WisdomTree Investments, a New York-based exchange-traded fund with $13.1 billion in assets under management (AUM), has been assigned a buy/high risk rating by Citi.
It offers ETFs in equities, currency, fixed income and alternatives assets classes but distinguishes itself from other ETF’s, which typically buy company’s stock as the price is going up, and sell as it’s going down, by focusing on three main factors for its domestic and international growth indexes.
WisdomTree focuses on EPS growth, sales-per-share growth and book-value-per-share growth. Essentially, the ETF weighs its indexes by fundamental measures instead of market value.
Citi analyst William R. Katz explains why everyone’s talking about this small-cap stock:
- Wisdomtree posted 50% growth in 2009 and 2010 and is expected to post rapid growth in 2011 after a great start this year. The ETF posted 66.8% year-over-year increase in Q1 net revenue to $14.5 million.
- It is expected to gain market share and is expected to see its distribution across retail and institutional channels go up. It also has below average operating risks.
- WisdomTree has strong management team and a niche business that is set to go mainstream quickly.
- Risks involve a secondary post listing later this year or early 2012 and potential of management fee rates to match others in the market.
WisdomTree is currently a pinksheet stock and is expected to be listed on the NASDAQ under the new ticker symbol “WETF” on July 26. Jonathan Steinberg is the CEO of WisdomTree and is married to CNBC reporter Maria Bartiromo.