WisdomTree Announces Second Quarter 2011 Results

107% growth in AUM and 79% growth in revenues year over year

$1.7 billion in net inflows; 5.8% market share of industry flows

NEW YORK--(BUSINESS WIRE)-- WisdomTree Investments, Inc. (NASDAQ: WETF), an exchange-traded fund ("ETF") sponsor and asset manager, today reported net income of $0.7 million for the second quarter of 2011 as compared to a net loss of $1.9 million in the second quarter of 2010 and a net income of $0.2 million for the first quarter of 2011.

ETF assets under management ("AUM") reached a record $12.9 billion, more than doubling from June 30, 2010 and up 14.6% from March 31, 2011. Net inflows were a record $1.7 billion in the second quarter which represented 5.8% market share of industry inflows. Revenues increased 78.7% to a record $16.7 million compared to the second quarter of last year and up 15.0% from the first quarter of 2011. As of July 27, 2011, assets under management were $13.4 billion and net inflows so far for the third quarter were approximately $424 million.

WisdomTree CEO Jonathan Steinberg commented, "I am very pleased with our accelerating top-line 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."

Mr. Steinberg continued, "While 2010 represented our strongest year of inflows with $3.1 billion, as of today we have already surpassed this number, demonstrating consistent and accelerating organic growth. On the back of these strong results, we listed the Company's common stock on The NASDAQ Global Market under the new symbol 'WETF' on July 26."


Summary Operating and Financial Highlights

                         Three Months Ended               % Change From

                         Jun. 30,  Mar. 31,  Jun. 30,     Mar. 31,  Jun. 30,

Operating Highlights (in 2011      2011      2010         2011      2010
millions)

ETF AUM                  $12,934   $11,284   $6,240       15%       107%

ETF inflows              $1,699    $1,264    $121         34%       1,304%

Average ETF AUM          $12,062   $10,294   $6,760       17%       78%

Average ETF advisory fee 0.55%     0.56%     0.54%        (2%)      2%

Financial Highlights (in
thousands)

Revenues                 $16,716   $14,533   $9,355       15%       79%

Net income/(loss)        $689      $155      ($1,860)     345%      -




                                    Six Months Ended    % Change

                                    Jun. 30,  Jun. 30,  Jun. 30,

Operating Highlights (in millions)  2011      2010      2010

ETF AUM                             $12,934   $6,240    107%

ETF inflows                         $2,963    $703      321%

Average ETF AUM                     $11,340   $6,536    74%

Average ETF advisory fee            0.56%     0.54%     0.02%

Financial Highlights (in thousands)

Revenues                            $31,249   $18,069   73%

Net income/(loss)                   $844      ($5,452)  -



Recent Business Highlights

On July 26, 2011, the Company announced the listing of its common stock on The NASDAQ Global Market under new symbol "WETF."

On July 14, 2011, the Company announced the launch of the WisdomTree Global Real Return Fund.

On July 26, 2011, the Company filed registration statements for the WisdomTree Germany Hedged Equity Fund and the WisdomTree Asia Small Cap Fund.

On July 1, 2011, the Company filed registration statements for the WisdomTree Emerging Markets Inflation Protection Bond Fund, the WisdomTree Emerging Markets Corporate Bond Fund and the WisdomTree China Local Debt Fund.

On June 20, 2011, the Company announced that previously declared changes to seven equity ETFs became effective. As a result, the Company now has more direct commodity themed products.

Performance

Approximately 79% of the $9.5 billion invested in WisdomTree's 34 equity ETFs on June 30, 2011 were in funds that, since their respective inceptions, have outperformed their competitive benchmarks through that date. 22 of WisdomTree's 34 equity ETFs have outperformed their competitive benchmarks since inception and through June 30, 2011. For more information about WisdomTree ETFs including standardized performance, please click here or visit www.wisdomtree.com.

