WisdomTree 3Q Inflows Jump on Stock ETFs

WisdomTree 3Q Inflows Jump on Stock ETFs

Total assets rose 7.4% to $48 billion, less than analysts expected.

ShubhamSaharan_white_bg
|
Reviewed by: Shubham Saharan
,
Edited by: Shubham Saharan

WisdomTree Investments Inc. third-quarter inflows soared amid a market rout as investors piled into stock and income exchange-traded funds.  

The issuer reported $48 billion in assets under management for its U.S.-listed ETFs, up 7.4% from $44.7 billion during the same period last year. That was less than the $50.1 billion expected by analysts surveyed by Bloomberg. Shares of New York-based WisdomTree, which manages 78 U.S. ETFs, inched up 5 cents to $5.40. 

U.S.-listed ETFs drew in $3.8 billion, more than six times the $612 million reported last year. Still, that was down from the $4.3 billion the firm pulled in last quarter.  

ETF issuers have reported a mixed bag of results over the past few weeks. Invesco this week announced $7.7 billion in quarterly outflows, while State Street posted a $14 billion loss during the same period. BlackRock Inc., the largest ETF issuer, said its iShares unit helped lift earnings per share, while at the same time inflows dropped by more than half to $22 billion from the year-earlier quarter. 

At WisdomTree, investors piled $1.2 billion into U.S. equity funds, up from the $351 million last year, in contrast with its competitors, which mostly reported net outflows from equity fund divisions amid heightened volatility and plunging markets.  

ETFs focused on dividend-paying value stocks boosted the equity side of the business, executives said during Friday’s earnings call. Dividend-focused ETFs have pulled in nearly $50 billion this year, according to Bloomberg data, 25% higher than 2021, as investors hunt for returns in a plunging market.  

Fixed-income-focused funds brought in $2.6 billion in inflows, greater than the $115 million the segment saw in the same period last year. That number was also down from last quarter, when it netted $4 billion.  

Meanwhile, WisdomTree’s crypto assets fell to $163 million by the end of the quarter, down 45% from the same time last year, as the asset class netted zero inflows throughout the period. Earlier this month, the firm announced the launch of nine new mutual funds, all of which record their shares in physical books as well as blockchain. In September, the company launched the WisdomTree Short-Term Treasury Digital Fund (WTSY), which uses a similar crypto-backed technology.   

Crypto assets have tumbled in the past year, as soaring inflation and heightened recession fears take their toll. Year to date, crypto staples such as bitcoin and ethereum have plummeted 55.7% and 59.3%, respectively.  

Still, executives said they are committed to blockchain, and emphasized the opportunities available in blockchain-enabled finance. 

Digital assets are expected to begin generating revenues in 2023, COO and President Jarrett Lilien said during the earnings call.  

“That to us is the opportunity that's in front of us with the digital wrapper, the blockchain-enabled wrapper,” he said in an interview with ETF.com, referring to technologies that allow crypto assets to be used interchangeably, such as using bitcoin on an ethereum platform. 

The firm’s quarterly earnings came in at $0.06 a share, in line with the Zacks Consensus estimate, but down from the $0.10 in last year’s third quarter. Advisory fees took a hit, falling to $70.6 billion, down 7.6% from $76.4 billion during the year-earlier quarter. ETF.com parent ETFS Capital, in partnership with Lion Point Capital, owns 13.5% of Wisdom Tree's common stock.  

 

Contact Shubham Saharanat[email protected]

Shubham Saharan is a markets reporter at etf.com. Before joining the company, she reported for Bloomberg and the Financial Times. Saharan is a graduate of Barnard College of Columbia University.