WisdomTree Announces Fourth Quarter and Year End 2010 Results

Company reports record AUM and record revenues; total AUM increased 19% from Q3 to $10.6 billion, up 60% for 2010

$1.3 billion net inflows for the fourth quarter; $3.1 billion net inflows for the year

Positive proforma operating income for the third consecutive quarter and full year

NEW YORK--(BUSINESS WIRE)-- WisdomTree (Pink Sheets: WSDT), an exchange-traded fund ("ETF") sponsor and asset manager, today reported a GAAP net loss of $0.6 million for the fourth quarter of 2010 as compared to a GAAP net loss of $5.0 million in the fourth quarter of 2009 and a GAAP net loss of $1.5 million for the third quarter of 2010. Proforma operating income (which excludes stock-based compensation and depreciation and amortization expenses) was $1.7 million in the fourth quarter of 2010 as compared to a proforma loss of $1.4 million in the fourth quarter of 2009 and proforma income of $0.5 million in the third quarter of 2010. For the full year, GAAP net loss was $7.5 million as compared to a GAAP net loss of $21.2 million in 2009. Proforma operating income for the full year was $1.5 million as compared to a proforma loss of $10.7 million in 2009.

WisdomTree CEO Jonathan Steinberg commented, "2010 was a very successful year for WisdomTree. We had very strong operating performance and reached significant milestones in our growth initiatives. We continued our product diversification efforts by launching our first international fixed income ETF and we now have offerings in equities, currencies, fixed income and alternatives. We increased our market share of industry inflows with back-to-back quarters of over $1 billion in inflows. We surpassed $10 billion in assets under management, controlled costs and achieved operating income during the year. All of these accomplishments have helped increase shareholder value."

Mr. Steinberg continued, "Building on these strong results, we will continue to focus on our corporate goals of achieving net income and listing our common stock on a national stock exchange. We will also continue to invest in growth initiatives to strengthen our position in the ETF industry."

Summary Operating and Financial Highlights


                            For the Three Months Ended       % Change From

                            Dec. 31,  Sept. 30,  Dec. 31,    Sept. 30,  Dec. 31,

Operating Highlights (in    2010      2010       2009        2010       2009
millions)

ETF AUM                     $9,891    $8,260     $5,979      20%        65%

Non-ETF AUM                 751       698        689         8%         9%

Total AUM                   $10,642   $8,958     $6,668      19%        60%

ETF inflows                 $1,271    $1,161     $911        10%        40%

Average ETF AUM             $9,104    $7,055     $5,439      29%        67%

Average ETF advisory fee    0.57%     0.56%      0.54%       2%         6%

Financial Highlights (in
thousands)

Revenues                    $13,413   $10,130    $7,731      32%        74%

Proforma operating income/  $1,725    $531       ($1,425)    225%       -221%
(loss)

Net loss                    ($580)    ($1,517)   ($5,032)    -62%       89%




                                    For the Year Ended December 31,

                                    2010      2009                   % Change

Operating Highlights(in millions)

ETF AUM                             $9,891    $5,979                 65%

Non ETF AUM                         751       689                    9%

Total AUM                           $10,642   $6,668                 60%

ETF inflows                         $3,135    $1,773                 77%

Average ETF AUM                     $7,308    $3,964                 84%

Average ETF advisory fee            0.56%     0.52%                  8%

Financial Highlights (in thousands)

Revenues                            $41,612   $22,095                88%

Proforma operating income/(loss)    $1,520    ($10,659)              na

Net loss                            ($7,549)  ($21,228)              64%



Recent Business Highlights

On January 5, 2011, the Company launched the WisdomTree Managed Futures Strategy Fund (WDTI).

On January 12, 2011, the Company surpassed the $10 billion milestone in total ETF assets under management.

Assets Under Management and Performance

As of December 31, 2010, assets under management ("AUM") managed by WisdomTree or against WisdomTree Indexes was $10.6 billion, up 60% from December 31, 2009 and up 19% from September 30, 2010. ETF AUM was $9.9 billion, up 65% from December 31, 2009 and up 20% from September 30, 2010. Net inflows into WisdomTree ETFs were $1.3 billion in the fourth quarter and $3.1 billion for 2010, primarily in emerging market ETFs.

