WisdomTree CEO on ETFs, IDing Macro Trends, and More | At Barron's
Summary
Defense Momentum: WisdomTree highlights surging interest in European defense equities, launching dedicated European, Asian, and global defense ETFs with strong inflows and NATO spending as a catalyst.
Gold Bull Case: Bullish on gold as a store of value supported by central bank buying, inflation hedging, and geopolitical risk, with significant AUM in physical gold products.
Gold Overlays: Introduced equity strategies with gold overlays to ease advisor allocation to alternatives, noting outperformance amid gold strength and low-cost implementation.
Dividend Strategy: Advocates dividend investing via dividend-weighted indexing to boost yields and after-fee returns versus cap-weighting, validated by Jeremy Siegel and applied globally.
International Trends: Notes growing investor diversification away from U.S. equities, improved sentiment toward Europe, and strong flows into Japan-focused ETFs aided by renewed interest from major investors.
WT Investment Case: Pitches WisdomTree (WT) as a buy, citing rapid organic growth, EPS CAGR of ~25% over five years (higher recently), competitive outperformance vs. peers, and scale across ETFs, tokenization, and privates.
Market Structure: Emphasizes the superiority of the ETF wrapper and WisdomTree’s speed in self-indexing to rapidly bring thematic products like EM ex-state-owned to market.
Risk/Opportunity: Highlights geopolitical drivers for defense spending, and the relationship between gold and bitcoin as parallel stores of value, with gold benefiting from sustained institutional demand.
Transcript
Hello everyone and welcome to At Barrens. I'm Andy Sir and welcome to our guest Jonathan Steinberg, founder and CEO of investment company Wisdom Tree. Jonathan, great to see you. >> Thank you. Thank you for having me. >> So Wisdom Tree is a publicly traded investment company known for its ETFs. Um, how else do you describe the firm though, Jonathan? >> We're an asset manager. Um, so you know, we call ourselves uh an innovator in within financial services, but truly we're in the asset management space. >> And how did the firm get started? I mean, you've been in business for many years now. We both have been. Um, you had a company and it sort of morphed and I think 20 years ago was sort of when Wisdom Tree was founded. There's Michael Steinhart was an investor if you remember him. Jeremy Seagull from Wharton's involved. Still involved. >> Still involved. >> So So tell us about the the genesis. >> So I started the company as individual investor magazine back in 1988 and our idea was unbiased independent research for the masses. Um and we took it from something like 20,000 to a half a million subscribers. And I was I loved my journalism. I was editor-inchief and CEO and the research department reported into me and we had passionate investors. Um, but that's 1988. I think in 1993 Netscape came out and I could sense, you know, free information and so I knew that I had an issue really long-term issue. Um, I did a story in 1997 on ETFs when the rapper only had $40 billion worldwide. And as a research company, I built my own indexes. And so I went about um I sold my media assets. I held my indexes. It was a hard journey as a I was already public. Um I had to raise some additional money. I raised it from Michael Steinhardt, Jeremy Seagull, and um Jim Robinson, the former CEO of American Express. But to make that transition, I actually had to sort of delist from NASDAQ to the Pink Sheets. I ended up selling um uh uh control to that consortium to Michael and Jim and Jeremy. Um, I sold them straight common at 16 cents a share. I raised $9 million. Um, and on the announcement, we went up 38,000% in a day. um I still didn't have any customers or SEC approval for what I did which was self-indexing but I was able to take that money and that uh group of men gave me credibility in the market and I from there um fast forward to today um we manage $ 160 billion uh it's a better business than oldline publishing and so I made my transition. So tell us about the specific strategy early then we can talk about how you pivoted and the new things you're doing but early on Jeremy Seagull and you kind of worked up something that was sort of a specific model right so Michael Steinhart wanted to back me um and what he needed was someone to validate the IP um and Jeremy Seagull validated what I created which was dividend waiting so we dividend weighted the world. Um, if you think about what the S&P 500 is, it's cap weighted. Um, it's an active construction. What we did was self-indexing and that I had to get through the SEC approval. But, um, if you take what all dividend paying companies in the United States, we would call that the dividend stream. If you weight it by every company's proportional contribution to the dividend stream, if that's how you weight it, what we found was it raised your yields and it really gave you better after fee returns or better returns. Um, when you're cap weighted, you're always overweight. The most overvalued stocks were sectors. Now beta and cap waiting has been a very effective strategy. When