A Message from WisdomTree’s President & COO
WisdomTree’s Momentum Continues into 2022
By Jarrett Lilien
We held our Q1 2022 earnings call this morning, and I’m so energized by what we are doing at WisdomTree that I wanted to take the opportunity to share a bit more – not just with the analysts and media who track earnings, but with you, our customers, our partners, our stockholders, and our broader network.
Q1 2022 marks our 6th consecutive quarter of organic growth, our AUM is at record highs, and we beat Street estimates on earnings. Even with global market volatility in Q1, which shows no signs of slowing down in Q2, WisdomTree has generated nearly $3 billion of net inflows across the firm year-to-date – a 12% annualized organic growth rate – and our global AUM recently crossed $80 billion for the first time in company history.
Results like these don’t happen by chance or overnight – they are the result of years of hard work and a relentless commitment to focusing on what we can control. In the past several years, WisdomTree:
- Adopted a more robust product innovation process to better define product-market fit and increase the odds of successful traction when we launch new ETFs.
- Acquired, rehabilitated, and injected new life into a European platform that is now resilient, successful, and a launchpad for future European and global growth.
- Created a managed models franchise, built upon best-in-class digital tools and solutions, that has become a key driver of organic growth.
And the future for WisdomTree is incredibly bright. I fully expect our organic growth to continue, and I am optimistic we will see accelerated growth for three key reasons:
- Our product positioning and performance have never been better. Over two-thirds of WisdomTree’s current AUM is levered to popular themes like inflation hedging, rising rates, and a rotation from growth to value. And with nearly 80% of our US AUM outperforming our peer averages, WisdomTree is well positioned to capture inflows.
- Our managed models franchise is entering its third year and its impact on flows is growing. We built this business from scratch in early 2020, and today we have over $2 billion in model AUM. In fact, in Q1, roughly 12% of our US ETF flows came from managed model strategies—up from 10% in the second half of 2021. We’ve won two material mandates already this year, we continue to gain traction at Merrill Lynch & Morgan Stanley, and we are positioned to better capture share in the RIA and Independent Broker-Dealer channels with the recent launch of WisdomTree Portfolio & Growth Solutions, which includes model trading services and other tools to help advisors scale their businesses. The beauty of the models business is that once you win advisor mindshare, flows are recurring in nature and stackable on top of our current inflow profile, and I see a long and lucrative growth runway ahead for WisdomTree.
- We are a first mover in Digital Assets – a natural extension of our core business with a massive addressable market. WisdomTree’s mission is simple: First, to bring crypto exposures into the current financial ecosystem through ETPs and Separate Accounts. And second, to bring mainstream financial assets into the digital ecosystem through blockchain-enabled funds and tokenized assets. We are already attacking the first side of this opportunity with crypto ETPs in Europe, a Bitcoin ETF filing in the US, and a successful launch of a crypto separate account strategy which allows US wealth advisors to bring clients diversified crypto exposures. On the flip side, WisdomTree is a first mover in bringing passive mainstream assets onto the blockchain, with products expected to be live this year. I believe this is a once in a life-time opportunity, significantly expanding our addressable market and aligning WisdomTree to the fastest growing segments within the asset management and broader financial services industries. The goal is for those products to eventually become available to any digital wallet, but our new direct-to-consumer WisdomTree Prime™ mobile application will provide an easy, accessible way to hold crypto next to mainstream assets with added utility like payments.
All in all, our product positioning and performance have never been better, our models business is gaining traction and we have first mover advantage and opportunity in digital assets. Similar to what we’ve done over the past decade, WisdomTree continues to invest not only for today’s growth, but for tomorrow’s as well – and I’m incredibly excited about the quarters and years ahead.
There are risks involved with investing, including possible loss of principal. Foreign investing involves currency, political and economic risk. Funds focusing on a single country, sector and/or funds that emphasize investments in smaller companies may experience greater price volatility. Investments in emerging markets, currency, fixed income and alternative investments include additional risks. Please see each ETF’s prospectus for discussion of risks.
Crypto assets, such as bitcoin and ether, are complex, generally exhibit extreme price volatility and unpredictability, and should be viewed as highly speculative assets. Crypto assets generally rely on blockchain technology, and blockchain technology is a relatively new and untested technology.
The WisdomTree Prime mobile phone application, capabilities, products, digital assets, digital wallet and other services are currently under development.
Past performance is not indicative of future results. This material contains the opinions of the author, which are subject to change, and should not to be considered or interpreted as a recommendation to participate in any particular trading strategy, or deemed to be an offer or sale of any investment product and it should not be relied on as such. There is no guarantee that any strategies discussed will work under all market conditions. This material represents an assessment of the market environment at a specific time and is not intended to be a forecast of future events or a guarantee of future results. This material should not be relied upon as research or investment advice regarding any security in particular. The user of this information assumes the entire risk of any use made of the information provided herein. Neither WisdomTree nor its affiliates, nor Foreside Fund Services, LLC, or its affiliates provide tax or legal advice. Investors seeking tax or legal advice should consult their tax or legal advisor. Unless expressly stated otherwise the opinions, interpretations or findings expressed herein do not necessarily represent the views of WisdomTree or any of its affiliates.