WisdomTree, Inc.
Q2 2015 Earnings Call Transcript

Published: 31 Jul 2015

[Operator:]

Good day, ladies and gentlemen, and welcome to the WisdomTree Q2 Earnings Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions]. As a reminder today's conference call is being recorded. I would now like to turn the conference to Mr. Stuart Bell Wisdom Tree Investor Relations. Please go ahead sir.

[Stuart Bell:]

Thank you. Good morning. Before we begin, I would like to reference our legal disclaimer available in today’s presentation. This presentation may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which are generally identified by terms such as believe, expect, anticipate, and similar expressions suggesting future outcomes or events. Forward-looking statements reflect our current expectations regarding future events and operating performance and speak only as of the date when made. Forward-looking statements are subject to numerous assumptions, risks and uncertainties, which may prove to be incorrect. Such statements should not be read as guarantees of future results and will not necessarily be accurate indications of whether or not, or the times at or by which, these results will be achieved. A number of factors could cause actual results to differ materially from the results discussed in forward-looking statements, included but not limited to, the risks set forth in this presentation and in the Risk Factors section of the company’s Annual Report on Form 10-K for the year ended December 31, 2014. Now it is my pleasure to turn the call over to WisdomTree’s CFO, Amit Muni.

[Amit Muni:]

Thank you, Stuart, and good morning everyone. We again demonstrated another stellar quarter characterized by record AUM. Further strengthening of our product position and currency hedging and lastly demonstrating the operating strength of our business model as we surpassed our goal over 50% pretax margin on a U.S. business. On top of all this we continue to execute on our strategic growth plans including expanding our distribution capabilities and launching innovative products in the U.S. and Europe to best position us for growth ahead. Now let's get into the results for the quarter beginning by first reviewing the U.S. ETF industry statistics. Turning to slide three, industry flows were 42.3 billion in the second quarter slightly down from the first. On the right, you can see international unhedged and hedged equity dominated the flows. Also of note this is the lowest level of flows we have seen into fixed income over the last several quarters. On the next slide, we can review our operating results. Our AUM increased 73% from last year to a record 61.3 billion, led by a strong inflows of 6.6 billion driven by the continued success of hedged in DXJ. Our market share has inflows with 15.6% for the quarter. The continued success with HEDJ and DXJ further demonstrate our beliefs that currency hedging is becoming a long-term strategic holding. Turning to the next slide. You can see on the chart on the left. International equity AUM rose to 359 billion. But what's more important is the dark blue. Hedged equity AUM market share continued to grow reaching now 17% in the quarter. Why do we believe currency hedging is a strategic allocation and not a short-term tactical trade? Look at the chart on the right. Despite the dollar’s weakness over the last few months, currency hedged AUM continue to decline during that same period. We believe the currency hedging category for the industry overtime could be 50% of the international equity AUM, therefore, we continue to focus on this opportunity to position ourselves to be the leader in this category. We also continue to demonstrate our strength in Europe and Japan. Turning to slide six. On the left, WisdomTree has nearly 60% market share hedged and unhedged closed into Europe for the first half of the year and nearly 50% in Japan. This is important because Europe and Japan are large asset allocation categories for investors. Having the leading products in these categories allows us to be in the best position to capitalize on this asset allocation opportunity. Our dominant position these two markets were HEDJ and DXJ, let's look at the highlights away from these two products. Turning to slide seven. We took in a $1 billion of flows away from HEDJ and DXJ or $1.7 billion for the first half of the year. In the hedged equity category, we saw strength in our broad international and Germany hedged equity ETFs. In our unhedged international products small caps led the flows. In emerging markets, we saw continued flows into our India fund. On the fixed income side, we similarly saw flows into our emerging markets fixed income fund as well as some modest flows into some of our rising rate fixed income ETFs. On the next slide, well the next two slide will reflect how we rank against the other asset managers. Turning to slide eight on the left. WisdomTree was ranked third in inflows compared to other US ETF sponsors for the first half of the year. This translated us is they're having the best organic growth rate of a top 10 ETFs sponsors as you can see on the right. However, we are also proud of a much broader ranking on the next slide. WisdomTree was also the third best asset gather compared to all ETFs and mutual fund managers in the US according to Morningstar. This also translate into WisdomTree continuing to have the best organic growth rate versus the other publicly traded asset managers. In fact, if you exclude HEDJ and DXJ, we have the highest growth rate. We believe this again demonstrates the strength of our product innovation and the growing acceptance of a superior structure that ETFs have over mutual funds. On the next slide, we show how our ETF's have performed according to the Morningstar Peer Groups. These comparisons take into account fees and transaction cost reflect how our equity fixed income and alternative ETFs performed against active and passive mutual funds in other ETFs. This concession 58% of our ETFs outperformed their peer group or 90% of the approximately $60 billion invested in our ETFs or funds that beat their peers. Now I'd like to update you on our European business on slide 11. Our European AUM continues to grow across both our WisdomTree UCITS and Boost product set and reached $612 million at the end of June. During the quarter, we launched HEDJ and DXJ in the UCITS form. Now these two ETFs are available worldwide. We see continued growth in our Boost product line particularly in commodities and we've launched additional Boost products in London, Germany and Italy. And lastly, we are continuing to build out our sales teams to prepare for future growth ahead. On slide 13 we can start