Second Quarter Financial Discussion

Revenues

Total revenues for the quarter increased 78.7% to a record $16.7 million as compared to the second quarter of 2010 and increased 15.0% from the first quarter of 2011. These increases were primarily due to higher average assets under management from strong net ETF inflows. Average ETF assets under management were $12.1 billion in the second quarter of 2011, as compared to $6.8 billion in the second quarter of 2010 and $10.3 billion in the first quarter of 2011. The average fee earned during the second quarter of 2011 decreased to 0.55% from 0.56% in the first quarter of 2011 due to a decrease in the fee charged for our India ETF from 0.88% to 0.83%. As compared to the second quarter of 2010, our average fee increased from 0.54% due to higher average assets and net inflows into our emerging market funds.

Expenses

Total expenses increased 42.9% to $16.0 million from $11.2 million in the second quarter of 2010 and increased 11.5% from $14.4 million in the first quarter of 2011. These increases were primarily due to higher fund related costs, marketing and advertising, and third party sharing arrangements.

    --  Compensation and benefits expense remained relatively unchanged compared
        to the second quarter of 2010 as higher headcount related expenses and
        incentive compensation due to strong inflows were offset by lower
        stock-based compensation expense. This expense decreased 11.6% compared
        to the first quarter of 2011 primarily due to lower stock-based
        compensation expense and lower payroll taxes associated with the vesting
        of restricted stock granted to employees as part of their 2010
        compensation, partly offset by higher accrued incentive compensation due
        to strong net inflows. Employee stock based compensation decreased to
        $0.8 million in the second quarter of 2011 from $1.7 million in the
        second of last year and $1.5 million in the first quarter of 2011 as
        equity awards granted in prior years become fully vested.
    --  Fund management and administration expenses increased 73.5% to $5.7
        million compared to the second quarter of 2010. Included in the second
        quarter of 2011 is a one-time charge of $0.7 million related to
        reimbursing the WisdomTree India ETF for excess fees collected by the
        Company as a result of overestimating the Company's operating expense
        recapture fees for the India ETF's fiscal year ended March 31, 2011.
        Higher average assets under management lead to an increase of $1.2
        million in portfolio management, fund administration, accounting and
        index licensing fees. Regulatory fees increased $0.2 million due to
        higher level of net inflows. Fund management and administration expenses
        increased 37.8% compared to the first quarter of this year due to the
        one-time charge discussed above as well as $0.5 million in higher
        portfolio management, fund administration, accounting and index
        licensing fees due to higher average assets under management. Also
        during the second quarter, the WisdomTree international equity funds
        rebalanced their portfolios leading to higher period transactional
        related fees of $0.2 million.
    --  Marketing and advertising expenses increased to $1.4 million in the
        second quarter compared to $0.4 million in the second quarter of 2010
        and $1.0 million in the first quarter of 2011. These increases were
        primarily due to higher levels of discretionary television and online
        advertising expenses to support our growth.
    --  Sales and business development expenses increased 22.4% to $0.9 million
        in the second quarter compared to the second quarter of 2010 and
        increased 22.6% compared to the first quarter of 2011. These increases
        were mainly due to higher levels of business activity.
    --  Professional and consulting fees increased 54.2% to $1.1 million in the
        second quarter of 2011 as compared to the second quarter of 2010
        primarily due to higher variable stock based compensation expense, which
        increased to $0.7 million from $0.2 million, due to a higher price in
        our common stock. These expenses decreased by 19.8% in the second
        quarter as compared to the first quarter of 2011 mainly due to lower
        fees associated with the preparation of our registration statement in
        connection with our exchange listing, which decreased to $0.1 million
        from $0.4 million.
    --  Third-party sharing arrangements expense increased to $1.5 million in
        the second quarter of 2011 compared to $0.6 million in the second
        quarter of last year and $1.1 million in the first quarter of this year.
        These increases were primarily due to profit sharing arrangements with
        the Bank of New York Mellon Corporation with respect to certain currency
        and fixed income ETFs as well as marketing fees paid to third parties
        due to higher average assets under management.
    --  Other expenses; occupancy, communication and equipment expenses; and
        depreciation and amortization expenses all had relatively small dollar
        value changes compared to both periods.

