The WisdomTree Europe Hedged Equity Fund (HEDJ) will commence trading today, but this is not a new ETF. Rather, HEDJ's Europe-only focus is a new twist on an ETF that debuted nearly three years ago, the WisdomTree International Hedged Equity Fund.

Earlier this month, WisdomTree Research Director Jeremy Schwartz announced HEDJ would slash its exposure to financial services names and countries outside of Europe to "provide exposure to European dividend-paying companies that derive more than 50% of their revenues from outside of Europe, while hedging the single euro currency."

The old version of HEDJ provided exposure to 13 currencies, including the euro. Countries such as the he U.K., Japan and Australia combined for over 48 percent of the old fund's weight.

The new HEDJ is a clear departure from its predecessor. At the currency level, the euro is basically the only name in this ETF with a weight of 99.8 percent, but that does not mean HEDJ is taking unnecessary currency risk.

Home to 77 stocks, HEDJ's top-10 holdings account for about 39 percent of the fund's weight, but that is not the most important statistic. On average, those 10 stocks derive 64 percent of total revenues from outside of Europe, according to WisdomTree data.

That top-10 lineup includes familiar names such as Anheuser-Busch InBev (BUD), Unilever (UN), Banco Santander (STD), SAP (SAP) and Sanofi (SNY).

"European risks are currently elevated, but from my perspective, the euro itself may be the most significant risk facing U.S. investors in Europe," Schwartz said. "While a declining euro can help exporters provide greater local currency returns, it can also eat away at the U.S. dollar returns for investors in the United States. One way to address this problem is to hedge the euro at the portfolio level. That way, investors can benefit from the companies that benefit from a declining currency without any currency drag."

HEDJ is also noticeably different at the sector level. In the fund's previous incarnation, financials accounted for 22 percent of the sector weight. In the new version, that sector has been relegated to the seventh spot. With an allocation of 21.6 percent, consumer staples are the largest sector weight followed by discretionary names at 20 percent. Industrial and health care names also receive double-digit weights.

Clearly, HEDJ is not trying to dodge the euro. The fund provides exposure to 11 countries, but aside from a scant 0.01 weight to Israel, HEDJ's constituents reside in the Eurozone. Germany and France, the region's two largest economies, combine for nearly half the fund's weight.

So at a time when many investors are avoiding Europe, HEDJ goes head first into the Eurozone. That might not be a bad idea. European stocks (as represented by the MSCI EMU Index) currently have half price-to-book ratio of S&P 500 constituents and a price-to-earnings ratio that is 20 percent lower, according to WisdomTree.

Those that believe it is time to buy when others are being fearful could find HEDJ attractive. Likewise, income investors will not mind a 30-day SEC yield of almost 4.1 percent. Or investors looking for compelling valuations might find HEDJ useful as well.

"I believe the current uncertainty has created attractive buying opportunities, as European equity prices relative to U.S. equity prices are near historic lows," Schwartz said.

For more on ETFs, click here.

(c) 2012 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.