WisdomTree Investments (NASDAQ:WETF), a New York-based sponsor and manager of exchange-traded funds, has reported net earnings of $15.0 million for the third quarter of 2013, or $0.11 per share on a fully diluted basis. This compares to $4.5 million in the third quarter of 2012 and $12.2 million in the second quarter of 2013.
Jonathan Steinberg, CEO and President of WisdomTree.
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As the only pure-play publicly traded ETF sponsor and manager, WisdomTree’s results are seen as something of a bellwether for the ETF industry.
Commenting on the results, Jonathan Steinberg, CEO and President of WisdomTree, said: “WisdomTree continues to drive top line growth with $1.2 billion in net inflows in the quarter, comprised by balanced inflows across domestic, international and emerging market equity ETFs; as well as continued strength in our franchise-leading yen hedged Japan fund. We are effectively capitalizing on the greater awareness of our currency hedged equity family which is translating into significant asset growth in sister products. Importantly, we continue to position the company for future growth and have launched eight new ETFs so far this year.”
He added: “As we continue to grow and reach economies of scale, we are demonstrating the powerful operating leverage in our business. WisdomTree’s pre-tax margins reached 38% on a base of $30.5 billion in average assets under management.”
At the end of the quarter, WisdomTree’s ETF assets under management were $31.4 billion, up 86.8% from $16.8 billion at September 30, 2012, and up 8.2% from $29.0 billion at June 30, 2013. Net inflows for the quarter were $1.2 billion as compared to $1.0 billion in the third quarter of 2012 and $5.0 billion in the second quarter of 2013.
The sponsor’s market share of industry net inflows was 2.1% for the quarter, as compared to 2.0% in the third quarter of 2012 and 32.2% in the second quarter of 2013. For the first nine months of 2013, WisdomTree’s market share was 9.8% as compared to 2.8% in the same period last year.
Total revenues increased 83.0% to a record $39.6 million as compared to the third quarter of 2012 and 6.2% compared to the second quarter of 2013 primarily due to higher average assets under management as a result of positive net inflows and market appreciation.
The sponsor’s average advisory fee earned was 0.51% as compared to 0.54% for the third quarter of 2012 and 0.52% in the second quarter of 2013. This was primarily due to the majority of inflows going into the sponsor’s Japan hedged equity ETF, ticker code DXJ, which has an expense ratio of 0.48%.
Over the quarter, the sponsor rolled out a number of new ETFs. These included the WisdomTree US SmallCap Dividend Growth ETF (DGRS) on July 25, 2013, the WisdomTree Emerging Markets Dividend Growth ETF (DGRE) on August 1, 2013, and the WisdomTree Emerging Markets Consumer Growth ETF (EMCG) on September 27, 2013.
WisdomTree is the fifth largest provider of ETFs in the US.