- The WisdomTree Europe Hedged Equity ETF (HEDJ +1.2%) has been a popular target for investor dollars this year - gathering $10B of assets while rising 16.6%.
- S&P Capital IQ's Todd Rosenbluth is as bearish on the euro as the next guy, but he suggests some of the fund's most heavily-weighted holdings are expensive, particularly consumer staples, which account for 23% of the ETF's assets. In fact, says Rosenbluth, the three largest consumer staples stocks in HEDJ - Anheuser-Busch, Unilever, and L'Oreal - are all rated Sell by S&P Capital IQ.
- Now all three of these names are in other European ETFs - including currency-hedged ones like HEZU and EZU - but not in such a high concentration.
- Rosenbluth: "We think investors need to be careful when reviewing European ETFs and understanding not just whether they are hedged."
- Source: Barron's
- ETFs: VGK, FEZ, IEV, HEDJ, EPV, EZU, FEU, FEP, UPV, EURL, ADRU, FEEU, DBEU, IEUR, FIEU, ESTX, HEZU, SBEU, DBEZ, FEUZ