Skating to Where the Puck Is Headed, ETF Style
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Wednesday, August 5, 2015

Skating to Where the Puck Is Headed, ETF Style

Few fundsters are flying higher right now than Jono Steinberg and his team at WisdomTree [profile]. For a deeper dive into how they got here, and some musings on whether or not they can keep on flying, read Chris Dieterich's Barron's piece on the $63-billion AUM, 79-ETF shop.

Barron's talks to Steinberg, WisdomTree founder and CEO, and other top executives at the shop. He tells the story of its multiple transformations and its rise.

Part of WisdomTree's stock market success (it trades at 38 times forward earnings and five percent of AUM), Barron's posits, may come from the company being "the only publicly traded asset manager focused exclusively on ETF research and development." ETFs are hot, yet BlackRock is much bigger than its iShares business, Vanguard isn't publicly traded, and State Street is primarily an institutional asset manager and custodial bank. ETFs are at best a big piece of the pie at some other publicly-traded shops: at WisdomTree, ETFs ARE the pie.

WisdomTree also has two particularly hot ETFs right now that are driving inflows right now (it's pulling in 25 percent of ETF inflows). Concentrated flows are nothing new for WisdomTree, though where those flows are going has changed over the years. WisdomTree keeps finding different hot products for different times.

"We've gone through about four cycles of people saying, 'You're too concentrated,'" Luciano Siracusano, chief investment strategist and former head of sales, tells Barron's. "It's a recurring criticism. We were so good at taking in money in dividend funds that first year, so then we're a dividend company. Then we were so good at taking in money in emerging markets, and they said, 'You're an EM company.' Then, of course, after 2013, we became a Japan story. We can skate to where the puck is headed and pivot the sales team very quickly."

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