WisdomTree Japan SmallCap Dividend Fund is Still Underperforming

The global financial markets are still recovering from the effects of the pandemic, and this continues to affect the performances of exchange-traded funds (ETFs) tied to specific economies.

DFJ is Not a Strong ETF Right Now

The WisdomTree Japan SmallCap Dividend Fund (DFJ) has been underperforming in recent months. Over the past three months, DFJ has lost more than 8% of its value, making it one of the worst performers in its category.

The ETF has been around since 2006 and is a smart beta fund designed to provide investors with broad exposure to the Asia-Pacific (Developed) ETFs category of the market. The fund is managed by asset manager WisdomTree and has more than $250 million in assets under management. Hence, making it one of the average-sized ETFs in the Asia-Pacific (Developed) funds.

The WisdomTree Japan SmallCap Dividend Index tracks the performances of dividend-paying small capitalization companies in the Asian country. Once the leading 300 companies have been removed from the WisdomTree Japan Dividend Index, the others are chosen for inclusion in the index. Usually, companies in this index are weighted based on their annual cash dividends.

DFJ Could Dip Lower

At press time, DFJ is trading at $73.16, down by nearly 1% over the past 24 hours. The fund’s value could drop lower over the coming weeks and months unless there is a drastic improvement in the Japanese stock exchange. Year-to-date, the WisdomTree Japan SmallCap Dividend ETF has only gone up by less than 2%.

The MACD line is below the neutral zone, while its RSI of 52 shows that it is heading towards the oversold region. Meanwhile, DFJ is trading below its 50-day moving average of $74.15.

DFJ is one of the more expensive products in the space, with annual operating expenses of 0.58%. Furthermore, its 12-month trailing dividend yield comes in at 2.33%. If the WisdomTree Japan SmallCap Dividend Index Fund maintains its current momentum, its price could drop below the $70 mark over the coming days and weeks. DFJ has traded between $69.32 and $81.51 in this past 52-week period.