Back in January, I wrote an article in which I argued that shares of WisdomTree Investments (NASDAQ:WETF) were overvalued. I pointed out that much of the company's AUM growth in the past year--and by extension its sales, earnings, and margin growth--had largely been the result of two factors that were, more likely than not, unsustainable.
First, the company's Japan Hedged Equity Fund (NYSEARCA:DXJ) was wildly successful given the Bank of Japan's loose monetary policy. This policy sent Japanese stocks soaring while the value of the Yen plummeted. The Japan Hedged Equity Fund benefited from both phenomena, and as a result, investors jumped on board. The result was a 600% jump in that fund's AUM.
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