Michael asked for someone to validate Jeremy Seagull, who was a um one of the original near original investors in Vanguard, but this was sort of at the top of the dot bubble and he realized that there was a flaw in the methodology. So when he saw what I was doing, he said to and he reworked all of my back test. The numbers actually got a little bit better. And he said, "Michael, this is the best approach to indexing I've ever seen." Michael said, "I'm going to then back him. Would you like to be involved?" Jeremy said, "Yes." And we're off to the races. Jeremy is still involved. He's now our senior economist. He's retired from teaching. >> Yeah. A Wharton guy. You're a Wharton guy, too? >> Yes. But I never graduated. >> Oh, you did? All right. Um, so but but the strategy that original strategy as you suggest has its ups and downs because you know when you have like a a go- go growth big waiting then then you get a little bit in the doghouse there and it's sort of like es and flows with that specific strategy. I know you do different things I want to talk about that but that core strategy does have its up and downs. >> So first of all we did 20 funds in a day. Now in the US using dividends that would make you more valueoriented and since I when I launched >> since I've launched >> value has been out of favor almost exclusively until recently. Okay. Yes. >> Internationally almost everyone pays a dividend and so it wasn't value there. Now when I got to ETFs I launched my funds I so we're about to celebrate our 20th anniversary in June. Yeah. Um so we did 20 funds in a day. Six of them were domestic equities. 14 were international. The strategy has really served well worked well um throughout the period. >> It was never um my idea that that's all I would ever do ever. >> I do. But what I was able to do, I had one methodology that allowed me to compete with Vanguard, >> right, >> globally. There a lot of leverage to this idea. And so we did something, you know, very quickly like um 30 funds in, you know, in 90 days or something. And I went very aggressively. Um, I had a lot of conviction that the ETF was a better rapper than the mutual fund. Um, because I was already public, I was a very I had nothing to hedge myself against. I didn't have to, you know, I didn't have my foot in both camps. So, I really played a very large role in trying to educate the market on the the superiority of the rapper. And today obviously that rapper has won you know universally >> it's ETFs I mean you were right there. So okay so let's talk about some of these other areas you got into initially and then gradually and then now you're into some very you know new things like blockchain farmland privates and stuff but between that and the early days what were you doing >> so I started with those I so in one day I did the developed world >> then I did emerging markets then I did more in the US then we started adding growth then we started adding currency hedging um so I mean it just kept evolving And again, it was never about having just that one idea. Um, it was about building um aggressively um a franchise with it that was really ETF focused and um it's just worked out so well. You know, 20 years later, we're $160 billion. >> Yeah. How many ETFs do you have and what's your global footprint? How many countries are you in? How many people work there? give us some metrics in >> we have about um globally about 400 ETFs. >> Um we have $90 billion $92 billion coming out of the US. We have about 65 billion coming out of Europe. Um and then we have about almost a billion dollars in tokenization and $2 billion in farmland. Um so that gives us this $ 160 billion footprint. Um it's a very good business model. So we are 350 employees worldwide [snorts] and 40 of those are in digital assets. So if you put them to the side, >> we're managing 160 159 billion with uh you know uh 300 employees roughly. I mean it's amazing. >> And Janna, what is the most popular ETF right now or what are the most popular ones? Um I mean you know are you saying what is most popular today or what is largest? >> Both. >> So what's most popular today would be our European defense fund. So early last year let's say in March of last year we launched the first pure basket of European defense stocks and it's raised about $5 billion. It's been explosive. Um, as Trump spoke about the need for NATO to fund more of their own self-defense, it really invigorated that theme. And so we've now launched around that theme, European defense, Asian defense, and global defense. And we've done it not just in the Europe, but also in the United States. So that's um my sort of something that's very hot right now. Um in the US my largest flowing ETF right now is my Japan um uh my Japan fund which is uh you know Japan has been um a niche market for most investors but it's been very helpful since Warren Buffett started to really buy and you know Japan had been down for 30 years they you know what I did was called fundamental waiting Um the actual first fundamentally weighted exposure in the world is someone GDP weighted EPHA and there was a moment back in the 80s when Japan was larger than the US. So