For investors seeking momentum, WisdomTree Strong Dollar US Equity ETF (USSD – Free Report) is probably on radar now. The fund just hit a 52-week high and is up about 27.2% from its 52-week low price of $23.49/share.
But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed:
USSD in Focus
USSD seeks to provide exposure to U.S.-based companies that generate more than 80% revenues from the domestic market and are less vulnerable to a strengthening dollar. Holding 235 stocks in its basket, it is highly diversified across components with none holding more than 1.46% share. The fund has a definite tilt toward financials and consumer discretionary. It charges 33 basis points in annual fees.
Why the Move?
This ETF has been an area to watch lately given that the March rate hike is likely in the Fed meeting to be concluded later on the day. The increase in rate or the Fed’s hawkish outlook would further strengthen the U.S. dollar. However, a March rate hike has already been factored into the currency and thus could see some downside in the near future if the Fed doesn’t deliver above market expectation.
More Gains Ahead?
It seems that USSD will remain strong given a high weighted alpha of 24.70% and a low 20-day volatility of 13.48%. As a result, there is definitely still some promise for investors who want to ride on this surging ETF a little further.
