DXKW Seeks to Provide Exposure to Robust Korean Export Market and Help Reduce Overall Volatility of Local Currency. WisdomTree Expands Currency Hedged Equity Family of ETFs ...
WisdomTree (NASDAQ: WETF), an exchange-traded fund (“ETF”) sponsor and asset manager, today announced the launch of the WisdomTree Korea Hedged Equity Fund (DXKW) on the NASDAQ Stock Market. DXKW seeks to provide exposure to Korean equity markets while hedging exposure to the won and has an expense ratio of 0.58%.
‘Abenomics’ and a Weak Yen – Headwind for South Korean Exporters
South Korea is a flourishing emerging economy, known for its shipping industry and exporting prowess, supplying the world with advanced technologies and automobiles from global leaders. In 2012, South Korea’s gross domestic production (GDP)1 was nearly twice that of many developed nations including Switzerland, Sweden and Norway, and almost 60% of the country’s GDP was from exports.2
“For any exporter-focused country, a strengthening currency can be a competitive disadvantage in the global market place. In the last 12-months, as Japan’s policy of ‘Abenomics’ has resulted in a depreciating Japanese yen, South Korea’s won has appreciated significantly – 20% versus the yen.3
As a result, South Korea’s exporters have faced tougher competition from their revitalized Japanese counterparts,” said Jeremy Schwartz, WisdomTree Director of Research. “Given their significant overlap in export products, we believe South Korea is the country most impacted by the yen’s weakening. If the South Korean won declines relative to the yen – and for that matter, the U.S. Dollar – we believe this would be a boon for South Korea’s equities.”
Schwartz added, “We believe DXKW can offer exposure to the growth potential of South Korea’s exporters while helping to protect U.S. investors from potential declines in the Korean won against the U.S. dollar.”
Hedge Exposure to Won – One Way to Reduce Volatility
“Looking back over the last 20 years, there were two periods in which the Korean won experienced significant depreciation relative to the U.S. dollar. First during the Asian financial crisis and again during the global financial crisis, the won depreciated approximately 54% and 41%, respectively.4
These episodes added considerable volatility to the local equity market,” Schwartz said.
One way for U.S. investors to isolate the performance of Korean equities from the performance of the won is to hedge the currency exposure, thus, helping to reduce the overall volatility of investing in this market.
Expanding The WisdomTree Currency Hedged Equity Family
With the launch of DXKW, WisdomTree now offers six currency hedged equity strategies:
Ticker – Fund Name – Expense Ratio
DXJ – WisdomTree Japan Hedged Equity Fund – 0.48%
DXJS – WisdomTree Japan Hedged SmallCap Equity Fund – 0.58%
HEDJ – WisdomTree Europe Hedged Equity Fund – 0.58%
DXPS – WisdomTree United Kingdom Hedged Equity Fund – 0.48%
DXGE – WisdomTree Germany Hedged Equity Fund – 0.48%
DXKW – WisdomTree Korea Hedged Equity Fund – 0.58%
Source: ETFWorld – WisdomTree
1. PWC – PowerShares Dynamic Market Portfolio – $0.093690
2. PWO – PowerShares Dynamic OTC Portfolio – $0.003840
3. PGJ – PowerShares Golden Dragon Halter USX China Portfolio – $0.029580
4. PWB – PowerShares Dynamic Large Cap Growth Portfolio – $0.011540
5. PWV – PowerShares Dynamic Large Cap Value Portfolio – $0.086640
6. PWP – PowerShares Dynamic Mid Cap Value Portfolio – $0.034700
7. PWT – PowerShares Dynamic Small Cap Growth Portfolio – $0.005010
8. PWY – PowerShares Dynamic Small Cap Value Portfolio – $0.027250