it was 80% of EPHA. So J G uh GDP waiting of EHA brought it down to a more normal waiting. Um >> in the US my actually my largest fund is floating rate treasuries. It's about a 17 or 18 billion dollar fund. >> I'm fascinated that European defense fund idea and it makes so much sense. So, so you see a macro trend unfolding, you identify it and you say, "Wow, I can do an ETF based." How quickly can you go soup to nuts on that? So, one thing that really separates us from everyone else, um, in the old days, if you had an idea, you would go to an index provider and you would license from them IP. If you had an idea, you could go to them, you could ask them to create something. What my what I did 20 years ago, what I got unique exemptive relief at the time was for self-indexing. So, we are able to um put a fund in the market the fastest we've ever done it. my um global CIO was on the road and he met a Texas pension fund and we had a very large footprint in emerging markets. He said, "Well, this is all interesting, but what I want is exstateowned emerging markets and we thought about it and did some research, found that you if you're stateowned, you have more than one, you're serving more than just the shareholder. So, um, we launched that fund in a hundred days and it's a couple of billion dollars, but that pension fund never came in. >> But it was a good idea. >> But it was a good idea. >> Yeah. That's amazing. So, Europe continues to be hot. I mean, it was a great market last year and I heard that the market continues to be hot and the ETF market >> so there is exploding as well. >> So, there's investing in European companies. It has not been as it's done better. It hasn't had explosive flows, >> but it is more in favor than it's been in many years. I mean, you were talking about um value and small caps. They've been out of favor for, you know, almost since I launched my company. International equities have been out of favor almost until just recently also. Um so again, one of my initial overweights out of favor. you are seeing right now investors trying to diversify away from US equities. And so that's one element driving flows into European exposures. But if you're thinking about the ETF industry globally, really there are two markets. There's the United States >> and there's Europe. >> There are some local markets like Korea, but it's a closed market for the Koreans or the Japanese market is solely for the locals. Um, no, no foreign but person or entity is really going into Japan and getting an exposure from the Japanese listed ETF. >> Jonno, I read that uh metals now represent over 25% of your AUM, both physical and overlay products. First of all, explain what that means. And then secondly, is this a boom that's going to go bust? Um so gold we manage about let's say 25 or 26 or seven billion dollars in physical gold. [snorts] Um >> so what does that mean is the ETF is backed by the >> for every Yes. 100% backed. So every So um I've actually visited the gold in the HSBC vault. It's >> in New York. >> No, it's in London. You can tell me. >> Well, you can't see it. I mean they it's it's secret. They put a bag over your head. Uh they take you to it. The people that work the people that work in the vault tell people they work in archives and it is very very secret stuff. >> You're kidding about the bag thing though. >> No. And the um but I did bring them donuts. Um but you can't I mean it's really >> a secret. Okay. Um it's one of the >> It's like MI6 or something, right? >> It's very exciting. Um now so we're of the I think the fourth largest manager of gold in the world. Um so State Street's the largest EyesShare's the second Invesco now Wisdom Tree. Um so that's physical gold. What we've also done though is so if you think about gold it's an alternative store of value. >> Um often it does better in inflationary movements. It also does well as an offset to sort of global political crisis, right? Um what's really been driving gold for the last few years is central banks around the world are trying to diversify away from their dollar exposure. They saw what we did during when Russia invaded Ukraine. They were cut off from the financial system. So under a Trump world, the central banks have no desire to stop buying gold. They are really buying gold. They're buying gold more than the retail investor um globally. So I mean you understand markets, you know, more buying than selling, gold goes up. So gold has been trading incredibly well. I think the underpinnings for gold um which has a store of value for centuries isn't going anywhere and they seem to have some very interesting um characteristics which makes us bullish on it. Now there are a couple of other things. Bitcoin which is also an alternative store of value they actually did a better job of selling the role of Bitcoin in the portfolio than gold did. Um but they serve a very similar role in the portfolio. Um so that's another thing that like there is now a there was always a relationship between gold and silver. There is also a relationship between gold and bitcoin and bitcoin cannot go to you know a half a you know $500,000 a coin without gold trading up