WisdomTree (WETF), fresh off its move from the pink sheets to the Nasdaq, announced net income of $0.7 million for the second quarter of 2011 on record assets under management (AUM) of nearly $13 billion. WisdomTree’s AUM more than doubled from the same period a year ago, and the swing to profit came after the company lost $1.9 million in the second quarter of 2010. WisdomTree also reported a profit in the first quarter of 2011.
Other highlights included:
- Net inflows were $1.7 billion for the second quarter, representing 5.8% of market share. WisdomTree’s AUM represents only about 1.2% of the ETF total, implying that the company’s growth rate outpaces the industry by a wide margin.
- Revenues increased 78.7% to a record $16.7 million in the second quarter.
- Approximately 79% of the $9.5 billion invested in WisdomTree’s 34 equity ETFs at the end of the second quarter were in funds that have outperformed their respective benchmarks since inception. Many of those equity ETFs are linked to earnings-weighted or dividend-weighted benchmarks, offering an alternative to traditional cap weighting.
WisdomTree is the only pure play publicly-traded ETF issuer, and the company’s operating results always provide insight to the profitability of ETF issuers and the outlook for the industry as a whole.
Said WisdomTree CEO Jonathan Steinberg:
I am very pleased with our accelerating topline growth as a result of higher asset levels and growing market share of net inflows in the second quarter, driven in part by continued product innovation and the diversification of our multi-asset class ETF platform. In fact, according to InvestmentNews WisdomTree launched the top two most successful ETFs of the first half of 2011 in terms of assets gathered.
WisdomTree rolled out the Asia Local Debt Fund (ALD) in March of this year. That actively managed fund offers exposure to debt of both developed and emerging Asian economies, giving investors an option for tapping into debt markets outside of the U.S. ALD already has accumulated more $500 million in AUM. Another of the company’s new 2011 additions has already been quite successful as well; the WisdomTree Managed Futures Strategy Fund (WDTI) has more than $200 million in assets. That ETF, also actively-managed, uses a quantitative, rules-based strategy designed to provide returns that correspond to the performance of the Diversified Trends Indicator (DTI). The DTI is a long/short managed futures strategy that incorporates a diversified group of 24 liquid components of exchange-traded commodity and financial futures contracts.
Vanguard’s Total International Stock ETF (VXUS), which debuted in January, was slightly larger than WDTI at the end of the second quarter. According to data maintained by the National Stock Exchange, VXUS also experienced slightly larger inflows during the first half of 2011.
WisdomTree also recently debuted a Real Return Fund (RRF) designed to combat inflation. Products in the company’s pipeline include several international bond ETFs (including a China-focused product) and a currency hedged Germany ETF. In August, WisdomTree expects to make some previously announced changes to existing equity and currency ETFs.
Disclosure: No positions at time of writing.
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