Approximately 77% of the $8.1 billion invested in WisdomTree's 34 equity ETFs on December 31, 2010 were in funds that, since their respective inceptions, have outperformed their competitive benchmarks through that date. 19 of WisdomTree's 34 equity ETFs have outperformed their competitive benchmarks since inception and through December 31, 2010. For more information about WisdomTree ETFs including standardized performance, please click here or visit www.wisdomtree.com.

Fourth Quarter Financial Discussion

Revenues

Total revenues for the quarter increased 73.5% to a record $13.4 million as compared to the fourth quarter of 2009 and increased 32.4% from the third quarter of 2010. These increases were primarily due to higher average assets under management from strong net ETF inflows and positive market movement as well as higher average ETF advisory fees due to particularly strong inflows into our higher priced emerging market ETFs. Average ETF assets under management were $9.1 billion in the fourth quarter of 2010, as compared to $5.4 billion in the fourth quarter of 2009 and $7.1 billion in the third quarter of 2010.

Expenses

Total expenses increased 9.6% to $14.0 million from $12.8 million in the fourth quarter of 2009. This increase was primarily due to higher third party profit sharing and professional and consulting fees partly offset by lower other expenses. Excluding stock-based compensation and depreciation and amortization expenses, proforma operating expenses increased 27.7% to $11.7 million from $9.2 million in the fourth quarter of last year.

Compared to the third quarter of 2010, total expenses increased 20.1% from $11.6 million. This increase was primarily due to higher marketing and advertising, compensation and benefits, fund management administration expenses and professional and consulting fees. Excluding stock-based compensation and depreciation and amortization charges, proforma operating expenses increased 21.8% from $9.6 million in the third quarter.

    --  Compensation and benefits expense increased 3.3% to $4.9 million
        compared to the fourth quarter of 2009 and increased 12.0% compared to
        the third quarter of 2010. These increases were primarily due to higher
        accrued incentive compensation due to strong levels of ETF inflows as
        well as costs associated with increased headcount. Our headcount at the
        end of the fourth quarter of 2010 was 60 compared to 54 in the fourth
        quarter of 2009 and 56 at the end of the third quarter of 2010. Partly
        offsetting these increases was lower stock based compensation. Excluding
        stock based compensation, this expense increased 26.7% compared to the
        fourth quarter of 2009 and increased 20.0% from the third quarter of
        2010.
    --  Fund management and administration expenses increased 9.3% to $4.0
        million compared to the fourth quarter of 2009 and increased 12.5%
        compared to the third quarter of 2010. These increases were due to
        increased fund administrative and portfolio management expenses from
        higher average asset balances, particularly in the Company's emerging
        market funds.
    --  Marketing and advertising expenses increased 7.9% to $1.4 million in the
        fourth quarter compared to the fourth quarter of 2009 and increased
        86.6% compared to the third quarter of 2010. These increases were due to
        higher television and online advertising expenses partly offset by lower
        website related expenses.
    --  Professional and consulting fees increased 98.6% to $1.3 million in the
        fourth quarter compared to the fourth quarter of 2009 and 57.6% from the
        third quarter of 2010. These increases in both periods were primarily
        due to higher variable stock-based compensation expense as a result of
        an increase in the price of our common stock. Excluding stock based
        compensation, this expense increased to $0.5 million in the fourth
        quarter of 2010 compared to $0.1 million in the fourth quarter of 2009
        and $0.3 million in the third quarter of 2010. These increases were
        primarily due to higher consulting and legal related fees.

