Ladies and gentlemen, thank you for standing by, and welcome to the WisdomTree First Quarter Earnings Call. [Operator Instructions] Please be advised that today's conference may be recorded. [Operator Instructions] I'd now like to hand the conference over to your host today, Mr. Jason Weyeneth, Director of Investor Relations. Please go ahead, sir.

Thank you, and good morning. Before we begin, I'd 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. A number of factors could cause actual results to differ materially from the results discussed in forward-looking statements, including, but not limited to, the risks set forth in this presentation and the Risk Factors section of WisdomTree's annual report on Form 10-K for the year ended December 31, 2019. WisdomTree assumes no duty and does not undertake to update any forward-looking statements. Now it's my pleasure to turn the call over to WisdomTree's Founder and CEO, Jonathan Steinberg.

Thank you, Jason, and good morning, everyone. I'll open the call with some comments on our business outlook before turning it over to our Global Head of Research, Jeremy Schwartz, to discuss product positioning and performance. Then Amit will discuss Q1 results and provide updated financial guidance. Then we will take your questions. First and foremost, I hope everyone and their families is healthy and safe. These are unprecedented times, and as we manage through this crisis, our priority remains to protect our most important assets: our employees and their families. To that end, we quickly pivoted to working from home for our entire global workforce. The combination of our investments in technology over the past several years and our business model allowed us to seamlessly switch to a remote environment. We utilize the most modern technology infrastructure, and our outsourced business model leverages the strength of the largest and best capitalized financial service firms in the world. While we hope for a near-term return to normalcy, we are very capable of operating remotely indefinitely with no compromise to our high standards of operational excellence and client service. We entered 2020 with significant momentum and believed we had reached an important inflection point in our growth trajectory. While the market volatility disrupted this momentum, the setback was only temporary, and we are regaining our momentum as we speak. Our 2020 plan remains intact. And as we discussed last quarter, we are focused on growth, performance and innovation. We expect the migration from mutual funds to ETFs to accelerate in 2020 as the superiority of the structure shines. This year should prove to be a difficult one for mutual funds, which are poised to deliver capital gains to fundholders as low-cost basis securities were sold to meet redemption requests during the…

Thanks, Jono. Starting on Slide 4, coming out of the crisis, we see increased demand for equities in an extended low interest rate environment and further believe recent government measures to counter the pandemic will drive inflation and increased demand for commodities. Our broad product offering with a strong performance position us well to capitalize on these sizable opportunities. One simple way to summarize performance utilizes Morningstar stars. We have over 60% of our U.S.-listed AUM in 4- and 5-star funds. They are top performers for their respective asset classes. Looking beyond the star ratings, 74% of our AUM is beating more than 70% of their peers, and roughly half our AUM is in funds in the top 2 deciles. Included in the 5-star bucket is 2 of our U.S. dividend strategies for U.S. large-caps and small-caps stocks. The case for [ generating ] remains quite strong, and we anticipate more flows to the dividend family from our model portfolio collaboration with Professor Siegel as well as broad usage of our income-oriented models and funds. To highlight a couple of other areas, as you can see on the chart on the right, our quality dividend growth suite with $4 billion of AUM has performed very well through the crisis and on a longer-term basis. Standouts from current AUM, flows, performance and the size of the future opportunity is quality strategies for the U.S. large cap and international developed large-cap growth, 2 of the most important equity allocations in global portfolios. On an asset-weighted basis, the funds in this suite outperformed beta by 140 basis points and active funds by [ 280 ] basis points in the March downturn. On a 3-year basis, they generate 40 basis points and 210 basis points of annual outperformance. This is Modern Alpha, an example…

Thank you, Jeremy, and good morning, everyone. Beginning on Slide 6. We started the quarter with strong momentum. Our AUM reached near an all-time high of $64.6 billion in mid-February. We generated over $1 billion of inflows by the end of February, and we had 6 months of positive flows in the U.S., including HEDJ and DXJ. However, we ended the quarter with assets under management of $50.3 billion after experiencing nearly $12 billion from negative market movement and outflows of $536 million, all due to the current market conditions. However, we have taken in approximately $1.6 billion of net inflows so far in April. Looking deeper at the flows, we generated $734 million of inflows from our European-listed products, representing 13% organic growth, driven largely by flows into our oil and gold products. We were the industry leader in flows in the energy ETFs, and this strong demand continued in April. On the U.S. side, we had outflows of $1.3 billion, of which HEDJ and DXJ made up 55% of those outflows. Despite that headline, we did see bright spots in that 40% of our funds generated inflows for the quarter. And in the volatile month of March, over 20% of our funds generated flows. Our ex state-owned emerging market fund, international hedged quality dividend growth and our U.S. dividend growth strategies generated almost $500 million of flows in the quarter. Now turning to the financial results on Slide 7. Revenues were just under $64 million for the quarter, down due to lower average AUM and a 1 basis point decline in our fee capture due to mix change. On a GAAP basis, we had a net loss of $8.6 million. Excluding nonoperating items, adjusted net income was $11.2 million or $0.07 a share. As we disclosed last quarter,…

Thanks, Amit and Jeremy. We can now open the call to questions.

