Working with expert partners works for WisdomTree
WisdomTree | Best Thematic ETF Issuer ($100m+) | Best European Equity ETF Issuer ($100m-$1bn) - The thing that differentiates WisdomTree and its thematic ETF offering from other ETF issuers is its commitment to working with expert partners says Chris Gannatti, Global Head of Research.
He gives as an example the energy storage ETFs, VOLT and CHRG, based on battery solutions as researched by Wood Mackenzie. “We like working with Wood Mackenzie as they do a detailed analysis and it’s that detailed analysis that twice a year informs what companies are in the portfolio,” Gannatti says.
WisdomTree’s European portfolio of thematic ETPs is dominated by three main funds, the battery solutions funds, and funds focused on artificial intelligence and cloud computing. The thematic assets total around USD1.5 to USD1.6 billion of WisdomTree’s European assets.
“The client base stays, holding the funds in a stable pattern, despite comment on inflation rising or other causes of short-term volatility,” Gannatti says. “These are long term strategies to be held on a 10 to 20-year basis out into the future. Amidst all the volatility, clients have tended to hold onto these allocation tools that focus on big trends.”
WisdomTree Europe has 230 distinct investment strategies and a number that focus on commodity investments, which have been impacted by the Russia-Ukraine war.
“We have inflation at its highest for the last 30 years so commodity markets were already responding but they are going up even further because of the war,” Gannatti comments.
More thematic funds are on the books for the firm. “We are always doing active research in terms of different possibilities and a big possibility has to be the fact that the world has taken a stance on decarbonisation. When we see something like that we ask ‘is this investable?’ ‘Is there an expert partner that we could work with?’.”
Gannatti notes that some of the most exciting new trends in investment are in the private markets, so the challenge is translating that into a publicly listed security such as a UCITS compliant equity-backed ETF. WisdomTree tracks thematic funds globally and in 2020 saw a record adoption of thematics with USD60 billion globally going into the sector. Prior to that the highest year had been 2018 with close to USD20 billion and 2021 saw further growth with over USD100 billion flowing into the thematics sector. “We will see how 2022 will go,” Gannatti says.
“My expectation would be that more than USD100 billion plus would be harder in this difficult year but it’s clear that since 2015 there has been an uptick in demand for thematically oriented investments. ETFs have gone in one direction and that is up significantly,” he says.
He reports that Europe is an interesting market with its deep fragmentations across the UK, Germany, Switzerland or the Nordics. “Every investor has a different way that they want to invest and allocate,” he says.