Why Shares of WisdomTree Investments Are Down 10% Today

By Jordan Wathen Markets Fool.com

Image source: Getty Images.

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What happened

Shares of WisdomTree Investments, Inc. (NASDAQ: WETF) are down about 10% as of 2:30 p.m. EST as investors show their disappointment with the company's fourth-quarter earnings and outlook for 2017.

So what

WisdomTree's largest and most successful products endured a challenging year in 2016. Its hedged equity ETFs, which make up the largest portion of its assets under management, saw their assets decline to $18.8 billion at the end of 2016, down from $33.3 billion at the end of 2015.

Things aren't going much better for its smaller ETFs. The company wrote down the value of its Boost subsidiary, which manages exchange-traded products on foreign markets. WisdomTree no longer expects Boost to be profitable in 2017, and suggested that it could take two to three years for its international segments to reach profitability. That leaves the domestic business (largely supported by just a handful of funds) to pay the bills until its new projects can attract more AUM.

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Now what

WisdomTree has planted many seeds all around the world by developing or acquiring ETF and ETP managers in new markets, but investors are concerned about when its seeds will turn into saplings and when it will be able to harvest profits from its newest funds.

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Jordan Wathen has no position in any stocks mentioned. The Motley Fool recommends WisdomTree Investments. The Motley Fool has a disclosure policy.