as well. So, um, it now Bitcoin's been down, but gold has been soaring. I think partly because for the last 15 years, it was all Bitcoin, not gold. So, gold has caught up. You asked an interesting question though about the gold overlays. If you are trying to buy into alternatives, what do you The question any advisor is asked is what am I going to sell to buy this? So we've created um funds, we have a family of funds um efficient capital. So within it a very consumerfriendly use of leverage, a basket of 500 equities that uses a gold overlay 20 basis points. So it's an alter comes out of your sort of your S&P 500 exposure. And in a market where gold is the best performing asset class, this fund has beaten it's three years old. It's raised about $600 million and has made it very easy for advisors to allocate. Um what's interesting if you look at you know if you go back to sort of Jack Bogle the founder of Vanguard and his approach to investing own the world of liquid assets proportionally to their market cap. That's his idea. >> So under that scenario gold would be about 12% of your portfolio. Most people have never bought any gold. So, we've tried to create a product for advisors and for retail that would make it easier for them to allocate to gold. We just recently launched tips plus a gold overlay as well. >> Well, I want to change gears here a little bit. Um, John, I want to ask you about um your personal side a little bit. Your father Saul was a finance year, >> pretty famous guy here in New York City on Wall Street. What did you learn from him? >> So, first of all, my dad was instantly successful. He created the computer leasing industry. It was out of a paper that he wrote at at Wharton. So that's when IBM had like near monopoly. So he went to the judge who wrote the decree that forced uh the allowance of um third party leasing on the main frames. So he and there it was just paperwork. You already had the computer. It was at your desk. So he was instantly successful and went public very very early. So one, all I knew was financial services and being public. So my dream was to run a publicly traded financial service company. But he was also just a very creative businessman. He created Telmundo. We owned days in. He did a lot of interesting things. We would talk business and study what is a great business and there are very few great businesses and there are very few businesses that don't have to evolve over time. Um I my dad was an operator but he was also transactional. He did a lot of M&A and things you know and he had like a conglomerate right so he was different when I created wisdom tree um I saw that it had characteristics to be a great business and um it's people light capital light it's on the right side of you know uh it has a you know we're not brain surgeons but we are fiduciaries you know it has a a moral compass to it. Um, and so I've, you know, been doing this now for 20 years at Wisdom Tree and it's just this wonderful experience of building a great business. One other thing that my dad did, he did acquire, he was the first to acquire an insurance company before Warren Buffett or Larry Tish um, for the float, right? But the company he acquired went back to 1792. It was one of the oldest companies in America and it would always struck me how could a company last for centuries. Now I started in 1988 so I'm 40 years in on this. Um but to actually go for centuries a lot of elements have to happen. Um you have to scale which is the biggest thing. You have to have a culture that can evolve business. You know, not everyone's Hines ketchup or something where you don't have to evolve at all. Think about our historical past, right? Print. If you didn't evolve, you got, you know, innovated out of business. So, I've been very um I've pushed on innovating along the way. Um and so, he really gave me um a background of appreciating the all of the different elements. As CEO, I have to focus on the customer, the employee, and the shareholder. >> Final quick question. The stock is publicly traded, as I mentioned. You've got about uh what, a half a billion in revenues, market cap of 2.2 billion. Stock's been on a good run, got a PE of 22. Why should investors buy this stock now? >> Um, well, we are one of the fastest growing organic growth asset managers. Um we so that's one element. We've been growing our earnings per share um uh for the last 5 years at about a 25% kagger. more recently like in a 50% kager for the last three years. um the um I think we you know we're in the right areas our footprint global ETFs tokenization privates we're in a very attractive area and so for the last five years we have actually done better as a public company than BlackRock every year for the last five years but it isn't so easy as a small public company two and a half billion dollars to get investor attention but we've been doing we're doing better and better we're scaling we've really hit a level of scale. So it seems very timely right now. >> Jonathan Steinberg, CEO of Wisdom Tree, thank you so much for joining us. >> Andy, great to see you. Thank you. >> This is At Barrens. I'm Andy Sirwer. We'll catch you next time.