    --  Other expense decreased 63.6% to $0.5 million in the fourth quarter
        compared to the fourth quarter of 2009. The fourth quarter of 2009
        included a charge of $1.0 million as a result of the Company's final
        issuance of common stock to Treasury Equity LLC for satisfaction of
        certain conditions related to the Company's currency ETFs. This expense
        increased 15.1% compared to the third quarter of 2010 due to higher
        general administrative expenses.
    --  Third party sharing arrangements expense increased to $0.8 million in
        the fourth quarter of 2010 and increased 33.2% from $0.6 million in the
        third quarter of 2010. These increases were primarily due to higher
        average assets under management and revenues related to the Company's
        Currency and Fixed Income ETFs. Third party sharing arrangements
        represents the amount paid to (or received from) the Bank of New York
        Mellon, after netting revenues and direct costs, for its collaboration
        with the Company's Currency and Fixed Income ETFs.
    --  Stock-based compensation expense (which is included in the compensation
        and benefits, professional and consulting fees and other expenses
        discussion above) decreased 36.7% to $2.2 million compared to the fourth
        quarter of 2009. The fourth quarter of 2009 included a charge of $1.0
        million as a result of the Company's final issuance of common stock to
        Treasury Equity LLC for satisfaction of certain conditions related to
        the Company's currency ETFs. In addition, fixed stock based compensation
        expense decreased as equity awards granted in prior years to employees
        and directors become fully vested. This expense increased 13.1% compared
        to the third quarter of 2010 primarily due to higher variable expense
        due to the increase in the Company's stock price partly offset by lower
        fixed expense.
    --  Sales and business development expenses; occupancy, communication and
        equipment expenses; and depreciation and amortization expenses all had
        relatively small dollar value changes compared to both periods.

Full Year Results

Total revenues increased $19.5 million or 88.3% to $41.6 million for the year ended December 31, 2010 as compared to $22.1 million in 2009. This increase was primarily due to higher average assets under management from $3.1 billion of net ETF inflows, $778.1 million in positive market movement and higher average ETF advisory fees due to particularly strong inflows into our higher priced emerging market ETFs.

Total expenses increased $5.8 million or 13.5% to $49.2 million for the year ended December 31, 2010 as compared to $43.3 million in 2009. This increase was primarily due to higher third-party sharing arrangements and fund management and administration expenses due to higher average asset balances; higher incentive compensation due to our strong inflows; higher variable stock based compensation expense due to an increase in the price of the Company's common stock; higher corporate consulting and corporate legal related expenses; higher marketing and advertising and headcount increases to support our growth; and higher general administrative expenses. Partly offsetting these increases was a decrease in other expenses due to the issuance of common stock to Treasury Equity LLC in 2009 and lower fixed stock based compensation.

Balance Sheet

As of December 31, 2010, WisdomTree had total assets of $29.1 million, which consisted primarily of cash and cash equivalents of $14.2 million and investments of $8.6 million. WisdomTree has no debt. There were approximately 115.3 million shares issued as of December 31, 2010. Fully diluted shares issued and outstanding were approximately 136.7 million as of December 31, 2010.

WisdomTree will discuss its results and operational highlights during a conference call on Friday, February 4, 2011 at 9:00 a.m. ET. The call-in number will be (888) 713-4213 passcode 97364398. Anyone outside the U.S. or Canada should call (617) 213- 4865, passcode 97364398. 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(R) is a New York-based exchange-traded fund ("ETF") sponsor and asset manager. WisdomTree currently offers 45 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 $10.1 billion in ETF assets under management. For more information, please visit www.wisdomtree.com. WisdomTree 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)

                For the Three Months Ended       % Change From     For the Year Ended

                Dec. 31,   Sept. 30,  Dec. 31,   Sept.   Dec.31,   Dec. 31,   Dec.31,     %
                                                 30,

                2010       2010       2009       2010    2009      2010       2009        Change

                                                                              (Audited)

Revenues

Advisory fees   $ 13,111   $ 9,860    $ 7,428    33.0%   76.5%     $ 40,567   $ 20,812    94.9%

Other income      302        270        303      11.9%   -0.3%       1,045      1,283     -18.6%

Total revenues    13,413     10,130     7,731    32.4%   73.5%       41,612     22,095    88.3%

Expenses

Compensation      4,933      4,405      4,775    12.0%   3.3%        19,193     18,943    1.3%
and benefits

Fund
management and    4,014      3,569      3,674    12.5%   9.3%        14,286     13,387    6.7%
administration

Marketing and     1,390      745        1,288    86.6%   7.9%        3,721      2,762     34.7%
advertising

