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WisdomTree reveals net losses for 2008

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New York-based WisdomTree, an index developer and exchange traded fund sponsor, has reported a net loss of USD5.6m in the fourth quarter of 2008.

New York-based WisdomTree, an index developer and exchange traded fund sponsor, has reported a net loss of USD5.6m in the fourth quarter of 2008.

The full year net loss was USD29.0m compared to USD 25.1m in 2007.

WisdomTree chief executive Jonathan Steinberg says: ‘These are challenging times, but these are also important times of change in the asset management industry as difficult market conditions have highlighted the importance of transparency, liquidity and tax efficiency like never before. Recognition of these structural advantages helped the ETF industry as a whole take in approximately USD178bn in net inflows in 2008 in stark contrast to the net outflows of mutual funds.

‘The strong relative performance of WisdomTree’s fundamentally weighted ETFs against their market capitalization-weighted benchmarks along with the launch of the industry’s first ‘1940 Act’ currency ETFs in collaboration with the Dreyfus Corporation helped us achieve net inflows in a difficult fourth quarter and 2008. Such progress is a significant accomplishment and reason for optimism going forward.’

As of 31 December 2008, assets under management tied to the WisdomTree Indexes were USD3.6bn, down 21.8 per cent since 30 September 2008.

At the end of the fourth quarter, ETF AUM were USD3.2bn, down 22 per cent from 30 September 2008.

The severe decline in the valuation of global equity markets contributed to USD925m of net market depreciation of the WisdomTree ETFs in the fourth quarter.

Despite domestic markets declining nearly 22 per cent and international markets nearly 20 per cent, net inflows into WisdomTree ETFs were USD 29.5m in the fourth quarter.

For the full year, ETF AUM declined 30.2 per cent primarily due to USD2.3bn in market declines despite almost USD900m in net inflows.

WisdomTree’s fundamentally weighted ETFs experienced strong relative investment performance during the fourth quarter. Approximately 80 per cent of the USD2.9bn invested in WisdomTree’s 42 equity ETFs on 31 December 2008 were in funds that, since their respective inceptions, have outperformed their benchmarks through that date.

Twenty five of WisdomTree’s 41 equity ETFs outperformed their comparable benchmarks in the fourth quarter.

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