Year-to-Date Results

Total revenues increased $13.2 million or 72.9% to $31.2 million for the six months ended June 30, 2011 as compared to $18.1 million in 2010. This increase was primarily due to higher average assets under management, which increased 73.5% to $11.3 billion, which resulted from $3.0 billion of net ETF inflows, as well as higher average ETF advisory fees.

Total expenses increased $6.9 million or 29.3% to $30.4 million for the six months ended June 30, 2011 as compared to $23.5 million in 2010. This increase was primarily due to higher fund management and administration expenses due to higher average asset balances, higher third-party sharing arrangements due to higher asset balances in our currency and fixed income ETFs, and higher marketing and advertising and sales and business development expenses to support our growth.

Balance Sheet

As of June 30, 2011, WisdomTree had total assets of $32.6 million, which consisted primarily of cash and cash equivalents of $16.4 million and investments of $8.2 million. WisdomTree has no debt. There were approximately 115.6 million shares issued as of June 30, 2011. Fully diluted weighted average shares outstanding were approximately 134.9 million as of June 30, 2011.

Cautionary Statement Regarding Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "outlook," "objective," "may," "will," "expect," "intend," "estimate," "anticipate," "believe," "should," "plans," or "continue," or similar expressions suggesting future outcomes or events. Such forward-looking statements reflect our current expectations regarding future events and operating performance and speak only as of the date of this press release. Such forward-looking statements are based on a number of assumptions which may prove to be incorrect, including, but not limited to the assumption that the projects will operate and perform in accordance with our expectations. Forward-looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not or the times at or by which such performance or results will be achieved. A number of risks and other factors could cause actual results to differ materially from the results discussed in the forward-looking statements, including, but not limited to, the risks discussed below.

These risks include, without limitation:

    --  We have only a limited operating history.
    --  Difficult market conditions and declining prices of securities can
        adversely affect our business by reducing the market value of the assets
        we manage or causing customers to sell their fund shares and triggering
        redemptions.
    --  Volatility and disruption of the capital and credit markets, and adverse
        changes in the global economy, may significantly affect our results of
        operations and may put pressure on our financial results.
    --  The amount and mix of our assets under management, which impact revenue,
        are subject to significant fluctuations.
    --  Most of our assets under management are held in ETFs that invest in
        foreign securities and we have substantial exposure to foreign market
        conditions and we are subject to currency exchange rate risks.
    --  We derive a substantial portion of our revenues from products invested
        in emerging markets.
    --  We derive a substantial portion of our revenues from a limited number of
        products.

Other factors, such as general economic conditions, including currency exchange rate fluctuations, also may have an effect on the results of our operations. Many of these risks and uncertainties can affect our actual results and could cause our actual results to differ materially from those expressed or implied in any forward-looking statement made by us or on our behalf. For a more complete description of the risks noted above and other risks that could cause our actual results to materially differ from our current expectations, please see Item 1A. "Risk Factors" of Amendment 2 to our Registration Statement on Form 10 filed June 28, 2011.

These forward-looking statements are made as of the date of this press release and, except as expressly required by applicable law, we assume no obligation to update or revise them to reflect new events or circumstances.

Conference Call

WisdomTree will discuss its results and operational highlights during a conference call on Friday, July 29, 2011 at 9:00 a.m. ET. The call-in number will be (888) 713-4214 passcode 63305846. Anyone outside the U.S. or Canada should call (617) 213- 4866, passcode 63305846. The slides used during the presentation will be available at www.wisdomtree.com/ir. For those unable to join the conference call at the scheduled time, an audio replay will be available on www.wisdomtree.com/ir.