Sales and
business          758        766        813      -1.0%   -6.8%       2,730      2,495     9.4%
development

Professional
and consulting    1,253      795        631      57.6%   98.6%       3,779      1,780     112.3%
fees

Occupancy,
communication     289        273        249      5.9%    16.1%       1,118      1,087     2.9%
and equipment

Depreciation
and               79         80         88       -1.3%   -10.2%      314        360       -12.8%
amortization

Other             466        405        1,281    15.1%   -63.6%      1,724      2,420     -28.8%

Third party
sharing           811        609        (36)     33.2%   -2352.8%    2,296      89        2479.8%
arrangements

Total expenses    13,993     11,647     12,763   20.1%   9.6%        49,161     43,323    13.5%

Net loss        $ (580)    $ (1,517)  $ (5,032)  -61.8%  -88.5%    $ (7,549)  $ (21,228)  -64.4%

Net loss per
share - basic   $ (0.01)   $ (0.01)   $ (0.05)                     $ (0.07)   $ (0.21)
and diluted

Weighted
average common    112,889    112,424    108,374                      111,981    103,397
shares - basic
and diluted





WISDOMTREE INVESTMENTS, INC.

NON-GAAP CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands)

(Unaudited)

                For the Three Months Ended      % Change From     For the Year Ended

                Dec. 31,  Sept. 30,  Dec.31,    Sept.   Dec.31,   Dec. 31,   Dec.31,     %
                                                30,

                2010      2010       2009       2010    2009      2010       2009        Change

Revenues

Advisory fees   $ 13,111  $ 9,860    $ 7,428    33.0%   76.5%     $ 40,567   $ 20,812    94.9%

Other income      302       270        303      11.9%   -0.3%       1,045      1,283     -18.6%

Total revenues    13,413    10,130     7,731    32.4%   73.5%       41,612     22,095    88.3%

Operating
expenses

Compensation      3,557     2,963      2,807    20.0%   26.7%       12,648     11,026    14.7%
and benefits

Fund
management and    4,014     3,569      3,674    12.5%   9.3%        14,286     13,387    6.7%
administration

Marketing and     1,390     745        1,288    86.6%   7.9%        3,721      2,762     34.7%
advertising

Sales and
business          758       766        813      -1.0%   -6.8%       2,730      2,495     9.4%
development

Professional
and consulting    453       319        130      42.0%   248.5%      1,769      688       157.1%
fees

Occupancy,
communication     289       273        249      5.9%    16.1%       1,118      1,087     2.9%
and equipment

Other             416       355        231      17.2%   80.1%       1,524      1,220     24.9%

Third party
sharing           811       609        (36)     33.2%   -2352.8%    2,296      89        2479.8%
arrangements

Total
operating         11,688    9,599      9,156    21.8%   27.7%       40,092     32,754    22.4%
expenses

Proforma
operating         1,725     531        (1,425)  224.9%  -221.1%     1,520      (10,659)  -114.3%
income /
(loss)

Stock-based       2,226     1,968      3,519    13.1%   -36.7%      8,755      10,209    -14.2%
compensation

Depreciation
and               79        80         88       -1.3%   -10.2%      314        360       -12.8%
amortization

Net loss        $ (580)   $ (1,517)  $ (5,032)  -61.8%  -88.5%    $ (7,549)  $ (21,228)  -64.4%




WISDOMTREE INVESTMENTS, INC.

CONSOLIDATED BALANCE SHEET

(in thousands, except per share amount)

                                               December 31,  December 31,

                                               2010          2009

                                               (Unaudited)

ASSETS

Current assets:

Cash and cash equivalents                      $ 14,233      $ 11,476

Investments                                      1,295         2,627

Accounts receivable                              4,825         2,884

Other current assets                             642           961

Total current assets                             20,995        17,948

Fixed assets, net                                756           977

Investments                                      7,300         6,693

Other noncurrent assets                          91            85

Total assets                                   $ 29,142      $ 25,703

LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES

Current liabilities:

Fund management and administration payable     $ 5,714       $ 5,055

Compensation and benefits payable                3,638         2,587

Accounts payable and other liabilities           2,263         1,603

Total current liabilities                        11,615        9,245

Other noncurrent liabilities                     292           430

Total liabilities                                11,907        9,675

STOCKHOLDERS' EQUITY

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

issued: 115,291 and 114,535                      1,152         1,145

outstanding:113,132 and 110,106

Additional paid-in capital                       158,236       149,487

Accumulated deficit                              (142,153 )    (134,604 )

Total stockholders' equity                       17,235        16,028

Total liabilities and stockholders' equity     $ 29,142      $ 25,703




 WISDOMTREE INVESTMENTS, INC.

