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More Currency-Hedged ETFs From WisdomTree

WisdomTree Investments (NASDAQ: WETF ) is the name of the game in the currency-hedged equities ETFs space. Though other big issuers like State Street and bellwether iShares of BlackRock are now looking to beef up their currency-hedged portfolio, WisdomTree seems in no mood to give up its top rank among the currency-hedged ETFs’ space (read: Can Anyone Match WisdomTree in Currency-Hedged ETFs? ). After all, the investing paradigm will now be in focus as the Fed is on the course of policy tightening and the most developed economies are walking along the easy-money path. Among them, the Euro zone and the Japan are under the spell of QE polices. Thanks to this policy differential, the greenback will likely gain strength in the coming days while other developed currencies will lose it. Probably this is why WisdomTree rolled out four currency-hedged ETFs lately, each with a focus on dividends. Let’s delve a little deeper: WisdomTree Dynamic Currency Hedged International Equity Fund (BATS: DDWM ) The newly launched fund seeks to provide exposure to dividend-paying companies in the industrialized world ex U.S. and Canada while hedging exposure to fluctuations between the U.S. dollar and foreign currencies (read : 2 Excellent Dividend Growth ETFs in Focus ). With this focus, the index currently holds a well-diversified basket with HSBC Holdings, Nestle SA and GlaxoSmithKline Plc as the top three holdings. In fact, the fund also provides a nice exposure to various sectors. Financials tops the list with 47.9% allocation, followed by Industrials with 24.5%, Consumer Staples with 23.4% and Consumer Discretionary with 22.9% of the basket. Country-wise, United Kingdom and Japan get double-digit exposure. The fund charges 35 bps in fees. Competition: The newly launched product is likely to face competition from quite a number of funds prevalent in the global equities space. Still, a few ETFs can emerge as strong contenders. The db X-trackers MSCI All World ex US Hedged Equity Fund (NYSEARCA: DBAW ) and the MSCI All World ex US High Dividend Yield Hedged Equity ETF (NYSEARCA: HDAW ) are some of the examples. WisdomTree Dynamic Currency Hedged International SmallCap Equity Fund (BATS: DDLS ) The fund looks to track the small-cap dividend-paying companies of the industrialized economy outside of the U.S. and Canada while offering currency-hedging exposure. The fund is pretty well spread out across components with no firm making up more than 0.56% of assets. Salmar ASA, Cofinimmo and Ladbrokes Plc are the top three holdings of the index. The ETF is skewed toward Industrials (48.8%), Consumer Discretionary (41.2%) and Financials (35.6%). In terms of country allocation, Japan (27.9%), U.K. (16.3%) and Australia (10.9%) take the leading positions. The fund’s net expense ratio is 0.43% annually. Competition: The foreign mid and small cap equities ETF space is relatively less jam-packed. In the set, while non-hedged small-cap ETFs like the FTSE All-World ex-US Small Cap Index ETF (NYSEARCA: VSS ) and the FTSE RAFI Developed Markets ex-U.S. Small-Mid Portfolio ETF (NYSEARCA: PDN ) pose as threats, products like the Currency Hedged MSCI EAFE Small-Cap ETF (NYSEARCA: HSCZ ) may give direct competition. WisdomTree Dynamic Currency Hedged Europe Equity Fund (BATS: DDEZ ) This one follows the same strategy with a focus on European stocks. In terms of country allocation, Germany, France, Spain and Italy are leading with double-digit exposure. Company-specific concentration risk is moderate with around 4.25% exposure. Anheuser-Busch InBev NV, Banco Santander SA and Total SA are the top three holdings of the fund. The fund has a tilt toward Financials (46.9%) while Industrials, Consumer Discretionary, Consumer Staples and Utilities account for considerable weight in the fund. The fund’s net expense ratio is 0.43% annually. Competition: The hedged Europe equities ETFs are teeming with products. The WisdomTree Europe Hedged Equity ETF (NYSEARCA: HEDJ ) , the Deutsche X-trackers MSCI Europe Hedged Equity ETF (NYSEARCA: DBEU ) and the ProShares Hedged FTSE Europe ETF (NYSEARCA: HGEU ) are to give neck-and-neck competition. WisdomTree Dynamic Currency Hedged Japan Equity Fund (BATS: DDJP ) Obviously, there will be a separate fund for Japan with the above-mentioned investment objective. WisdomTree already has several successful currency-hedged ETFs on Japan. Toyota Motors, NTT DoCoMo, Nippon Telegraph are the top three holdings of the fund. No stock accounts for more than 4.60% of the basket. Consumer Discretionary (41.9%), Industrials (39.4%) and Financials (33.1%) are the top three sectors of the fund. Competition: The likely peers of this newbie are the WisdomTree Japan Hedged Dividend Growth ETF (NYSEARCA: JHDG ) , the WisdomTree Japan Dividend Growth Fund (NYSEARCA: JDG ) and the Deutsche X-trackers MSCI Japan Hedged Equity ETF (NYSEARCA: DBJP ) . Link to the original article on Zacks.com

