Q4 2023: The First $100 Billion, and The Next

February 02, 2024

This morning, we hosted our earnings call where we discussed WisdomTree’s strong execution in 2023 and our outlook for 2024 and beyond. After achieving $100 billion in assets under management (AUM) for the first time, I wanted to take the opportunity to provide an update on how we’ll achieve the next $100 billion to you, our clients, our partners, our stockholders and our broader network. 

So, how will we get there?

It starts with our differentiated product lineup where we have products and solutions for every market environment and every part of the market cycle. In 2023, we generated over $10 billion in net inflows. This was our third consecutive year of positive flows and a best-in-class pace of organic growth among our publicly traded U.S. asset manager peers. In 2024, we will continue to augment our product lineup with the types of innovative and differentiated fund launches that are WisdomTree’s hallmarks.

We are also focused on growing our client base and deepening our client relationships. In 2023, we grew our client base by 20% and saw a 20% increase in the number of clients holding multiple WisdomTree products. Growing and deepening relationships with existing clients, while at the same time adding new ones, is critical to our organic growth formula in 2024 and beyond.

A key additional growth driver is building upon momentum in our models business. Though our journey in models is still relatively nascent, having started in 2020, we currently have $3.2 billion in models assets and our momentum is building. Today, there are roughly 2,000 advisors in the U.S. with at least one account that uses WisdomTree managed models. That number more than doubled in 2023 with over 1,000 advisors added in the past 12 months. 

And yet, we’re still only scratching the surface of the models opportunity as there’s ample room for expansion. In the coming years, we will look to continue engaging with the more than 70,000 advisors who have access to WisdomTree models to capture an increasing amount of their $15 trillion in AUM. Growing and penetrating our accessible market and adding new advisors, while deepening wallet share with current advisors as they, too, gather additional assets from their end clients, translates into a strong pipeline of future AUM and earnings growth. As advisor growth is a leading indicator of asset growth, we have high confidence in the models platform in 2024 and beyond.

And finally, I expect our leadership position in tokenization and blockchain-enabled finance will be another key driver in achieving our next $100 billion. We’ve put in a lot of hard work to establish our early mover advantage, though the market is moving quickly and some of our traditional finance peers are also starting to talk up the enormous opportunity in tokenization. This is not only a validation of our digital assets vision and tokenization strategy, but also underscores the need to maintain our multi-year head start.

A crucial component of our tokenization strategy is the ongoing enhancements to the WisdomTree Prime™ platform. The app is now available in 38 states – nearly 70% of the U.S. population. We’ve added new products and features like the WisdomTree-Siegel digital funds as well as a money market fund, and look forward to debit card availability in the coming weeks, with peer-to-peer transfers in the near future. We’re excited about bringing this platform to a broader audience and see it as another way to scale meaningfully.

Additionally, we see a significant opportunity to leverage strategic relationships to drive the growth of WisdomTree Prime™ as well as revenue opportunities outside of WisdomTree Prime™. We have several active B2B and B2B2C opportunities in the pipeline and we think that many of those efforts could further diversify our revenue streams and offer new top-line growth opportunities that will leverage the existing tokenization platform with limited incremental expense. These types of relationships will naturally be episodic, but, we believe each will likely be notable when they do cross the finish line.

As I continue to mention every quarter, it’s a very exciting time for WisdomTree. We have best-in-class organic growth, a meaningful margin expansion opportunity and significant leverage to the secular shift toward tokenization.