MSCI Japan ETF (EWJ - Free Report) tracks MSCI Japan Index. JPMorgan BetaBuilders Japan ETF has $9.52 billion in assets, iShares MSCI Japan ETF has $13.17 billion. BBJP has an expense ratio of 0.19% and EWJ charges 0.50%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Asia-Pacific (Developed) ETFs.
Bottom Line
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.