What Powerball, Stocks, And Contrarianism Have In Common

“You’ve got to kick fear to the side, because the payoff is huge.” – Mariska Hargitay We all know that the lottery is random, and that the odds are one in 292 million. Maybe you’ll get lucky and win it all, or maybe you’ll split the payout because multiple people luckily choose the same winning numbers. But keep in mind that the higher the lottery jackpot goes, the more likely you are to split the pot with others. Lottery participation is not linear. Every new dollar increase in the jackpot game after game does not bring with it a set new number of people who play. Rather, the larger the jackpot, the more exponential the number of people who play becomes. That means the more attention the lottery gets, the odds of splitting the payout with others actually increases. Meaning if you really want to play the lottery, the best way to do so given the same odds of choosing the right numbers is actually to bet on a jackpot that is high, but not high enough to attract a large number of new players. And this relates to the stock market how? The more an investment is talked up (largely because that investment has already moved and made a boat load of money), the more likely you are to split the payout among others listening to the same reasons to buy that particular investment. The more people know about a big payout, the more likely you are to split the pot and not make as much as you hoped. There is a high correlation to the amount of attention the Powerball and stock market gains receive from the media and the jump in the number of new entrants who come in afterwards This is where contrarianism comes into play. Few people pay attention to losing investments. Those who do will often be too scared to buy in after a large drawdown, even though the very definition of “buy low, sell high” is based on those depressed prices that happen peak to trough. Some will argue that if a stock, asset class, or strategy is down, it must be down for a good reason. As we know from several quantitative studies of markets, however, that “good reason” may be either 1) legitimate, 2) random, or 3) based on a cycle that simply doesn’t favor that investment. We show the latter point as being a major one in our award winning papers related to predicting stock market volatility. Being a contrarian isn’t about going against the crowd. It’s about betting on a jackpot which few other players are betting on, so the odds of you splitting the payout are much lower. Let’s apply this to today’s market. Ask yourself very simply – where have most people overweighted their portfolios? What is the overarching narrative? Where are most people betting? Likely on the “cleanest dirty shirt” on the global landscape, which is the US stock market. Why? Because Fed policy and the Age of QE, combined with ever faster information flow from the internet has resulted in a similar Powerball mentality among a large portion of the investor landscape. Make no mistake about it – though we may hear stories about investors “selling” US stocks (NYSEARCA: SPY ) in this volatility, you can’t unwind 5+ years of divergence from the rest of the world in 5+ trading days. Where does the contrarian look to now? Reflation through a bounce in commodities (NYSEARCA: DBC ) and emerging markets (NYSEARCA: EEM ), both of which no one seems to want to buy a ticket on. Of course that doesn’t mean you buy that ticket right here, right now. But that also doesn’t mean you should ignore what on the surface looks like a low payout right now. 6 11 19 48 54 06 QP

Apple Win Streak Threatened By Market Reversal

Stocks reversed lower Wednesday, putting a damper on hopes for Apple (AAPL) to pull out its biggest winning streak since September. If the stock were to close higher on Wednesday, that would be its fourth straight gain. Apple hasn’t seen consecutive positive action like that in about four months. Shares rose as much as 1.2% percent in slightly above average volume Wednesday, but the stock was hovering in and out of red territory by the afternoon.