to go through our financials. On the back of the strong inflows for the first and second quarter revenue reached record levels and climbed 85% from last year to $81.6 million. Net income more than doubled from last year to $24.2 million. EPS was $0.18 for the quarter which included a loss of approximately $0.01 for our European business. Turning to slide 14. On the left you can see the currency hedging categories continues to grow as we lean into opportunities which will help contribute to 242% increase in revenues on these categories as you can see in the right. We also experienced the 25% increase in our US equity ETF revenues over the second quarter of last year. Our average revenue capture increased to 53 basis points and remains at 53 today. On the next slide we can review our key margin metrics. Gross margin for our US listed ETF business increased to 86.4% due to the significant increase in our AUM. We are raising our guidance and anticipate gross margins will be in the 85% to 87% range in the near term assuming these AUM levels and mixed hold. In the chart on the right, you can see our US business had a 53.2% pretax margin and $61 billion on average AUM. And our overall margin was 50.2%. We have achieved the margin target we lead out the several quarters ago reflecting the operating scale of our business model. I know since speaking from many of you after our last call that you like to know our next margin target. While we are not giving any new margin guidance. Let me give you a framework of how to think about margins. WisdomTree is a growth company. This is not about reporting uptick in margins quarter after quarter or rather we are focused on growing our revenues increasing our market shares and becoming one of the top five ETFs players globally. So our goals to make the right investments in the business to capitalize on the tremendous runway the ETF industry has ahead of itself. Can margins grow up from here? Absolutely. As we continue to scale margins will improve but we have to measure that against the opportunity ahead of us. But some things will not change. First, we will continue to have expense discipline as we have demonstrated to you over the years and second our goal to have the highest margins of any of the publicly traded asset manager has not and will not change. Next we will review expenses on slide 16. First quarter total expenses were 39.1 million compensation expansion declined by 1 million due to lower seasonal payroll tax expense. Higher AUM increased fund expenses by 943,000. Marketing and sales related spending increased 487,000 as a part of our strategic growth spending we're talked about earlier in the year. Professional fees increased 243,000 due to recruiting expenses and the positions we feel in US and Japan. Other expenses increased 366,000 due to higher general and administration spending. Operating expenses for the European business increased 492,000 due to the launch of new funds and higher marketing and sales related spending to support our European products. We ended the quarter with 14.6 million in expenses are up 3.8% from the first quarter. On the right you can see the compensation as a percentage of revenue for our US business was 21.6% for the quarter. Based on our year-to-date results we are still tracking our US compensation to be between 21% and 25% of our revenues for the full year. However, timing and level of flows in the second half may impact that target. We'll keep you updated as we have more visibility. On the next slide we can review our balance sheet. Total assets grew to 265 million due to our strong cash flows. As you can see on the right we generated 65.5 million of cash from our operating activities due to recurred inflow levels. Within 15.3 million to buy back approximately 835,000 shares of stock we issued to employees as a part of compensation. We've returned 21.8 million to our shareholders to quarterly dividends and ended the quarter the 211 million of cash. On the next slide we can start to go through our taxes. As a reminder well we've recorded GAAP tax expense we don't actually pay cash taxes due to our tax losses. At the end of the quarter we have about a 100 million of pre-tax earnings that can be sheltered from paying taxes. At today's growth rate it is likely we will run through our current remaining tax shield by the end of the year or first quarter of '16. This is a good problem because it means we are growing. But remember we also continue to generate tax losses due to employees exercising options investing in restricted stock. The detail information on that is on the right hand side of slide 18. Now let me give you an update on where we are so far this quarter. Momentum continues to carry our US AUM grew 62.8 billion and we have taken in about 1.2 billion net in inflows led by hedge. Now before turning the call over to Jon I'd like to update you on some exciting things that are happening on the distribution side. Turning to slide 20. As we have stated at the beginning of the year expanding our distribution capabilities was a key priority for us for 2015. We have taken important steps to add depth and diversity across our global distribution platform. First, we promoted Alisa Maute to Head of Sales in the US. Alisa has been with us for seven years and have successfully worked across multiple distribution channels at WisdomTree. In Europe, Nizam Hamid joined us to lead our sales efforts in Europe. Nizam has played key distribution roles in the ETF businesses at Deutsche Bank, BlackRock and Luxor. In Asia we've recently announced the opening of an office in Japan and Jesper Koll will be leading our development efforts there. Jesper comes to us from JP Morgan and is widely recognized as a leading authority in Japanese investment community and we will further strengthen our thought leadership on the Japanese market. Complementing Jesper in a sales capacity is Jun Kamisubo [ph] who was formerly the Head of ICO [ph] Japan. We are going through the regulatory approval process right now I can't speak much about our plans in Japan. We expect to have our approval in the fourth quarter. So we can speak more about it then. Finally we announced the creation of a new role to oversee our ongoing and future distribution efforts globally and we are pleased to welcome Kurt MacAlpine as Head of Global Distribution. Kurt joins us from McKinsey where he is the partner and leader of the North American asset management practice. Collectively these hires representing meaningful expansion of distribution capabilities and allows us to better respond to demands we see from investors for EPS and our investment strategies globally. Now let me turn the call over to Jonathan.