 CONSOLIDATED STATEMENTS OF CASH FLOWS

 (in thousands)

 (Unaudited)

                                                  For the Year Ended

                                                  December 31,   December 31,

                                                  2010           2009

Cash flows from operating activities

 Net loss                                         $ (7,549 )     $ (21,228 )

 Adjustments to reconcile net loss to net cash
 provided by (used in) operating activities:

 Depreciation, amortization and other               314            583

 Stock-based compensation                           8,755          10,209

 Deferred rent                                      (105   )       (185    )

 Accretion to interest income                       4              (68     )

 Net change in operating assets and liabilities:

 Accounts receivable                                (1,941 )       (1,354  )

 Other assets                                       313            (45     )

 Fund management and administration payable         659            (3,911  )

 Compensation and benefits payable                  1,051          575

 Accounts payable and other liabilities             627            397

 Net cash provided by (used in) operating           2,128          (15,027 )
 activities

Cash flows from investing activities

 Purchase of fixed assets                           (93    )       (295    )

 Purchase of investments                            (6,935 )       (7,290  )

 Proceeds from the redemption of investments        7,656          15,825

 Net cash provided by investing activities          628            8,240

Cash flows from financing activities

 Net proceeds from sale of common stock                            4,988

 Proceeds from exercise of stock options            1              --

 Net cash provided by financing activities          1              4,988

Net increase (decrease) in cash and cash            2,757          (1,799  )
equivalents

Cash and cash equivalents - beginning of period     11,476         13,275

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

Supplemental disclosure of cash flow information

 Cash paid for income taxes                       $ 11           $ 3

 Non-cash investing and financing activities:

 Cashless exercise of stock options               $ 517          $ 81





WisdomTree Investments, Inc.

Key Operating Statistics (Unaudited)

                  For the Three Months Ended               For the Year Ended

                  December 31,  September    December      December 31,  December
                                30,          31,                         31,

                  2010          2010         2009          2010          2009

Total assets
under
management (in
thousands)

 ETFs             9,891,219     8,260,293    5,978,605     9,891,219     5,978,605

 Non-ETFs         750,964       698,032      689,103       750,964       689,103

 End of period    10,642,183    8,958,325    6,667,708     10,642,183    6,667,708
 assets

Total ETFs (in
thousands)

 Beginning of     8,260,293     6,240,452    4,901,755     5,978,605     3,180,133
 period assets

 Inflows/         1,270,563     1,160,726    910,989       3,134,509     1,772,764
 (outflows)

 Market
 appreciation/    360,363       859,115      165,861       778,105       1,025,708
 (depreciation)

 End of period    9,891,219     8,260,293    5,978,605     9,891,219     5,978,605
 assets

 Average assets
 during the       9,103,556     7,055,086    5,438,756     7,307,577     3,963,943
 period

International
Developed
Markets ETFs
(in thousands)

 Beginning of     1,900,133     1,674,335    1,794,248     1,953,363     1,339,002
 period assets

 Inflows/         61,020        (19,740   )  135,791       29,093        281,282
 (outflows)

 Market
 appreciation/    101,485       245,538      23,324        80,182        333,079
 (depreciation)

 End of period    2,062,638     1,900,133    1,953,363     2,062,638     1,953,363
 assets

 Average assets
 during the       1,981,025     1,794,013    1,896,356     1,901,919     1,470,998
 period

International
Emerging
Markets ETFs
(in thousands)

 Beginning of     2,796,264     1,728,388    1,118,413     1,430,965     384,242
 period assets

