WisdomTree Japan Hedged Equity Fund (DXJ) Covered Calls

The WisdomTree Japan Hedged Equity Fund is an exchange-traded fund that tracks the WisdomTree Japan Hedged Equity Index. The fund provides exposure to the Japanese equity market while hedging against fluctuations between the Japanese yen and the U.S. dollar. By focusing on dividend-paying companies with a strong export tilt, the fund allows investors to participate in the growth of Japanese industry without the currency risk typically associated with international investing.

You can sell covered calls on WisdomTree Japan Hedged Equity Fund to lower risk and earn monthly income. Born To Sell's covered call screener gives you customized search capabilities across all possible covered calls but here are a couple of examples for DXJ (prices last updated Fri 4:16 PM ET):

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WisdomTree Japan Hedged Equity Fund (DXJ) is a specialized investment vehicle designed to provide exposure to Japanese equities while mitigating the impact of currency volatility. It is a popular tool for investors who believe Japanese corporations will benefit from a weakening yen or who simply wish to isolate equity returns from currency movements.

Investment Strategy and Holdings

The fund tracks the WisdomTree Japan Hedged Equity Index, which selects dividend-paying companies incorporated in Japan that derive a significant portion of their revenue from outside the country. By focusing on exporters, the fund captures the segment of the Japanese economy that typically thrives when the yen is weak. As of early 2026, top holdings include global industrial and automotive leaders that trade as liquid ADRs in the U.S., such as Toyota Motor, Sony Group, Mitsubishi UFJ Financial, and Honda Motor.

Competitive Landscape

DXJ is the leader in the currency-hedged Japan space, but it is frequently compared to unhedged alternatives. Its primary rival is the iShares MSCI Japan ETF, which leaves investors exposed to yen fluctuations. For a lower-cost unhedged version, the JPMorgan BetaBuilders Japan ETF is a notable peer. Within the hedged category, it competes with the iShares Currency Hedged MSCI Japan ETF. These funds are highly liquid and maintain active options markets for various hedging and income-generation strategies.

Strategic Outlook and Performance

The outlook for DXJ is closely tied to the monetary policy of the Bank of Japan and its impact on the yen-to-dollar exchange rate. Because the fund hedges its currency exposure using forward contracts, it historically outperforms unhedged funds like EWJ when the dollar is strengthening against the yen. Innovation in the fund lies in its dividend-weighting methodology, which provides a "value" tilt and ensures the portfolio is composed of profitable, cash-generating firms. As Japan continues to implement corporate governance reforms and enhance shareholder returns, DXJ remains a critical instrument for accessing the world’s third-largest economy.

Management utilizes a passive, rules-based approach to ensure the fund remains a precise reflection of its hedged benchmark. The fund is particularly attractive for covered call writers because it tends to have lower volatility than unhedged international funds, as the currency "noise" is removed from the price action. For long-term investors, DXJ provides a disciplined way to own the "best of Japan" while maintaining a stable U.S. dollar cost basis. This combination of export-oriented growth and currency protection makes it a staple for sophisticated global asset allocation.

Want more examples? DXD Covered Calls | DXLG Covered Calls