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WisdomTree Europe Hedged Equity Fund surpasses USD10bn in assets


WisdomTree’s Europe Hedged Equity Fund (HEDJ), which provides exposure to European dividend-paying exporters, while hedging out the movements of the euro relative to the US dollar, has surpassed USD10 billion in assets. 

The recent formal announcement of the European Central Bank's (ECB) aggressive monetary policy is continuing the weakening trend in the euro, potentially helping exporters who stand to benefit from a depreciating currency.

Earlier this year the euro hit 11-year lows relative to the US dollar and since 2014, the euro and local European equities have started to increasingly show negative correlation.

Luciano Siracusano, WisdomTree Chief Investment Strategist, says: "There is uncertainty about the future of the euro and there could be more volatility to come. We believe this makes Europe an attractive place to neutralise currency exposure. A weakening euro may help boost the competitiveness of European exports, an element HEDJ seeks to take advantage of through its exporter tilt."

HEDJ experienced record inflows of USD5 billion3 last year with USD2.8 billion4 of that coming in last few months of 2014. The Fund's powerful value proposition has helped continue momentous flows into 2015, with another USD2.99 billion of inflows in January, more than any other ETF during that time period.5

Jeremy Schwartz, WisdomTree Director of Research, says: "When thinking about international equity exposure, it's important to remember there are two components of returns: equity movement, plus the currency movement, relative to the US dollar. So, if an investor does not have strong conviction on a currency's future performance – the baseline allocation should not be 100% unhedged."

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