The end of a wild year brings with it an opportunity to reflect on the strategies and sectors that can be counted as winners in 2022. Investors had a lot to navigate this year, from Russia’s ongoing invasion of Ukraine to a one-two inflation and interest rate hike punch. ETFs responded, with several 2022 ETF winners focusing on current income from dividends, hedged Japan equities, and more.
Among those winners are the WisdomTree Japan Hedged Equity Fund (DXJ ), the WisdomTree US High Dividend Fund (DHS ), and the WisdomTree Japan Hedged SmallCap Equity Fund (DXJS ), which all outperformed their respective ETF Database categories and FactSet segment averages on a YTD basis.
Dividends’ ability to provide current income was popular this year and remains popular entering the new year, as investors look for ways to buoy their equity portfolios. Charging 38 basis points, DHS has offered a notable annual yield to investors on the lookout, with its 3.8% yield outperforming both of its peer categories, according to VettaFi. It was also in the top three dividend ETFs ranked by TD returns.
Hedged Japan equities, meanwhile, have also been a popular area. A hedged equity approach in this case involves using forward options to eliminate the impact of things like currency fluctuations as well as the ups and downs from the U.S. dollar’s impact on the Japanese yen. That aspect in particular has been important as the Fed continues to fight inflation.
DXJ and DXJS have returned 10.6% and 7.3% YTD, respectively, compared to -7.3% for the ETF Database category average for both. No slouches in their own right, DXJ has produced an annual dividend yield of 2.1%, with DXJS offering an annual dividend yield of 2.3%, both beating each category average.
While a lot of uncertainty looms in 2023, 2022 has lessons to offer to curious investors. There are always strategies winning their categories to consider, and with more volatility possibly in the cards, investors may want to keep an eye on 2022 ETF winners that could continue to play a role in their portfolios.