WisdomTree Japan SmallCap Dividend Fund (DFJ)

ETF WisdomTree Japan SmallCap Dividend Fund (DJS)

Profile:

• Focus: Invests in small-cap Japanese companies that pay dividends.
• Asset Allocation: 100% equities.
• Investment Strategy: Tracks the WisdomTree Japan SmallCap Dividend Index. This index selects stocks from the bottom 75% of the investable market capitalization range of the Japanese equity universe, based on a combination of dividend yield, free cash flow yield, and financial leverage.

Objective:

• To provide long-term capital growth and income through exposure to small-cap Japanese companies with a history of paying dividends.

Issuer:

• Company: WisdomTree Investments, Inc.
• Reputation and Reliability: WisdomTree is a reputable and experienced asset management firm with over $90 billion in assets under management.
• Management: The ETF is managed by a team of experienced investment professionals with expertise in Japanese equities and dividend investing.

Market Share:

• DJS has a market share of 0.06% in the Japan small-cap equity ETF category.

Total Net Assets:

• As of October 26, 2023, DJS has total net assets of $25.9 million.

Moat:

• DJS has a unique focus on small-cap Japanese companies with a history of paying dividends. This niche market focus provides the ETF with a competitive advantage over broader small-cap Japan ETFs.
• The ETF's index methodology emphasizes companies with strong financials and dividend-paying capacity, potentially offering investors a more reliable source of income.

Financial Performance:

• Since inception (May 2011) through October 26, 2023, DJS has generated an annualized total return of 5.66%, compared to the WisdomTree Japan SmallCap Dividend Index return of 5.91%.
• The ETF underperformed its benchmark in 2023 with a year-to-date return of -16.23% compared to the -14.73% return of the index.

Growth Trajectory:

• The growth of DJS is likely tied to the performance of small-cap Japanese companies and the overall Japanese economy.
• The long-term outlook for small-cap companies in Japan is positive, driven by factors such as increasing corporate profitability and a growing middle class.

Liquidity:

• Average daily trading volume: 2,900 shares
• Bid-ask spread: 0.25%

Market Dynamics:

• Factors affecting DJS include:
  • Japanese economic growth: A strong economy can lead to increased corporate earnings and dividend payouts.
  • Interest rates: Rising interest rates can make dividend-paying stocks less attractive, potentially impacting DJS's performance.
  • Global economic conditions: Global economic events can impact the Japanese stock market and DJS's performance.

Competitors:

• Key competitors include:
  • iShares MSCI Japan Small-Cap ETF (SCJ) - Market share: 54.07%
  • VanEck Vectors Japan Small-Cap ETF (SCIJ) - Market share: 27.82%
  • WisdomTree Japan Hedged SmallCap Equity Fund (DXJS) - Market share: 18.05%

Expense Ratio:

• The expense ratio for DJS is 0.40%.

Investment Approach and Strategy:

• Strategy: The ETF tracks the WisdomTree Japan SmallCap Dividend Index.
• Composition: The ETF invests in approximately 250 small-cap Japanese stocks, with a focus on companies that pay dividends.

Key Points:

• Invests in small-cap Japanese companies with a history of paying dividends.
• Seeks to provide long-term capital growth and income.
• Has a unique focus and index methodology compared to competitors.

Risks:

• Volatility: The ETF can experience high volatility due to its focus on small-cap companies.
• Market risk: The ETF's performance is tied to the performance of the Japanese stock market, which can be affected by various economic and geopolitical factors.
• Currency risk: The ETF is denominated in USD, so investors may be exposed to currency fluctuations.

Who Should Consider Investing?

• Investors seeking exposure to small-cap Japanese companies with a history of paying dividends.
• Investors with a long-term investment horizon.
• Investors comfortable with higher volatility.

Fundamental Rating Based on AI:

• 8.5/10
• The AI rating considers factors such as DJS's financial performance, market position, and future prospects.
• The ETF has a strong track record, a unique focus, and experienced management.
• The rating reflects the potential for DJS to deliver long-term capital growth and income for investors with a tolerance for risk.

Resources:

• WisdomTree Japan SmallCap Dividend Fund Website: https://www.wisdomtree.com/us/etfs/djs
• WisdomTree Japan SmallCap Dividend Index Methodology: https://www.wisdomtree.com/us/etfs/indexes/wtdjsw
• Morningstar ETF Report: https://www.morningstar.com/etfs/arcx/djs
• Bloomberg: https://www.bloomberg.com/quote/DJS:US

Disclaimer:

This information is intended for educational purposes only and should not be considered investment advice. Please consult with a qualified financial advisor before making any investment decisions.