[Jonathan Lawrence Steinberg:]

Thanks Amit. Good morning, everyone. Numbers can almost speak for themselves. Record revenues up 85%, record net income up 128%, record inflows, in fact we took in more than 20 billion of inflows to the first half of the year making WisdomTree the third best asset gathering complex from America. I have to repeat that, WisdomTree was the third best asset gathering complex for the first six months to the year. A stunning accomplishment. It's probably the greatest accomplishment for this company in our young history. Also we achieved industry leading pretax margins of 50% while making significant investments into Europe, Japan and of course into United States. The combination of these two statistics prove WisdomTree's capable of greatness. We have the ability to create some of the most desirable investment solutions in the market. We have a powerful business model which is scaling and supporting substantial growth. We have efficiency and the ease. Our execution is world class. We have become a highly effective competitor in the fast changing world of asset management and make no mistake. Asset management is being transformed right before our very eyes. The key to WisdomTree success from the very beginning has been quality of our people and our focused ETF product strategy. The combination of our innovative products, our talented and experienced operating teams and our focused ETF platform is extremely effective repeatable and scale-able. That is why we are continuing to invest in our people. Our products and our platform to support future growth. I'm excited by the world class talent and capability we are adding to the company to enhance our distribution in U.S. and across international markets. I believe we have an immense opportunity to grow from here. I have never been more optimistic about ETFs and WisdomTree's future. With that let's open up the call to questions.

[Operator:]

[Operator Instructions] Our first question comes from the line of Craig Siegenthaler of Credit Suisse. Your line is now open.

[Craig Siegenthaler:]

Thanks. Good morning everyone.

[Amit Muni:]

Hi Craig.

[Craig Siegenthaler:]

Have you started accelerating the research and sales effort behind the rising of interest rate products as given the effect be raising rates pretty soon?

[Amit Muni:]

So we have done, really we have to put out a lot of content on through our research. But we haven't been doing more than that at the moment. But we are poised to promote those when the market is right and obviously there is a sense that rates will be rising which should prove to be constructed with those funds and probably supportive also for the currency hedged equity products.

[Craig Siegenthaler:]

Got it. And then can you walk us through the competitive advantages that you have the competing in white spaces really giving your cap self-indexing effort and your purely ETF focused sales force?

[Amit Muni:]

Could you just repeat the question? I'm sorry.

[Craig Siegenthaler:]

Yeah. So as you compete for new wide spaces. Like in your new areas that haven't taken off yet. But if you go back in time and look at HEDJ or DXJ. What are some of the competitive advantages you have? Maybe like your ETF focus sales force. The ability to have a captive effort inside your firm?