About WisdomTree

WisdomTree Investments, Inc. is a New York-based exchange-traded fund ("ETF") sponsor and asset manager. WisdomTree currently offers 47 ETFs across Equities, Currency Income, Fixed Income and Alternatives asset classes. WisdomTree also licenses its indexes to third parties for proprietary products and offers a platform to promote the use of WisdomTree ETFs in 401(k) plans. WisdomTree currently has approximately $13.4 billion in ETF assets under management. For more information, please visit www.wisdomtree.com.

WisdomTree(R) is the marketing name for WisdomTree Investments, Inc. and its wholly owned subsidiaries WisdomTree Asset Management, Inc. and WisdomTree Retirement Services, Inc. WisdomTree Asset Management, Inc. is a registered investment advisor and is the investment advisor to the WisdomTree Trust and the WisdomTree ETFs. The WisdomTree Trust is a registered open-end investment company. Each WisdomTree ETF is a series of the WisdomTree Trust. WisdomTree Retirement Services, Inc. supports the use of the WisdomTree ETFs in retirement plans by financial professionals.



WISDOMTREE INVESTMENTS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(Unaudited)

               Three Months Ended                     % Change From     For the Six Months Ended

               Jun. 30,     Mar. 31,     Jun. 30,     Mar. 31, Jun. 30, Jun. 30,     Jun. 30,     %

                 2011         2011         2010       2011     2010       2011         2010       Change

Revenues

ETF advisory   $ 16,514     $ 14,273     $ 9,129      15.7  %  80.9  %  $ 30,787     $ 17,596     75.0  %
fees

Other income     202          260          226        -22.3 %  -10.6 %    462          473        -2.3  %

Total revenues   16,716       14,533       9,355      15.0  %  78.7  %    31,249       18,069     72.9  %

Expenses

Compensation     4,610        5,217        4,600      -11.6 %  0.2   %    9,827        9,855      -0.3  %
and benefits

Fund
management and   5,736        4,162        3,306      37.8  %  73.5  %    9,898        6,703      47.7  %
administration

Marketing and    1,357        972          426        39.6  %  218.5 %    2,329        1,586      46.8  %
advertising

Sales and
business         913          745          746        22.6  %  22.4  %    1,658        1,206      37.5  %
development

Professional
and consulting   1,090        1,359        707        -19.8 %  54.2  %    2,449        1,731      41.5  %
fees

Occupancy,
communication    285          273          289        4.4   %  -1.4  %    558          556        0.4   %
and equipment

Depreciation
and              67           65           78         3.1   %  -14.1 %    132          155        -14.8 %
amortization

Third party
sharing          1,512        1,128        636        34.0  %  137.7 %    2,640        876        201.4 %
arrangements

Other            457          457          427        0.0   %  7.0   %    914          853        7.2   %

Total expenses   16,027       14,378       11,215     11.5  %  42.9  %    30,405       23,521     29.3  %

Income/(loss)
before           689          155          (1,860  )                      844          (5,452  )
provision for
income taxes

Provision for    317          71           --                             388          --
income taxes

Tax benefit      (317    )    (71     )    --                             (388    )    --

Net income/    $ 689        $ 155        $ (1,860  )                    $ 844        $ (5,452  )
(loss)

Net income/
(loss) per     $ 0.01       $ 0.00       $ (0.02   )                    $ 0.01       $ (0.05   )
share - basic

Net income/
(loss) per     $ 0.01       $ 0.00       $ (0.02   )                    $ 0.01       $ (0.05   )
share -
diluted

Weighted
average common   113,950      113,463      111,765                        113,708      111,295
shares - basic

Weighted
average common   134,887      134,470      111,765                        134,694      111,295
shares -
diluted




WISDOMTREE INVESTMENTS, INC.
CONSOLIDATED BALANCE SHEET
(in thousands, except per share amount)

                                              June 30,      December 31,

                                                2011          2010

                                              (Unaudited)

ASSETS

Current assets:

Cash and cash equivalents                     $ 16,386      $ 14,233

Investments                                     299           1,295

Accounts receivable                             5,732         4,825

Other current assets                            1,523         642

Total current assets                            23,940        20,995

Fixed assets, net                               679           756

Investments                                     7,876         7,300

Other noncurrent assets                         74            91

Total assets                                  $ 32,569      $ 29,142

LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES

Current liabilities:

Fund management and administration payable    $ 7,465       $ 5,714

Compensation and benefits payable               2,581         3,638

Accounts payable and other liabilities          2,423         2,263

Total current liabilities                       12,469        11,615

Other noncurrent liabilities                    220           292

Total liabilities                               12,689        11,907

STOCKHOLDERS' EQUITY

Common stock, par value $0.01; 250,000 shares
authorized:

issued: 115,630 and 115,291                     1,156         1,152

outstanding:114,112 and 113,132

Additional paid-in capital                      160,033       158,236

Accumulated deficit                             (141,309 )    (142,153 )

Total stockholders' equity                      19,880        17,235

Total liabilities and stockholders' equity    $ 32,569      $ 29,142




WISDOMTREE INVESTMENTS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)

                                                       Six Months Ended

                                                       June 30,    June 30,

                                                       2011        2010

Cash flows from operating activities

Net income/(loss)                                      $ 844       $ (5,452)

Adjustments to reconcile net income/(loss) to net cash

provided by/(used in) operating activities:

Depreciation, amortization and other                   132         155

Stock-based compensation                               3,624       4,561

Deferred rent                                          (77)        (47)

Accretion to interest income                           46          (9)

Net change in operating assets and liabilities:

Accounts receivable                                    (907)       (229)

Other assets                                           (864)       (1)

Fund management and administration payable             1,751       1,134

Compensation and benefits payable                      (1,057)     (651)

Accounts payable and other liabilities                 165         2

Net cash provided by/(used in) operating activities    3,657       (537)

Cash flows from investing activities

Purchase of fixed assets                               (55)        (48)

Purchase of investments                                (2,893)     (3,416)

Proceeds from the redemption of investments            3,267       5,056

Net cash provided by investing activities              319         1,592

Cash flows from financing activities

Shares repurchased                                     (1,823)     --

Proceeds from exercise of stock options                --          1

Net cash (used in)/provided by financing activities    (1,823)     1

Net increase in cash and cash equivalents              2,153       1,056

Cash and cash equivalents - beginning of period        14,233      11,476

Cash and cash equivalents - end of period              $ 16,386    $ 12,532

Supplemental disclosure of cash flow information

Cash paid for income taxes                             $ 11        $ 4

Non-cash investing and financing activities:

Cashless exercise of stock options                     $ 391       $ 55




 WisdomTree Investments, Inc.
 Key Operating Statistics (Unaudited)

                              Three Months Ended           For the Six Months
                                                           Ended

                              June      March 31,  June    June 30,   June 30,
                              30,                  30,

                              2011      2011       2010    2011       2010

 Total ETFs (in
 millions)

  Beginning of                11,284    9,891      6,713   9,891      5,979
  period assets

  Inflows/                    1,699     1,264      121     2,963      703
  (outflows)

  Market
  appreciation/               (49)      129        (594)   80         (442)
  (depreciation)

  End of period               12,934    11,284     6,240   12,934     6,240
  assets

  Average assets
  during the                  12,062    10,294     6,760   11,340     6,536
  period

 International Developed Equity ETFs (in
 millions)

  Beginning of                2,613     2,062      1,995   2,062      1,953
  period assets

  Inflows/                    33        481        (38)    514        (12)
  (outflows)

  Market
  appreciation/               (27)      70         (283)   43         (267)
  (depreciation)

  End of period               2,619     2,613      1,674   2,619      1,674
  assets

  Average assets
  during the                  2,596     2,217      1,907   2,407      2,038
  period

 Emerging Markets Equity ETFs (in
 millions)

  Beginning of                3,759     3,780      1,738   3,780      1,431
  period assets

  Inflows/                    344       60         106     404        336
  (outflows)

  Market
  appreciation/               (115)     (81)       (116)   (196)      (39)
  (depreciation)

