WisdomTree ETF Assets Grow as Shares Rally 74%
April 25th at 8:11am by Tom Lydon
WisdomTree Investments (NasdaqGM: WETF) is on a roll. Its specialized Japan ETF that hedges its currency exposure to the yen is the best-selling fund this year, and the company’s shares are up 74% so far this year.
The firm is known for its fundamentally-weighted indices that put a new spin on traditional benchmarks that weight stocks by market capitalization.
The surge in equity markets that took place over the first quarter of 2013 has also prompted new assets into WisdomTree’s ETFs.
The WisdomTree Japan Hedged Equity ETF (NYSEArca: DXJ) has $7.2 billion in assets under management, and has added 14 million shares this week, reports Forbes. DXJ is from the original line-up when the firm debuted. The U.S. dollar currency-hedged exposure has been valuable to investors as the yen has been devalued within the forex markets this year. [DXJ Rakes In $5 Billion]
WisdomTree is an ETF sponsor and manager that has developed its indices as fundamentally-weighted. Their various strategies have proven successful over time. The line-up includes funds focused on equities, fixed-income, alternative asset classes, and currencies. [WisdomTree Plans Small Cap Yen Hedged ETF]
“2012 inflows are worth a closer look. The industry saw $53 billion in the first quarter, followed by $25 billion in second quarter, and then $52 billion and $55 billion in quarters 3 and 4, respectively. So as the market improved, the industry saw a willingness on the part of investors to shift their assets from cash,” Zacks wrote in a recent article. [WisdomTree Shares Rally 70% on Strength]
The equity mutual fund space experienced outflows of $153 billion, as equity focused ETFs saw inflows of $133 billion in 2012.
Assets under management for WisdomTree have been steadily rising since 2009, however, over the past year, the provider has seen a dramatic rise in inflows. In 2009 assets were at $6 billion and grew to $9.9 billion in 2010. In 2011, the provider had $12.2 billion in AUM, and ended 2012 with $18.3 billion in assets under management, marking a 50% increase, reports Zacks. [Smaller, New ETF Providers Chip Away at 'Big Three']
WisdomTree’s strong net inflows are parallel with the annual net inflows seen throughout the ETF industry. In 2012, the ETF business recorded about $185 billion in net inflows, up from the $118 billion recorded in 2010.
WisdomTree is an small upstart provider that came to market in 2006, and has used fundamental indexing methods from the beginning. This style weights companies based on factors other than market-cap, and focuses in on dividends, earnings or equal representation.
WisdomTree Japan Hedged Equity ETF
Tisha Guerrero contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.