[Amit Muni:]

I think the greatest advantage that we have is a broad regulatory relief our really we have the most experienced team in the ETF that industry and then you did touch upon the point self-indexing. Self-indexing allows us to get to market fast. It allows us to come out with truly differentiated proprietary product. It allows us to promote the funds in a unique way which is really how we were able to capture the leadership in currency hedging and at the end of the day when future competition does arise when others catch up, they are never exact competitive product. So I mean that's self-index is probably the point that we should focus on that's a great advantage.

[Craig Siegenthaler:]

Thanks guys. Thanks Jon.

[Operator:]

Thank you. And our next question comes from the line of Bill Katz of Citi. Your line is now open.

[William Katz:]

Okay. Thanks very much for presenting the question. So want to go back to margins. Clearly and you met your goal and you raised your gross margins. And just so listening to your summary comments about the investments you made around the world. And I know you say the margin go up absolutely. How are you thinking about that and I guess the broad question is there is a number of competitors is maybe will ask question, who are starting to step up their folks on smart beta. You've heard frankly and talk about it like - just talked about few minutes ago. I shared he's talking about these are some big heavyweights. So appreciate the self-indexing. So is there any thought of potentially sacrificing some of that margin maybe in the form of pricing to really drive growth. Or is it just bad news come in you just can spend a fast and up and the margins can go up. Just you think how you think strategically about that so not a question I apologize.

[Luciano Siracusano:]

The way we deal with future competition really starts with the original business model which is proprietary products first in markets. So we have we were the first to really give you a global suite of smart beta products using our dividends and earnings weighted methodology which they are approaching many of them their 10 year anniversary which is in itself a strategic advantage. We try to price our funds at the right price with the long-term view towards pricing. And then in general we always we have launch some products at lower price points as just normal course of business. And then lastly I mean we've always been aware that this is a price competitive industry. It's been price competitive from day one so there is really nothing new. But we so I feel we have a very good feel for pricing and it's something we always keep an eye on.

[William Katz:]

Okay, and then as maybe one for Amit I appreciate taking both the question this morning. Sort of frame out what which is toward the low end of the comp rate US comp ratio versus the high end this was as condition are you in and --. So maybe banded in your mind given we halfway through the year.

[Amit Muni:]

Sure. So it's really going to depend I think on the velocity and the timing of the flows that we see in the second half of the year. That's going to help us or engage or whether we're going to be at the low end of the 21 or at the high end of the 25. Remember what we experienced in the fourth quarter of last year where we have the majority of our flows come in Q4 and then we had an uptake in the expense. Remember what happened in Q1 where we have the big influence coming in Q1 and the revenue didn't show up into Q2 and that had an effect on the comp as a percentage of revenue. So that the timing and the velocity is really going to sort of define where it's going to be in that range

[William Katz:]

Okay. Thanks very much for taking my questions.

[Operator:]

Thank you. And our next question comes from the line of Dain Haukos of Piper Jaffray. Your line is now open.

[Dain Haukos:]

Thanks. Can you talk a little bit about the feedback you've gotten from the Pfizer's regarding your research in the merits of the currency hedged vehicles as a longer term strategy rather than just say short term strategy.

[Luciano Siracusano:]

Hi. This is Luciano. Feedback has been great I think you can see it in the flows I think you can see it in our share of the category and you can just see it in the change of behavior chart that's in the deck that shows to grow of currency hedged is very important because as we've said as more and more people start to incorporate into allocations that's a huge opportunity for WisdomTree. The default a year was basically to be 100% unhedged and that debate has changed and that thinking has changed a lot of its been driven by the research was put out there and of course the success of DXJ and HEDJ it's made a real difference in people's portfolios.

[Dain Haukos:]

Thanks. And then I guess on for Amit where do we sit versus the prior expectations around growth spending for this year just trying to get a sense if so that the announcements that we've heard recently in lot of the recent hiring is sort of as you had planned when you were doing your budgeting earlier in the year.

[Amit Muni:]

So remember beginning of the year we said we're going to spend anywhere from 12 to 16 million on growth investments. On the bulk of that was really the expansion of our sales force. So far this year we've spent about 4.5 million of that 12 to 16. Now that we have our two heads of US and global sales in place. I'm expecting a pickup in the spending. But I would say probably since we didn't had as much paying in the first half of the year, we'll probably be on the low end of the range of that 12 to 16.