WisdomTree CEO on ETFs, IDing Macro Trends, and More | At Barron's
Summary
Transcript
Hello everyone and welcome to At Barrens. I'm Andy Sir and welcome to our guest Jonathan Steinberg, founder and CEO of investment company Wisdom Tree. Jonathan, great to see you. >> Thank you. Thank you for having me. >> So Wisdom Tree is a publicly traded investment company known for its ETFs. Um, how else do you describe the firm though, Jonathan? >> We're an asset manager. Um, so you know, we call ourselves uh an innovator in within financial services, but truly we're in the asset management space. >> And how did the firm get started? I mean, you've been in business for many years now. We both have been. Um, you had a company and it sort of morphed and I think 20 years ago was sort of when Wisdom Tree was founded. There's Michael Steinhart was an investor if you remember him. Jeremy Seagull from Wharton's involved. Still involved. >> Still involved. >> So So tell us about the the genesis. >> So I started the company as individual investor magazine back in 1988 and our idea was unbiased independent research for the masses. Um and we took it from something like 20,000 to a half a million subscribers. And I was I loved my journalism. I was editor-inchief and CEO and the research department reported into me and we had passionate investors. Um, but that's 1988. I think in 1993 Netscape came out and I could sense, you know, free information and so I knew that I had an issue really long-term issue. Um, I did a story in 1997 on ETFs when the rapper only had $40 billion worldwide. And as a research company, I built my own indexes. And so I went about um I sold my media assets. I held my indexes. It was a hard journey as a I was already public. Um I had to raise some additional money. I raised it from Michael Steinhardt, Jeremy Seagull, and um Jim Robinson, the former CEO of American Express. But to make that transition, I actually had to sort of delist from NASDAQ to the Pink Sheets. I ended up selling um uh uh control to that consortium to Michael and Jim and Jeremy. Um, I sold them straight common at 16 cents a share. I raised $9 million. Um, and on the announcement, we went up 38,000% in a day. um I still didn't have any customers or SEC approval for what I did which was self-indexing but I was able to take that money and that uh group of men gave me credibility in the market and I from there um fast forward to today um we manage $ 160 billion uh it's a better business than oldline publishing and so I made my transition. So tell us about the specific strategy early then we can talk about how you pivoted and the new things you're doing but early on Jeremy Seagull and you kind of worked up something that was sort of a specific model right so Michael Steinhart wanted to back me um and what he needed was someone to validate the IP um and Jeremy Seagull validated what I created which was dividend waiting so we dividend weighted the world. Um, if you think about what the S&P 500 is, it's cap weighted. Um, it's an active construction. What we did was self-indexing and that I had to get through the SEC approval. But, um, if you take what all dividend paying companies in the United States, we would call that the dividend stream. If you weight it by every company's proportional contribution to the dividend stream, if that's how you weight it, what we found was it raised your yields and it really gave you better after fee returns or better returns. Um, when you're cap weighted, you're always overweight. The most overvalued stocks were sectors. Now beta and cap waiting has been a very effective strategy. When Michael asked for someone to validate Jeremy Seagull, who was a um one of the original near original investors in Vanguard, but this was sort of at the top of the dot bubble and he realized that there was a flaw in the methodology. So when he saw what I was doing, he said to and he reworked all of my back test. The numbers actually got a little bit better. And he said, "Michael, this is the best approach to indexing I've ever seen." Michael said, "I'm going to then back him. Would you like to be involved?" Jeremy said, "Yes." And we're off to the races. Jeremy is still involved. He's now our senior economist. He's retired from teaching. >> Yeah. A Wharton guy. You're a Wharton guy, too? >> Yes. But I never graduated. >> Oh, you did? All right. Um, so but but the strategy that original strategy as you suggest has its ups and downs because you know when you have like a a go- go growth big waiting then then you get a little bit in the doghouse there and it's sort of like es and flows with that specific strategy. I know you do different things I want to talk about that but that core strategy does have its up and downs. >> So first of all we did 20 funds in a day. Now in the US using dividends that would make you more valueoriented and since I when I launched >> since I've launched >> value has been out of favor almost exclusively until recently. Okay. Yes. >> Internationally almost everyone pays a dividend and so it wasn't value there. Now when I got to ETFs I launched my funds I so we're about to celebrate our 20th anniversary in June. Yeah. Um so we did 20 funds in a day. Six of them were domestic equities. 