Bill Katz is throwing some serious shade on the only publicly-traded pure-play ETF shop.

Jonathan Steinberg WisdomTree Investments, Inc. Chief Executive Officer, President

Chris Dieterich of Barron's reports that the Citigroup analyst is predicting tough times for New York City-based WisdomTree [profile]. Katz's 12-month price target on WETF (WisdomTree's ticker on the NASDAQ) is $7, which would be a 42-percent drop from its $12.07 price at market close on Tuesday.

Mister Market may have heard Katz's concerns. Yesterday WisdomTree's shares fell 4.56 percent to $11.52, even as the overall Nasdaq fell 1.1 percent. The stock is down 26.53 percent year-to-date.

WisdomTree claims about $45 billion in AUM. At Wednesday's close, its market cap was $1.51 billion, so in industry terms WisdomTree is priced at 3.4 percent of its AUM. (To get to a more typical industry valuation of two percent of AUM, with its current market cap, WisdomTree would need to add another $30 billion in AUM.)

Katz's concerns focus on two WisdomTree funds in particular, the WisdomTree Europe Hedged Equity Fund (HEDJ) and the WisdomTree Japan Hedged Equity Fund (DXJ). Combined, the two ETFs have about 55 percent of the firm's AUM; Katz worries that their peak popularity has passed and that competitors are nipping at their heels. 

Edited by: Neil Anderson, Managing Editor


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