9. PBJ – PowerShares Dynamic Food & Beverage Portfolio – $0.062160
10. PEJ – PowerShares Dynamic Leisure & Entertainment Portfolio – $0.000000
11. PJP – PowerShares Dynamic Pharmaceuticals Portfolio – $0.066080
12. PSI – PowerShares Dynamic Semiconductors Portfolio – $0.014870
13. PTE – PowerShares Dynamic Telecommunications & Wireless P – $0.039140
14. PID – PowerShares International Dividend Achievers Portfolio – $0.071140
15. PFM – PowerShares Dividend Achievers Portfolio – $0.062170
16. PZI – PowerShares Zacks Micro Cap Portfolio – $0.032480
17. PXJ – PowerShares Dynamic Oil & Gas Services Portfolio – $0.013290
18. PIC – PowerShares Dynamic Insurance Portfolio – $0.025460
19. PMR – PowerShares Dynamic Retail Portfolio – $0.011570
20. PKB – PowerShares Dynamic Building & Construction Portfolio – $0.000000
21. PUI – PowerShares Dynamic Utilities Portfolio – $0.144730
22. PXE – PowerShares Dynamic Energy Exploration & Production P – $0.037140
23. PXN – PowerShares Lux Nanotech Portfolio – $0.000000
24. PPA – PowerShares Aerospace & Defense Portfolio – $0.044520
25. PIV – PowerShares Value Line Timeliness Select Portfolio – $0.000000
26. PZJ – PowerShares Zacks Small Cap Portfolio – $0.000000
27. PHO – PowerShares Water Resources Portfolio – $0.004360
28. PRF – PowerShares FTSE RAFI US 1000 Portfolio – $0.144200
29. PIQ – PowerShares Dynamic MagniQuant Portfolio – $0.017500
30. PJM – PowerShares Dynamic Small Cap Portfolio – $0.009890
31. PJF – PowerShares Dynamic Large Cap Portfolio – $0.067650
32. PJG – PowerShares Dynamic Mid Cap Portfolio – $0.022290
33. PYZ – PowerShares Dynamic Basic Materials Sector Portfolio – $0.063830
34. PEZ – PowerShares Dynamic Consumer Discretionary Sector Po – $0.000000
35. PSL – PowerShares Dynamic Consumer Staples Sector Portfolio – $0.082170
36. PXI – PowerShares Dynamic Energy Sector Portfolio – $0.089730
37. PFI – PowerShares Dynamic Financial Sector Portfolio – $0.035450
38. PRN – PowerShares Dynamic Industrials Sector Portfolio – $0.035720
39. PTH – PowerShares Dynamic Healthcare Sector Portfolio – $0.000000
40. PJB – PowerShares Dynamic Banking Portfolio – $0.043020
41. PUW – PowerShares WilderHill Progressive Energy Portfolio – $0.003170
42. PSP – PowerShares Listed Private Equity Portfolio – $0.094890
43. PZD – PowerShares Cleantech Portfolio – $0.000000
44. PKW – PowerShares Buyback Achievers Portfolio – $0.058020
45. PDP – PowerShares DWA Technical Leaders Portfolio – $0.017950
46. PYH – PowerShares Value Line Industry Rotation Portfolio – $0.016660
47. PBP – PowerShares S&P 500 BuyWrite Portfolio – $0.064960
48. PFA – PowerShares Dynamic Developed International Opportuni – $0.043170
49. PAF – PowerShares FTSE RAFI Asia Pacific ex-Japan Portfolio – $0.310720
50. PEF – PowerShares FTSE RAFI Europe Portfolio – $0.000000
51. PJO – PowerShares FTSE RAFI Japan Portfolio – $0.000000
52. PIO – PowerShares Global Water Portfolio – $0.045130
53. PBD – PowerShares Global Clean Energy Portfolio – $0.000000
54. PXF – PowerShares FTSE RAFI Developed Markets ex-U.S. Por – $0.053160
55. PXH – PowerShares FTSE RAFI Emerging Markets Portfolio – $0.060080
56. PDN – PowerShares FTSE RAFI Developed Markets ex-U.S. Sm – $0.021810
57. PCA – PowerShares Autonomic Balanced NFA Global Asset Port – $0.049520
58. PAO – PowerShares Autonomic Balanced Growth NFA Global As – $0.036760
59. PMA – PowerShares Active Mega-Cap Fund – $0.000000
60. PSR – PowerShares Active U.S. Real Estate Fund – $0.087510
61. PIN – PowerShares India Fund – $0.038070
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