WisdomTree Investments released its Q1 earnings for 2022 this morning along with a discussion of where the company is now and forward-looking projections on an earnings call. The company has reported its sixth consecutive quarter of organic growth with record high AUMs while beating Wall Street earnings estimates.
The first quarter of 2022 saw WisdomTree bringing in net inflows of $1.3 billion with an AUM of $79.4 billion, the second-highest it has been, per the earnings deck from the call. Growth into the second quarter is already off to a strong start, with inflows of $1.7 billion, an AUM of $77.8 billion, and annualized organic growth of 12% year-to-date.
WisdomTree president and COO Jarrett Lilien discusses the earnings call and breaks down reasons why WisdomTree continues to have strong performance in a blog post. Lilien attributes the performance to the company’s adoption of a more “robust” process that helps to better understand, capture product-market fit, and allow for more successful launching of new ETFs; to the rehabilitation of its European platform, making it “resilient, successful,” and a place to launch new growth in Europe; and to WisdomTree’s managed models franchise.
What’s more, WisdomTree is aligned for positive performance and growth through the positioning of its products.
“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,” explains Lilien.
The Role of Digital Assets and Managed Models
Lilien sees great potential for growth within digital assets for the company, with aims of bringing crypto exposures to existing financial markets and bringing traditional financial assets to the digital economy. WisdomTree has launched crypto ETPs in Europe, has filed for a bitcoin ETF in the U.S., and has brought crypto exposure opportunities for wealth advisors to provide to their clients through WisdomTree’s crypto separate account strategy. The company is also looking forward to integrating more traditional finance into the crypto economy.
“WisdomTree is a first mover in bringing passive mainstream assets onto the blockchain, with products expected to be live this year,” writes Lilien. “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 managed models portion of its business currently contributes around $2 billion in AUM, with 12% of U.S. ETF flows being provided through a managed model strategy. WisdomTree has gained two material mandates so far in 2022 and is making positive progress with both Morgan Stanley and Merrill Lynch.
“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,” Lilien writes.
To listen to the WisdomTree webcast and see a detailed breakdown of the Q1 2022 earnings, click here.
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