WisdomTree launched the WisdomTree Japan SmallCap Dividend UCITS ETF on the London Stock Exchange. ….
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Christopher Gannatti, WisdomTree Head of Research in Europe
The fund seeks to track the price and yield performance of the WisdomTree Japan SmallCap Dividend Index and has a net expense ratio of 0.48%.
Fears at the prospect of a global trade war has caused huge volatility in equity markets in 2018 but for those looking to maintain long-term allocations to equities, there are segments of the equity market that tend to be less affected by the current issues.
The investment case for Japanese small-cap companies lies in the fact that they are more locally oriented and provide greater exposure to the local economy’s endogenously driven growth cycle, and with strengthening domestic demand, the index’s constituents derive more than 80% of their weighted average revenue inside Japan, compared with 57% for Japanese large-caps.
Christopher Gannatti, WisdomTree Head of Research in Europe said, “We think Japanese small-caps provide the purest way to tap into the local economic growth prospects. After decades of deflation, deleveraging and demand contraction, Japan’s domestic demand is now driving growth. A structural shortage of labour is forcing improvements in both the quality of employment and the incomes earned from employment and the government are delivering on a policy switch to ‘Fiscal Dominance’ and Japanese small-caps have performed strongly across multiple time horizons in the past ten years, offering differentiation relative to large-caps alone.”
“With the Yen searching for a firm direction over the past few years, many investors have been uncertain as to the best way to invest in Japanese equities. If investors want to try to side-step the Yen’s movements and benefit from growth within Japan, small-caps can offer a potential, domestically-focused opportunity,” he said.
Rafi Aviav, WisdomTree Head of Product Development in Europe, said, “The WisdomTree Japan SmallCap Dividend UCITS ETF taps into the Japanese domestic economy while offering exposure to the size and value factors, which have been the clear winners from a factor perspective in Japan in the past decade. The index has a live track record of more than 10 years, through which it has outperformed its small-cap benchmark by 1.7% per annum and its large-cap benchmark by 3.4% per annum, while maintaining low correlations (around 0.5) with European and US markets, true to its domestic focus. We believe this fund offers a unique way to access Japanese small-caps and it is particularly relevant in these times, when global free trade may be challenged.”
Share Class Name
WisdomTree Japan SmallCap Dividend UCITS ETF – USD
WisdomTree Japan SmallCap Dividend UCITS ETF – USD Acc