14 were international. The strategy has really served well worked well um throughout the period. >> It was never um my idea that that's all I would ever do ever. >> I do. But what I was able to do, I had one methodology that allowed me to compete with Vanguard, >> right, >> globally. There a lot of leverage to this idea. And so we did something, you know, very quickly like um 30 funds in, you know, in 90 days or something. And I went very aggressively. Um, I had a lot of conviction that the ETF was a better rapper than the mutual fund. Um, because I was already public, I was a very I had nothing to hedge myself against. I didn't have to, you know, I didn't have my foot in both camps. So, I really played a very large role in trying to educate the market on the the superiority of the rapper. And today obviously that rapper has won you know universally >> it's ETFs I mean you were right there. So okay so let's talk about some of these other areas you got into initially and then gradually and then now you're into some very you know new things like blockchain farmland privates and stuff but between that and the early days what were you doing >> so I started with those I so in one day I did the developed world >> then I did emerging markets then I did more in the US then we started adding growth then we started adding currency hedging um so I mean it just kept evolving And again, it was never about having just that one idea. Um, it was about building um aggressively um a franchise with it that was really ETF focused and um it's just worked out so well. You know, 20 years later, we're $160 billion. >> Yeah. How many ETFs do you have and what's your global footprint? How many countries are you in? How many people work there? give us some metrics in >> we have about um globally about 400 ETFs. >> Um we have $90 billion $92 billion coming out of the US. We have about 65 billion coming out of Europe. Um and then we have about almost a billion dollars in tokenization and $2 billion in farmland. Um so that gives us this $ 160 billion footprint. Um it's a very good business model. So we are 350 employees worldwide [snorts] and 40 of those are in digital assets. So if you put them to the side, >> we're managing 160 159 billion with uh you know uh 300 employees roughly. I mean it's amazing. >> And Janna, what is the most popular ETF right now or what are the most popular ones? Um I mean you know are you saying what is most popular today or what is largest? >> Both. >> So what's most popular today would be our European defense fund. So early last year let's say in March of last year we launched the first pure basket of European defense stocks and it's raised about $5 billion. It's been explosive. Um, as Trump spoke about the need for NATO to fund more of their own self-defense, it really invigorated that theme. And so we've now launched around that theme, European defense, Asian defense, and global defense. And we've done it not just in the Europe, but also in the United States. So that's um my sort of something that's very hot right now. Um in the US my largest flowing ETF right now is my Japan um uh my Japan fund which is uh you know Japan has been um a niche market for most investors but it's been very helpful since Warren Buffett started to really buy and you know Japan had been down for 30 years they you know what I did was called fundamental waiting Um the actual first fundamentally weighted exposure in the world is someone GDP weighted EPHA and there was a moment back in the 80s when Japan was larger than the US. So it was 80% of EPHA. So J G uh GDP waiting of EHA brought it down to a more normal waiting. Um >> in the US my actually my largest fund is floating rate treasuries. It's about a 17 or 18 billion dollar fund. >> I'm fascinated that European defense fund idea and it makes so much sense. So, so you see a macro trend unfolding, you identify it and you say, "Wow, I can do an ETF based." How quickly can you go soup to nuts on that? So, one thing that really separates us from everyone else, um, in the old days, if you had an idea, you would go to an index provider and you would license from them IP. If you had an idea, you could go to them, you could ask them to create something. What my what I did 20 years ago, what I got unique exemptive relief at the time was for