[Dain Haukos:]

Thanks.

[Operator:]

Thank you. And our next question comes from the line of Chris Shutler of William Blair. Your line is now open.

[Christopher Shutler:]

For DXJ and HEDJ can you talk about the breakout of Q2 flows by distribution channel? I'm particularly interested in how the retail versus institutional split would look?

[Amit Muni:]

You know we have shown those charts in prior quarters we don't always show the charts about the estimated flows into the channels but there has been no change, very similar to our sort of AUM breakdown with a little bit of extra strength internationally and institutionally.

[Christopher Shutler:]

Okay, great. And then on the competition front not surprising that we've seen a ton of new interest in currency hedged ETFs in the market. Clearly HEDJ and DXJ, a tremendous brand and liquidity but some of the products have materially lower expense ratios and maybe not the exact same strategy but similar strategies, just maybe walk-through Jon is first mover advantage is so important in the ETFs space and I'm particularly interested in any comments you have on the importance in the wire house and RAA channels?

[Jonathan Lawrence Steinberg:]

First move that we take mind share liquidity awareness and we have a longer track record. We have a proprietary product that is very differentiated from the really the other competitors who are all competing with virtually identical exposures. The business model is what we have anticipated from the very beginning going back 10 to 12 years and if you're happy with the front any to ETFs it’s not easy to get an adviser to switch for an insignificant differential in price. So we're very confident that we have a very strong foundation or position in country hedging and to go back to sort of what Luciano was talking about all of this future all this new competition only reaffirms our optimism that we're on the right track that this is a mainstream long-term allocation for advisers. This is a different and alternative way to buy your international equities and we think it has a lot of a fields, lot of investors and you're seeing it through change behavior. But all of these people coming into the market is really validation and I think we'll need to much higher penetration rate for currency hedging versus unhedged international equity.

[Christopher Shutler:]

All right. Thank you.

[Operator:]

Thank you, and our next question comes from Adam Beatty with Bank of America. Your line is now open.

[Adam Beatty:]

Thank you and good morning. Wanted to ask about product trend one of the products is getting popularity in the active space and ETFs allocation kind of go anywhere type fund. And some of those are using or considering using ETFs. Is that part of your target market do you feel that you have suitable products for that space so what your thoughts on that? Thanks.

[Luciano Siracusano:]

This is Luciano. When we launched the product in the second quarter that does that on the bond side it's an unconstrained bond fund run for us but Western Asset Management. So we've innovated there we've taken advantage of the active exemption. We are of course looking at products and categories around the world. We have a very robust product development effort into the - see the opportunity to recent in the EPFs structure it really hasn't been done yet. We are always looking for we can take money from the mutual fund world.

[Amit Muni:]

Yeah. And just to be clear this is the one area of our business that we don't give full transparency for competitive reasons. Thanks Adam.

[Adam Beatty:]

Got it. Thank you. And just follow up on the exempt release and kind of the competitive landscape if you were there I know there are a couple other firms that have that once your sense I know it’s handicap regulatory and what have you but what's your sense of the ability about other firms do deploy that?

[Amit Muni:]

So, Adam its Amit. So I would say in the past getting to regulatory approval was a barrier to entry today it's not yes we just go through the process and get through regulatory approval. If you just kind of license third party index it can take you about 12 months to get your license not that hard. You something a little bit more - you want to be active management. If you want to use derivatives it's going to take you longer. So it's one of the benefits that we have as we have a broad exempt release. When I say what's the challenges now is really the barrier to success is having a product strategy that's what think what really makes it difficult. It's not to getting the regulatory approval for - what's you're going to do is once you finally get that regulatory approval process.

[Luciano Siracusano:]

And let me just add that being a pure play with no legacy issues encumbering is an advantage. So and that is true about ETFs meaning we're unencumbered by other structures and it's also true about self-indexing. So the largest ETFs sponsors have a legacy issue of third party indexing and it not that they can't also self-indexed, but it just changes their field for it. I think that we have done both we have self-indexed and we have very selectively licensed third party indexes and made those in very sort of proprietary ways as we did like the Barclays at 0 and negative duration. So I think we have a real good feel for it and it just a real strategic advantage to be the pure play.

[Adam Beatty:]

Got it. Those nuances are important. Thanks very much appreciate it.

