WisdomTree Investments (WETF)
Anyone who follows ETFs likely knows about WETF. That’s because its WisdomTree Japan Hedged Equity Fund (DXJ) gathered $9.5 billion in 2013, making it the second-most-popular fund next to the SPY. I recently gave it kudos for being one of the best funds in 2013 and although the DXJ is responsible for a considerable amount of WisdomTree’s growth in 2013, there are other reasons why I think this is one of the best asset managers anywhere.
WisdomTree, the fifth-largest ETF provider in the country, is also the fastest growing amongst asset managers. With $34.5 billion in AUM, its average ETF fee of 0.51% means it’s netting approximately $176 million in revenue annually, with 38% pre-tax margins.
But WETF is also growing AUM by approximately 8% per quarter. If it continues at this pace for the next couple of years, it will generate approximately $124 million in pre-tax income, considerably higher than where it’s at today. Earnings per share for WETF stock would be around 80 cents, and its forward 2015 P/E is around 23, which isn’t half bad for a stock that’s growing EPS by more than 50% annually.
WisdomTree’s future appears bright. In the December ETF Deathwatch list, only five of its ETFs appeared out of the total 61. Like all asset managers, it’s not perfect, but it is the only publicly traded ETF pure-play available. So if you believe in ETFs, as I do, this is the bet to make.