Best ETFs – WisdomTree Japan Hedged Equity Fund (DXJ)
It shouldn’t be surprising that a strategy fund is next on our list of the best ETFs, because they are all the rage these days. According to BlackRock, strategy ETFs pulled in $61.3 billion in 2013 — a growth rate of 40% year-over-over. It seems investors want very specific funds in addition to their core holdings like the iShares Core S&P 500 ETF (IVV) in order to generate maximum results.
That’s why the WisdomTree Japan Hedged Equity Fund (DXJ) was one of the best ETFs of the year. WisdomTree had net inflows of $9.4 billion from just the DXJ in 2013. It’s a big reason why WisdomTree has the third highest rate of net inflows behind only Vanguard and iShares.
Although single-country funds involve additional risk because of the lack of diversification, the DXJ makes sense because it’s hedged. That removes the currency risk of the yen in relation to the U.S. dollar. Plus, Japan’s stocks have been down so long there’s probably more reversion to the mean that lies ahead for the DXJ. Don’t be surprised if this is one of the best ETFs next year as well.