WisdomTree Reports Monthly Metrics for December 2023

Rhea-AI Summary

WisdomTree, a global financial innovator (NYSE: WT), achieved a new record and key milestone with over $100 billion of AUM. They finished 2023 with over $10 billion of net inflows and a ~13% pace of organic growth. However, they also experienced $765 million of net outflows in December, primarily driven by a risk-on re-allocation out of the U.S. Floating Rate Treasury Fund and profit taking in commodity products. Despite net outflows of $254 million during the quarter, they achieved milestone AUM of over $100 billion and over $10 billion of year-to-date net inflows. WisdomTree Prime™ expanded its product lineup with the introduction of three digital asset allocation funds that leverage insights from Professor Jeremy Siegel.

Positive

• Achieving a new milestone with over $100 billion of AUM
• Finishing 2023 with over $10 billion of net inflows and a ~13% pace of organic growth
• Expanding product lineup with the introduction of three digital asset allocation funds

Negative

• Experiencing $765 million of net outflows in December
• Net outflows of $254 million during the quarter

Financial Analyst

WisdomTree's announcement of achieving over $100 billion in AUM is a significant milestone, demonstrating the firm's capacity to attract and manage a substantial volume of assets. This is indicative of investor confidence and the firm's competitive positioning within the asset management industry. A key factor in this achievement is the ~13% pace of organic growth in net inflows, which is notably higher than the industry average, suggesting WisdomTree's product offerings and management strategies are well-aligned with market demand.

The firm's strategic move to introduce digital asset allocation funds, possibly reflecting an adaptation to evolving investor interests towards digital assets, may further diversify their revenue streams and enhance their appeal to a broader investor base. However, the net outflows in December, largely from the U.S. Floating Rate Treasury Fund, raise questions about the sustainability of inflows and reliance on higher fee products to maintain revenue growth. The shift towards risk-on re-allocation and profit-taking behavior in commodity products also highlights the dynamic nature of investor sentiment and market trends.

The detailed flow data by asset class sheds light on the varied performance across different segments. For instance, the robust inflows into U.S. Equity and Emerging Market Equity contrast with the outflows from Fixed Income and Commodity & Currency, suggesting a rebalancing of portfolios in response to market conditions. The AUM Rollforward table provides a granular view of the flow dynamics, with the negative flow rate in Fixed Income and Commodity & Currency being offset by positive flows in other areas, reflecting a nuanced asset allocation strategy among investors.

Market Research Analyst

WisdomTree's diversification into digital asset funds, leveraging insights from a renowned academic like Professor Jeremy Siegel, could be a strategic move to capitalize on the growing interest in digital assets and blockchain technology. This expansion could potentially position WisdomTree as a pioneer among traditional asset managers venturing into the digital space. The decision to introduce these funds aligns with current market trends where investors are increasingly looking for innovative investment solutions.

Furthermore, the blended total average fee rate of 36 basis points (bps) provides insight into the company's pricing strategy. It is relatively moderate when compared to some active management fees, which may contribute to the attractiveness of WisdomTree's funds. However, it is crucial to monitor if this fee rate will be sustainable in the long run, especially as the industry faces downward pressure on fees amidst the rise of low-cost passive investment vehicles.

It is also important to consider the potential impact of market volatility on WisdomTree's AUM. While the firm has experienced a positive market move in the reported period, future market conditions could affect asset valuations and investor behavior, potentially leading to increased redemptions or reduced inflow rates. The ability of WisdomTree to maintain its organic growth amidst these challenges will be critical to its continued success.

Economist

The financial data from WisdomTree provides a microcosm of broader economic trends, particularly the investor shift towards emerging markets, which may reflect a search for yield in a potentially low-interest rate environment globally. The 20.7% annualized flow rate into Emerging Market Equity suggests a positive outlook on these economies and a diversification strategy away from developed markets.

Moreover, the negative flow rate in Fixed Income at -41.4% MTD could be interpreted as a reaction to expectations of interest rate changes, where investors might be reallocating to asset classes with higher yield potential. The outflows from the U.S. Floating Rate Treasury Fund may also signify concerns over interest rate risks, as these funds are typically sought after for their lower interest rate risk profile.

The inflows into higher fee products, despite overall net outflows, could indicate a shift in investor preference towards more specialized or actively managed funds, which could carry higher fees but also promise higher returns or better risk management. This trend may have implications for the asset management industry, suggesting a possible shift in the value proposition that investors are seeking from their investment managers.

Achieved New Record & Key Milestone with over $100 billion of AUM

Finished 2023 with over $10 billion of net inflows and posting a ~13% pace of organic growth

NEW YORK--(BUSINESS WIRE)-- WisdomTree, Inc. (NYSE: WT), a global financial innovator, today released monthly metrics for December 2023, including assets under management (AUM) and flow data by asset class.