self-indexing. So, we are able to um put a fund in the market the fastest we've ever done it. my um global CIO was on the road and he met a Texas pension fund and we had a very large footprint in emerging markets. He said, "Well, this is all interesting, but what I want is exstateowned emerging markets and we thought about it and did some research, found that you if you're stateowned, you have more than one, you're serving more than just the shareholder. So, um, we launched that fund in a hundred days and it's a couple of billion dollars, but that pension fund never came in. >> But it was a good idea. >> But it was a good idea. >> Yeah. That's amazing. So, Europe continues to be hot. I mean, it was a great market last year and I heard that the market continues to be hot and the ETF market >> so there is exploding as well. >> So, there's investing in European companies. It has not been as it's done better. It hasn't had explosive flows, >> but it is more in favor than it's been in many years. I mean, you were talking about um value and small caps. They've been out of favor for, you know, almost since I launched my company. International equities have been out of favor almost until just recently also. Um so again, one of my initial overweights out of favor. you are seeing right now investors trying to diversify away from US equities. And so that's one element driving flows into European exposures. But if you're thinking about the ETF industry globally, really there are two markets. There's the United States >> and there's Europe. >> There are some local markets like Korea, but it's a closed market for the Koreans or the Japanese market is solely for the locals. Um, no, no foreign but person or entity is really going into Japan and getting an exposure from the Japanese listed ETF. >> Jonno, I read that uh metals now represent over 25% of your AUM, both physical and overlay products. First of all, explain what that means. And then secondly, is this a boom that's going to go bust? Um so gold we manage about let's say 25 or 26 or seven billion dollars in physical gold. [snorts] Um >> so what does that mean is the ETF is backed by the >> for every Yes. 100% backed. So every So um I've actually visited the gold in the HSBC vault. It's >> in New York. >> No, it's in London. You can tell me. >> Well, you can't see it. I mean they it's it's secret. They put a bag over your head. Uh they take you to it. The people that work the people that work in the vault tell people they work in archives and it is very very secret stuff. >> You're kidding about the bag thing though. >> No. And the um but I did bring them donuts. Um but you can't I mean it's really >> a secret. Okay. Um it's one of the >> It's like MI6 or something, right? >> It's very exciting. Um now so we're of the I think the fourth largest manager of gold in the world. Um so State Street's the largest EyesShare's the second Invesco now Wisdom Tree. Um so that's physical gold. What we've also done though is so if you think about gold it's an alternative store of value. >> Um often it does better in inflationary movements. It also does well as an offset to sort of global political crisis, right? Um what's really been driving gold for the last few years is central banks around the world are trying to diversify away from their dollar exposure. They saw what we did during when Russia invaded Ukraine. They were cut off from the financial system. So under a Trump world, the central banks have no desire to stop buying gold. They are really buying gold. They're buying gold more than the retail investor um globally. So I mean you understand markets, you know, more buying than selling, gold goes up. So gold has been trading incredibly well. I think the underpinnings for gold um which has a store of value for centuries isn't going anywhere and they seem to have some very interesting um characteristics which makes us bullish on it. Now there are a couple of other things. Bitcoin which is also an alternative store of value they actually did a better job of selling the role of Bitcoin in the portfolio than gold did. Um but they serve a very similar role in the portfolio. Um so that's another thing that like there is now a there was always a relationship between gold and silver. There is also a relationship between gold and bitcoin and bitcoin cannot go to you know a half a you know $500,000 a coin without gold trading up as well. So, um, it now Bitcoin's been down, but gold has been soaring. I think partly because for the last 15 years, it was all Bitcoin, not gold. So, gold has caught up. You asked an interesting question though about the gold overlays. If you are trying to buy into alternatives, what do you The question any advisor is asked is what am I going to sell to buy this? So we've created um