WisdomTree’s (WETF) targeted exchange traded fund strategies have helped the firm gather billions of investment dollars so far this year, topping other ETF sponsors and even some large active mutual fund providers.
According to Lipper data, WisdomTree has gathered $5.65 billion in new assets over the first quarter and now ranks 10th among retail fund families with the highest first quarter growth, just behind OppenheimerFunds, which saw $5.7 billion in new assets, reports Sheryl Nance-Nash for Ignites. [WisdomTree Shares Up 100% This Year]
This is the first time WisdomTree ranked among the top 10. iShares and Vanguard were the only other ETF providers to make the list.
WisdomTree’s sudden success can be attributed to its WisdomTree Japan Hedged Equity (DXJ) , which added $3.9 billion in new assets over the first quarter.
“Investors were attracted to DXJ to gain exposure to the strengthening equity market in Japan, while hedging and negating any influence of the yen,” Matthew Lemieux, senior research analyst for Lipper, said in the article.
According to WisdomTree, registered investment advisors and private managers accounted for 46% of DXJ inflows; broker-dealers, institutional investors and international investors made up 26%, 15% and 12%, respectively.
Consequently, the net inflows helped bolster the company’s revenue by 53.1% in the first quarter year-over-year. [WisdomTree Shares Rally on Higher Profit, ETF Flows]
However, one analyst warns about a turn in the market conditions.
“WisdomTree’s recent growth is highly dependent on a single idea. Its fall could be just as swift should the yen begin appreciating.” Samuel Lee, ETF strategist at Morningstar, said in the article. Additionally, WisdomTree is “highly dependent on its emerging-market funds…. If EM falters, WisdomTree will be hurt.”
Nevertheless, in diversifying its ETF line, CEO Jonathan Steinberg said WisdomTree will go heavy on product launches, with a suite of currency-hedged equity investments, including a currency-hedged Germany ETF play.
WisdomTree, with $25 billion in assets under management, is the sixth-largest ETF provider.
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Max Chen contributed to this article.