Jono believes there is a large and important opportunity to help service financial advisors by improving their ultimate client experiences with technology. One of the motivations for WisdomTree’s recent technology investments is to help broaden the reach of the firm’s model portfolios for clients who embrace digital technology and need help building portfolios.
New Categories for WisdomTree Growth
We had a discussion about the focal points of product development that Jono is most excited about; those include recent launches aimed to enhance cap-weighted index returns for fixed income; providing a liquid, low-fee1 alternative for liquid alternatives competing with hedge funds; and fully transparent, true active strategies in the ETF structure.
Jono believes the non-transparent active ETF initiative symbolizes the financial services industry generally—where in any other industry, he believes you would be “laughed out of the room” if you tried to take what is at the core of the innovation of the structure and remove it. He is skeptical that non-transparent active ETFs will become large commercial successes.
Underinvested against the Opportunity
Jono believes most firms have underinvested in the ETF opportunity, while he invests the maximum amount of the firm’s income statement and balance sheet that he can in order to pursue the growth opportunities in ETFs that he still sees ahead.
In the first 10 years of WisdomTree’s history, the ETF industry had $2.2 trillion of inflows, and WisdomTree was able to represent 2.3% of the total inflows to the industry. Jono believes in the next 10 years in the United States, starting this year, we could see anywhere from $5 trillion to potentially $7 trillion of flows.
With the breadth of product development and further investments and asset classes we can now represent, Jono believes we can take 5% of the industry flows. He would like to remain an independent company and become a “forever company” to play this scenario out, but he recognizes how much work we have ahead of us to make this come true.
Jono said that when he was growing up, he was never interested in his father’s wealth, but rather his confidence and passion. His father had a true enthusiasm for life and the thrills that each new day brought. This passion instilled Jono with a sense that money and wealth alone would not bring true happiness.
Jono’s strength comes from his inner truth and inner happiness. His devotion to what he does was transparent in this interview, and I encourage you to listen to the full conversation here.
This article has been republished with permission from Wisdom Tree.