[Operator:]

Thank you. And our next question comes from the line of Alex Blostein of Goldman Sachs. Your line is now open.

[Alex Blostein:]

Hey guys good morning. Question for you on the distribution landscape and particularly you've outside the US. It's obviously very nice to see that you guys are making a big push and it's an important market. But just kind a curious as your what are the biggest hurdles for really any ETF pro rata coming in and try to distribute new product whether it's from the channel penetration perspective or anything else. Thanks.

[Luciano Siracusano:]

So if we're talking about internationally, the dynamics are the same as in the United States. You have incumbent structures you have in many cases a less knowledgeable ultimate investor. And so it takes a lot of education. You have very strong incumbent players - there is a world leader in virtually every market around the world. So you really dealing with the same issues internationally whether it's Europe or in other international markets and when we still deal with these issues in the United States but it's becoming less so day to day.

[Alex Blostein:]

Okay.

[Operator:]

Thank you. And our next question comes from the line of Douglas Sipkin of Susquehanna. Your line is now open.

[Douglas Sipkin:]

Yeah. Thank you. Good morning guys. Congratulations on getting to the margin target first off, just a couple of quick questions on first the balance sheet I mean I know you guys are growth company and you're proving that out with the success of the European business but cash flow was really continue to build and I'm just wondering what point you maybe reevaluate the capital management policy I know you have a nice dividend there but what left of cash can you sort of maybe do it all where you're still investing for growth and maybe even giving a little bit more capital management back to investors.

[Amit Muni:]

Hey Doug its Amit. So when you look at our capital management plan that we have in place. We're generating about a maximum amount of cash. We have the ability to make the right investments in the business that we're focused on the growth. And we have the ability to keep dry powder in case we see opportunities ahead of us and we have a capital management plan that can return cash to our shareholders within it and some buyback. And we think currently right now that mix is right mix that have today.

[Douglas Sipkin:]

At some point do you guys I mean reevaluate that I'm just sort to just looking at the cash. You just under I think $200 million now and just continues to build and with the margins now the current pace probably plus would be in and about 50%. So just feels like maybe too close to being in a position to do even more. I mean I know I don't want to put pressure you guys but just feels like there is a lot of power I guess in the cash flow so. Okay that's fair. Secondly, yeah.

[Luciano Siracusano:]

Yeah this is something we evaluate every quarter. We just approved the $0.08 again it's something we evaluate every quarter we'll continue to evaluate it every. And as you did that we started with I think a surprising happy $0.08 a share. I think that surprised a lot of people we said we grow into it. But don't worry we do look at this every quarter.

[Amit Muni:]

I remember what we said before that. It feels obviously we're not a company at this with our cash flow. As we don't have a need for it we don't see opportunities will return it back to our shareholders.

[Douglas Sipkin:]

Great now that's helpful look at the high class problem. And then just secondly on the tax rate I noticed it picked down a little bit I mean are you what drove the tax rate because that was sort of I think in 42 to 43. I mean is it something coming out of Europe that drove that down a little bit.

[Luciano Siracusano:]

That's we had a little bit of an uptake last quarter and when we have to pay some state taxes when we reallocated our income to different states when we lowered our tax rate last year. And as a result of that we have some extra tax payments to certain states that cause a little uptake in the tax rate in Q1. So now that sort of been normalize now and that's how you see that little bit of down take into Q2.

[Douglas Sipkin:]

So what's the number roughly?

[Luciano Siracusano:]

So remember the US business is 38% and then the overall rate that we see for the US business of about 41 about 41.5% year-to-date that sort of a good number we think about it overall going forward.

[Douglas Sipkin:]

Okay great so when we think about modeling going forward. Did you see anything about 41.5 you suggest?

[Luciano Siracusano:]

Yeah 41.5 right now is a good number we can model.

[Douglas Sipkin:]

Okay perfect. Thanks a lot guys.

[Operator:]

Thank you. And I'm showing no further questions at this time. I like to turn the conference back over to Mr. Steinberg for closing remarks.

[Jonathan Lawrence Steinberg:]

I just want to thank all of you for your continued interest and supporting WisdomTree. We look forward to speaking to you next quarter. Thank you. Have a good day.

[Operator:]

Ladies and gentlemen thank you for participating in today's conference. This does conclude the program and you may all disconnect. Have a great day everyone.