funds, we have a family of funds um efficient capital. So within it a very consumerfriendly use of leverage, a basket of 500 equities that uses a gold overlay 20 basis points. So it's an alter comes out of your sort of your S&P 500 exposure. And in a market where gold is the best performing asset class, this fund has beaten it's three years old. It's raised about $600 million and has made it very easy for advisors to allocate. Um what's interesting if you look at you know if you go back to sort of Jack Bogle the founder of Vanguard and his approach to investing own the world of liquid assets proportionally to their market cap. That's his idea. >> So under that scenario gold would be about 12% of your portfolio. Most people have never bought any gold. So, we've tried to create a product for advisors and for retail that would make it easier for them to allocate to gold. We just recently launched tips plus a gold overlay as well. >> Well, I want to change gears here a little bit. Um, John, I want to ask you about um your personal side a little bit. Your father Saul was a finance year, >> pretty famous guy here in New York City on Wall Street. What did you learn from him? >> So, first of all, my dad was instantly successful. He created the computer leasing industry. It was out of a paper that he wrote at at Wharton. So that's when IBM had like near monopoly. So he went to the judge who wrote the decree that forced uh the allowance of um third party leasing on the main frames. So he and there it was just paperwork. You already had the computer. It was at your desk. So he was instantly successful and went public very very early. So one, all I knew was financial services and being public. So my dream was to run a publicly traded financial service company. But he was also just a very creative businessman. He created Telmundo. We owned days in. He did a lot of interesting things. We would talk business and study what is a great business and there are very few great businesses and there are very few businesses that don't have to evolve over time. Um I my dad was an operator but he was also transactional. He did a lot of M&A and things you know and he had like a conglomerate right so he was different when I created wisdom tree um I saw that it had characteristics to be a great business and um it's people light capital light it's on the right side of you know uh it has a you know we're not brain surgeons but we are fiduciaries you know it has a a moral compass to it. Um, and so I've, you know, been doing this now for 20 years at Wisdom Tree and it's just this wonderful experience of building a great business. One other thing that my dad did, he did acquire, he was the first to acquire an insurance company before Warren Buffett or Larry Tish um, for the float, right? But the company he acquired went back to 1792. It was one of the oldest companies in America and it would always struck me how could a company last for centuries. Now I started in 1988 so I'm 40 years in on this. Um but to actually go for centuries a lot of elements have to happen. Um you have to scale which is the biggest thing. You have to have a culture that can evolve business. You know, not everyone's Hines ketchup or something where you don't have to evolve at all. Think about our historical past, right? Print. If you didn't evolve, you got, you know, innovated out of business. So, I've been very um I've pushed on innovating along the way. Um and so, he really gave me um a background of appreciating the all of the different elements. As CEO, I have to focus on the customer, the employee, and the shareholder. >> Final quick question. The stock is publicly traded, as I mentioned. You've got about uh what, a half a billion in revenues, market cap of 2.2 billion. Stock's been on a good run, got a PE of 22. Why should investors buy this stock now? >> Um, well, we are one of the fastest growing organic growth asset managers. Um we so that's one element. We've been growing our earnings per share um uh for the last 5 years at about a 25% kagger. more recently like in a 50% kager for the last three years. um the um I think we you know we're in the right areas our footprint global ETFs tokenization privates we're in a very attractive area and so for the last five years we have actually done better as a public company than BlackRock every year for the last five years but it isn't so easy as a small public company two and a half billion dollars to get investor attention but we've been doing we're doing better and better we're scaling we've really hit a level of scale. So it seems very timely right now. >> Jonathan Steinberg, CEO of Wisdom Tree, thank you so much for joining us. >> Andy, great to see you. Thank you. >> This is At Barrens. I'm Andy Sirwer. We'll catch you next time.