  End of period               3,988     3,759      1,728   3,988      1,728
  assets

  Average assets
  during the                  3,863     3,617      1,763   3,740      1,536
  period

 International Sector Equity ETFs (in
 millions)

  Beginning of                252       249        228     249        358
  period assets

  Inflows/                    1         (7)        (1)     (6)        (125)
  (outflows)

  Market
  appreciation/               (5)       10         (37)    5          (43)
  (depreciation)

  End of period               248       252        190     248        190
  assets

  Average assets
  during the                  258       246        214     252        279
  period

 US Equity ETFs
 (in millions)

  Beginning of                2,218     2,057      1,468   2,057      1,330
  period assets

  Inflows/                    374       53         85      427        157
  (outflows)

  Market
  appreciation/               20        108        (147)   128        (81)
  (depreciation)

  End of period               2,612     2,218      1,406   2,612      1,406
  assets

  Average assets
  during the                  2,364     2,165      1,506   2,264      1,456
  period

 Currency ETFs
 (in millions)

  Beginning of                1,467     1,179      1,284   1,179      907
  period assets

  Inflows/                    382       271        (31)    653        347
  (outflows)

  Market
  appreciation/               47        17         (11)    64         (12)
  (depreciation)

  End of period               1,896     1,467      1,242   1,896      1,242
  assets

  Average assets
  during the                  1,677     1,335      1,370   1,506      1,227
  period

 International Fixed Income ETFs (in millions)

  Beginning of                902       564                564
  period assets

  Inflows/                    442       335                777
  (outflows)

  Market
  appreciation/               35        3                  38
  (depreciation)

  End of period               1,379     902                1,379
  assets

  Average assets
  during the                  1,195     679                1,094
  period

 Alternative Strategy ETFs (in
 millions)

  Beginning of                73        -                  -
  period assets

  Inflows/                    123       71                 194
  (outflows)

  Market
  appreciation/               (4)       2                  (2)
  (depreciation)

  End of period               192       73                 192
  assets

  Average assets
  during the                  109       35                 77
  period

 Average ETF assets during the period

  Emerging
  markets equity              32%       35%        26%     33%        24%
  ETFs

  International
  developed                   21%       22%        29%     21%        31%
  equity ETFs

  US equity ETFs              20%       21%        22%     20%        22%

  Currency ETFs               14%       13%        20%     13%        19%

  International
  fixed income                10%       7%                 10%
  ETFs

  International
  sector equity               2%        2%         3%      2%         4%
  ETFs

  Alternative                 1%        0%                 1%
  strategy ETFs

  Total                       100%      100%       100%    100%       100%

 Average ETF advisory fee during the
 period

  Alternative                 0.95%     0.95%              0.95%
  strategy ETFs

  Emerging
  markets equity              0.70%     0.74%      0.75%   0.70%      0.76%
  ETFs

  International
  sector equity               0.58%     0.58%      0.58%   0.58%      0.58%
  ETFs

  International
  fixed income                0.55%     0.55%              0.55%
  ETFs

  International
  developed                   0.54%     0.54%      0.55%   0.54%      0.55%
  equity ETFs

  Currency ETFs               0.49%     0.49%      0.48%   0.51%      0.47%

  US equity ETFs              0.34%     0.34%      0.34%   0.34%      0.34%

  Blended total               0.55%     0.56%      0.54%   0.56%      0.54%

 Number of ETFs - end of the period

  International
  developed                   14        14         14      14         14
  equity ETFs

  US equity ETFs              12        12         12      12         12

  Currency ETFs               9         9          8       9          8

  Emerging
  markets equity              4         4          4       4          4
  ETFs

  International
  sector equity               4         4          4       4          4
  ETFs

  International
  fixed income                2         2                  2
  ETFs

  Alternative                 1         1                  1
  strategy ETFs

  Total                       46        46         42      46         42

 Headcount                    61        61         54      61         54

 Note: Previously issued statistics may be restated due to trade
 adjustments




    Source: WisdomTree Investments, Inc.