WisdomTree is celebrating its 10th anniversary of the launch of its first 20 equity products. Why was this important and still important today?
Well our 10 year anniversary was really important because 10 years ago we listed 20 ETFs on a single day. We were told at the time that it was the largest issue by a single issuer in the 200 year history of the New York Stock Exchange.
It was also historic for another reason. It gave investors a way to invest around the world in dividend-weighted ETFs, really for the first time, and that was a major step forward in the world of indexing. WisdomTree was able to give investors an alternative to traditional capitalization-weighted index funds all around the world – and we did this with our proprietary dividend-weighted ETFs. So after 10 years now, they’ve had a very impressive track record and we’re very glad that we can celebrate that here.
What are some of the changes in the investment landscape you've observed in the past decade?
Well the investment landscape has changed and I think one of the things that’s changed really most is people’s use of ETFs – the adoption of ETFs has been a major change. I think investors also understand the power of passive investing, and the advantages over traditional actively managed mutual funds. A third big innovation is just this notion that there’s other ways to index your portfolio – innovations in indexing have been prolific – and I think investors today are moving beyond traditional cap-weighted approaches to indexing, which is very good for WisdomTree.
Click to watch the interview with Luciano Siracusano, WisdomTree EVP & Chief Investment Strategist
What are the key things WisdomTree has learned as an organization in that time?
What we’ve learned over the last 10 years is the importance to continue to innovate. And we’ve continued to create different approaches to different asset classes around the world.
One of the most important things we did was to help investors manage currency risk by actually figuring out a way to currency-hedge individual equity ETFs. And some of our largest funds are currency-hedged ETFs that we created several years after we launched 10 year ago.
Thanks to the internet there is a wealth of publicly available information about finance and investing. Are you finding that investors are more informed these days?
Yes the internet has transformed investor education and awareness about what’s available today, and we just think it makes sense to have products that trade on exchanges that are digital, that people can get access to just like they can get access to the ETF on the internet.
You can trade ETFs through any brokerage account; you don’t have to worry about the paperwork, you don’t have to worry about being locked into one provider. They trade on exchanges like individual stocks…so we think that education and awareness is just going to continue to grow as more and more people access digital information.
I think they’re a lot more informed about the power of index-based investing versus active and I think they’ve been educated in the past few years that there’s more than one way to weight an index. And so the proliferation of information is likely to continue.
What are their priorities, and how are they assessing their investment options?
Well you know the priorities for investors change given the market’s environment. One of the things’ that’s happened in the last few years is that interest rates have come way down, all around the world. Investors are looking to solve for income. They’re looking for ways to squeeze dividend income out of the equity market, for example, and that’s one of the places WisdomTree really has some unique solutions, by dividend-weighting equity markets, we help solve for that problem: “How do we get more income in the portfolio to live off of, for example, in retirement?”
So their financial advisors, registered investment advisory firms are very important because today there are practically 2,000 ETFs to choose from so you need someone to guide you through that kind of labyrinth of choices.
WisdomTree is known for being one of – if not the most – transparent companies in asset management. Why is transparency important to you?
Transparency is important in asset management because people need to know what they own. The nice thing about an ETF is you can see what you own every single day.
Transparency is also very important to WisdomTree. We want people to know what we’re doing. We make our holdings available every day on our website, we disclose net inflows into our funds on a weekly basis, and we disclose the methodologies of how we put together our indexes.
We feel that the more people know and understand about WisdomTree, the more likely they are to use us.
What does it feel like to celebrate this anniversary at the NYSE?
Celebrating our 10 year anniversary at the New York Stock Exchange has been fantastic. You know, it was a dream come true when we launched the funds 10 years ago…coming back to celebrate 10 years later…with many of the people who were there in the beginning…is incredibly exhilarating. It’s a chance for us to thank our employees and our clients who’ve helped us to build this company over 10 years.
And we started from – basically – scratch. And today we’re the 6th largest ETF manager in the United States, and the 9th largest in the world, managing more than $40 billion dollars in assets under management.