 Inflows/         868,384       706,844      232,308       1,911,259     649,847
 (outflows)

 Market
 appreciation/    115,241       361,032      80,244        437,665       396,876
 (depreciation)

 End of period    3,779,889     2,796,264    1,430,965     3,779,889     1,430,965
 assets

 Average assets
 during the       3,341,884     2,152,550    1,297,459     2,202,169     793,044
 period

International
Sector ETFs (in
thousands)

 Beginning of     247,026       189,876      322,145       358,187       246,501
 period assets

 Inflows/         (11,094    )  19,623       34,154        (116,657   )  58,413
 (outflows)

 Market
 appreciation/    13,149        37,527       1,888         7,551         53,273
 (depreciation)

 End of period    249,081       247,026      358,187       249,081       358,187
 assets

 Average assets
 during the       257,922       217,668      338,336       258,690       257,344
 period

US ETFs (in
thousands)

 Beginning of     1,778,776     1,406,331    1,271,172     1,329,597     986,568
 period assets

 Inflows/         118,313       211,148      (2,514    )   486,572       136,949
 (outflows)

 Market
 appreciation/    159,795       161,297      60,939        240,715       206,080
 (depreciation)

 End of period    2,056,884     1,778,776    1,329,597     2,056,884     1,329,597
 assets

 Average assets
 during the       1,916,521     1,540,154    1,272,642     1,592,141     1,083,545
 period

Currency/Fixed
Income ETFs (in
thousands)

 Beginning of     1,538,094     1,241,522    395,777       906,493       223,820
 period assets

 Inflows/         233,940       242,851      511,250       824,242       646,273
 (outflows)

 Market
 appreciation/    (29,307    )  53,721       (534      )   11,992        36,400
 (depreciation)

 End of period    1,742,727     1,538,094    906,493       1,742,727     906,493
 assets

 Average assets
 during the       1,606,204     1,350,701    633,963       1,352,658     359,012
 period

Average ETF
assets during
the period

 International
 developed        22         %  25        %  35        %   26         %  37        %
 markets ETFs

 International
 emerging         37         %  31        %  24        %   30         %  20        %
 markets ETFs

 International    3          %  3         %  6         %   4          %  7         %
 sector ETFs

 US ETFs          21         %  22        %  23        %   22         %  27        %

 Currency/Fixed   17         %  19        %  12        %   18         %  9         %
 Income ETFs

 Total            100        %  100       %  100       %   100        %  100       %

Average ETF
advisory fee
during the
period

 International
 developed        0.55       %  0.55      %  0.55      %   0.55       %  0.55      %
 markets ETFs

 International
 emerging         0.76       %  0.76      %  0.76      %   0.76       %  0.76      %
 markets ETFs

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

 US ETFs          0.34       %  0.34      %  0.34      %   0.34       %  0.33      %

 Currency/Fixed   0.50       %  0.49      %  0.46      %   0.49       %  0.44      %
 Income ETFs

 Blended total    0.57       %  0.56      %  0.54      %   0.56       %  0.52      %

Number of ETFs
- end of the
period

 International
 developed        14            14           15            14            15
 markets ETFs

 International
 emerging         4             4            4             4             4
 markets ETFs

 International    4             4            11            4             11
 sector ETFs

 US ETFs          12            12           13            12            13

 Currency/Fixed   10            10           9             10            9
 Income ETFs

 Total            44            44           52            44            52

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




GAAP to Non-GAAP Reconciliation

In an effort to provide additional information regarding our results as
determined by GAAP, we also disclose certain non-GAAP information which we
believe provides useful and meaningful information. Our management reviews this
non-GAAP financial measurement when evaluating our financial performance and
results of operations; therefore, we believe it is useful to provide information
with respect to these non-GAAP measurements so as to share this perspective of
management. Non-GAAP measurements do not have any standardized meaning and are
therefore unlikely to be comparable to similar measures presented by other
companies. These non-GAAP financial measures should be considered in the context
with our GAAP results.