Monthly Commentary:

• $765 million of net outflows in December driven primarily by a risk-on re-allocation out of the U.S. Floating Rate Treasury Fund and profit taking in commodity products
• Organic revenue growth in Q4 2023 notwithstanding net outflows of $254 million during the quarter, as inflows into higher fee products offset outflows from lower fee products
• Achieved milestone AUM of over $100 billion, over $10 billion of year-to-date net inflows and WisdomTree’s ~13% pace of 2023 net inflows is best-in-class relative to our publicly traded asset manager peers
• WisdomTree Prime™ expanded its product lineup with the introduction of three digital asset allocation funds that leverage insights from Professor Jeremy Siegel

As of December 31, 2023	AUM Rollforward ($ in millions)			Annualized Flow Rate
	MTD	QTD	YTD	MTD	QTD	YTD
Beginning of Period Total AUM	$98,156	$93,735	$81,986
Total Net Flows
U.S. Equity	$269	$487	$1,616	11.6%	7.5%	6.7%
International Dev. Mkt Equity	$16	$9	$2,851	1.3%	0.3%	28.0%
Emerging Market Equity	$268	$412	$1,679	31.6%	17.1%	20.7%
Fixed Income	($771)	($715)	$5,940	(41.4%)	(13.0%)	38.9%
Commodity & Currency	($552)	($449)	($1,774)	(29.8%)	(8.7%)	(8.0%)
Alternatives	$29	$32	$40	102.4%	37.6%	12.8%
Cryptocurrency	$10	$28	$50	33.3%	45.4%	37.0%
Leveraged & Inverse	($33)	($59)	($4)	(20.9%)	(13.1%)	(0.2%)
Total Net Flows	($765)	($254)	$10,396	(9.2%)	(1.1%)	12.7%
Market Move	$2,733	$6,644	$7,742
Current Total AUM	$100,125	$100,125	$100,125
Average Total AUM	$98,875	$96,557	$92,895
Blended Total Average Fee Rate		36 bps	36 bps

Source: https://ir.wisdomtree.com/

Please visit https://ir.wisdomtree.com/ for downloadable spreadsheets containing detailed AUM and flow data by asset class and fund broken out by daily, monthly, quarterly and annual timeframes.

About WisdomTree

WisdomTree is a global financial innovator, offering a well-diversified suite of exchange-traded products (ETPs), models, solutions and products leveraging blockchain-enabled technology. We empower investors and consumers to shape their future and support financial professionals to better serve their clients and grow their businesses. WisdomTree is leveraging the latest financial infrastructure to create products that provide access, transparency and an enhanced user experience. Building on our heritage of innovation, we are also developing and have launched next-generation digital products, services and structures, including digital or blockchain-enabled mutual funds and tokenized assets, as well as our blockchain-native digital wallet, WisdomTree Prime™.*

*The WisdomTree Prime digital wallet and digital asset services are made available through WisdomTree Digital Movement, Inc. (NMLS ID: 2372500) in select U.S. jurisdictions and may be limited where prohibited by law. Visit https://www.wisdomtreeprime.com or the WisdomTree Prime mobile app for more information.

WisdomTree currently has approximately $99.5 billion in assets under management globally.

For more information about WisdomTree and WisdomTree Prime™, visit: https://www.wisdomtree.com.

Please visit us on X, formerly known as Twitter, at @WisdomTreeNews.

WisdomTree® is the marketing name for WisdomTree, Inc. and its subsidiaries worldwide.

PRODUCTS AND SERVICES AVAILABLE VIA WISDOMTREE PRIME:
NOT FDIC INSURED | NO BANK GUARANTEE | NOT A BANK DEPOSIT | MAY LOSE VALUE | NOT SIPC PROTECTED | NOT INSURED BY ANY GOVERNMENT AGENCY

The products and services available through the WisdomTree Prime app are not endorsed, indemnified or guaranteed by any regulatory agency.

Cautionary Statement Regarding Forward-Looking Statements

This press release may contain a number of “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements about our ability to achieve our financial and business plans, goals and objectives and drive stockholder value, including with respect to our ability to successfully implement our strategy relating to WisdomTree Prime™, our ability to continue to make achievements in AUM, levels of net inflows and other risk factors discussed from time to time in WisdomTree’s filings with the Securities and Exchange Commission (“SEC”), including those factors discussed under the caption “Risk Factors” in our most recent annual report on Form 10-K, filed with the SEC on February 28, 2023, and in subsequent reports filed with or furnished to the SEC. These forward-looking statements are based on WisdomTree’s management’s current expectations, estimates, projections and beliefs, as well as a number of assumptions concerning future events. These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside WisdomTree’s management’s control, that could cause actual results to differ materially from the results discussed in the forward-looking statements. Forward-looking statements included in this release speak only as of the date of this release. WisdomTree does not undertake any obligation to update its forward-looking statements to reflect events or circumstances after the date of this release except as may be required by the federal securities laws.

Category: Business Update

View source version on businesswire.com: https://www.businesswire.com/news/home/20240110488984/en/

Media Relations

WisdomTree, Inc.

Jessica Zaloom

+1.917.267.3735

jzaloom@wisdomtree.com / wisdomtree@fullyvested.com

Investor Relations

WisdomTree, Inc.

Jeremy Campbell

+1.646.522.2602

Jeremy.Campbell@wisdomtree.com

Source: WisdomTree, Inc.

FAQ

What is the ticker symbol for WisdomTree?

The ticker symbol for WisdomTree is WT.

What was the net inflow for WisdomTree in 2023?

WisdomTree had over $10 billion of net inflows in 2023.

What was the main driver of net outflows for WisdomTree in December?

The main driver of net outflows in December was a risk-on re-allocation out of the U.S. Floating Rate Treasury Fund and profit taking in commodity products.

What was the pace of organic growth for WisdomTree in 2023?

WisdomTree's pace of organic growth in 2023 was ~13%.

What new products did WisdomTree introduce in 2023?

WisdomTree introduced three digital asset allocation funds that leverage insights from Professor Jeremy Siegel in 2023.