We have disclosed our results excluding certain non-operating items. We consider
stock-based compensation, depreciation and amortization and interest and
investment income as non-operating items. Management excludes these costs when
measuring our financial performance as they are non-cash charges or not directly
related to our business of being an index developer and ETF sponsor. As the
company is currently incurring net losses, management focuses on its cash
related expenses of being an index developer and ETF sponsor in measuring the
financial health of its business and making related decisions. However,
stock-based compensation has been and will continue to be for the foreseeable
future, a significant recurring expense in our business and stock-based
compensation is an important part of our employees' compensation and impacts
their performance.




WISDOMTREE INVESTMENTS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

GAAP to NON-GAAP RECONCILIATION

(in thousands)

(Unaudited)

                    For the Three Months Ended           For the Year Ended

                    Dec. 31,    Sept. 30,   Dec.31,      Dec. 31,    Dec.31,

                    2010        2010        2009         2010        2009

GAAP expenses as    $ 13,993    $ 11,647    $ 12,763     $ 49,161    $ 43,323
reported

Less stock-based
compensation
included in

Compensation and      (1,376 )    (1,442 )    (1,968 )     (6,545 )    (7,917  )
benefits

Professional and      (800   )    (476   )    (501   )     (2,010 )    (1,092  )
consulting fees

Other                 (50    )    (50    )    (1,050 )     (200   )    (1,200  )

Total stock-based
compensation          (2,226 )    (1,968 )    (3,519 )     (8,755 )    (10,209 )
expenses

Less depreciation     (79    )    (80    )    (88    )     (314   )    (360    )
and amortization

Proforma operating  $ 11,688    $ 9,599     $ 9,156      $ 40,092    $ 32,754
expenses

GAAP net loss, as   $ (580   )  $ (1,517 )  $ (5,032 )   $ (7,549 )  $ (21,228 )
reported

Add back
stock-based           2,226       1,968       3,519        8,755       10,209
compensation

Add back
depreciation and      79          80          88           314         360
amortization

Proforma operating  $ 1,725     $ 531       $ (1,425 )   $ 1,520     $ (10,659 )
income / (loss)



Forward Looking Statements

Statements in this Press Release regarding WisdomTree Investments, Inc. that are not historical facts are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Readers are cautioned not to place undue reliance on any such forward-looking statements, each of which speaks only as of the date made. We have no obligation to publicly release the result of any revisions which may be made to any forward-looking statements to reflect unanticipated events or circumstances occurring after the date of such statements. Forward-looking statements are subject to known and unknown risks, uncertainties and other important factors, some of which are listed below, that could cause actual results or outcomes to differ materially from any future results or outcomes expressed or implied by such forward-looking statements. In assessing the forward-looking statements contained herein, readers are urged to carefully read the following risks and considerations:

    --  Our ability to become profitable is dependent upon our ability to
        increase our assets under management and to control our expenses.
    --  Changes in the equity markets have a direct impact on our assets under
        management. A downturn in the equity markets can result in a significant
        reduction in assets under management, which, in turn, directly reduces
        our revenues.
    --  The mix of our assets under management could be subject to significant
        fluctuations and could adversely affect our revenues.
    --  Poor investment performance of our ETFs is likely to lead to a reduction
        in our assets under management and a reduction in our revenues.
    --  If our reputation is harmed we could suffer losses in revenue.
    --  The asset management industry is highly competitive and most of our
        competitors are larger companies with greater resources.
    --  We rely very heavily on third-party vendors, such as BNY Mellon,
        Standard & Poor's, and Bloomberg, to provide us with services that are
        very important to our business. If any of those vendors decided to
        terminate their relationship with us, we might experience a disruption
        in our ability to do business while we retain an alternative vendor.
    --  A failure in our operational systems or infrastructure, or those of the
        third-party vendors, could disrupt our operations, damage our
        reputation, and reduce our revenues.
    --  Our business is subject to extensive regulation, and compliance failures
        and changes in regulation could adversely affect us.
    --  We depend on key personnel and the loss of such personnel could disrupt
        our ability to develop new product and conduct our business.
    --  Our principal stockholders, including our directors and officers,
        control a large percentage of our shares of common stock and can control
        our corporate actions.

Past performance is no indication of future results.


    Source: WisdomTree Investments, Inc.