[Operator Instructions] Our first question comes from Craig Siegenthaler with Crédit Suisse.

Just given the sharp decline in interest rates in the quarter, how you reposition your overall fixed income suite for the current backdrop, including some of the cash alternative products like FLOT?

Thanks Craig. Jeremy, would you take the first crack at that answer, please?

Yes. Great question, Craig. We've been -- the sizing on our team a lot about -- our Head of Fixed Income Strategy, Kevin Flanagan has been talking about a barbell, where we combine our floating rate treasury product, USFR, with our enhanced yield core, AGGY, which is the yield enhanced ag, to let people sort of toggle their duration. And that has really worked well for people. Both products have scaled meaningfully. USFR, if you think about the comments I made about a return to inflation next year, having a sort of floating rate vehicle at the short end of the curve could be really, really helpful looking forward. There's also been this little bit additional premium yield on this treasury space, even in government treasuries, no credit risk, that has made that a preferred vehicle over traditional T-Bills. So we've continued to see interest in that sort of flagship on treasuries compared to the bonds that you mentioned with more credit risk, which has come under more pressure. So the treasury and USFR is a good answer as well as our core yield enhanced core position that people can go for additional income given the historically low rates.

Got it. And actually, I misquoted the ticker. I actually meant USFR in my question. I got confused with the competing product. But can you talk about the sustainability of demand you're seeing from your commodity products in Europe, which go along with a lot of the themes, Jeremy, you were talking about earlier? And I was especially looking for color around CRUD, which has a lot of inflow momentum.

So Jeremy, why don't you start? And then Jarrett Lilien, our President and COO, maybe, Jarrett, you'll add on to Jeremy's comment if you have anything to add.

Great. So we outlined this idea that all this government spending, we think, can lead to more inflation pressures once the economy opens. So oil -- and is one of those perhaps more tactical specific items. We think the longer-term view for inflation coming back is a much bigger story next year. And so whether it's broad-based commodities, gold, the whole platform, really, we think, has a lot of longer-term interest in demand if our view that inflation coming back is correct. And so we think it can get broader beyond oil. But for sure, the interest in oil was very clear. Our market leadership position was very clear. We highlighted the 80% of AUM, that is our market share, but in flows basis, it was over 100%. And so we think the leadership position we have in oil has been well cemented there.

Yes. And I guess just adding to that a little bit. Really, it's about being well positioned in all of the forecast and all the views for the future, as Jere's mentioned, are there. But then our position in not only gold, but energy, industrial metals, those are leadership positions across the board with an overwhelming market share. And I believe, year-to-date, we are the #1 leader in bringing in new revenue to these products amongst all our competition. So we've got the product and we've got the performance. The other thing I'd mention is how good our team is. We've got this incredibly robust platform, very strong process, strong operations, strong structure, the most experienced team. And we are managing through unprecedented disruption. You've had the pandemic. And if we look at specifically oil, the pandemic reducing, obviously, demand and then OPEC deciding to have a price war at the same time and not really cutting supply by enough, you have a double whammy that's bringing unprecedented disruption and volatility to the market. And I think our team is doing an unbelievable job of just showing why we're the leader in the market.

And I'll just add, we have seen this unprecedented demand in oil. And you referenced CRUD, which has been the asset gathering leader. We have another -- a number of other funds against the same benchmarks. But CRUD is the one that has taken in, CRUD, the most. We have though temporarily halted creations in an abundance of prudence, really recognizing the unusual dynamic that's taking place in energy at the moment, but we think that will be a very short-lived halt. But net-net, the franchise has just been terrific. Thank you, Craig, for your questions.

Yes. And just adding to that, I mean, that just shows, again, the expertise that we've got in our team. And overall, in energy, 27 energy focused products taking in over $2.5 billion of flows year-to-date.

Our next question comes from Dan Fannon with Jefferies.

This is actually James filling in for Dan. So I appreciate the commentary on some of the tailwinds for the ETF structure, but there were, of course, some negative headlines on the vehicle kind of throughout the first quarter. So I was just curious as to how WisdomTree's product held up amid kind of market liquidity concerns. And then how that fits into your views going forward?

I think the negative headlines really only revolved around fixed income. But, Jarrett, why don't you add -- why don't you answer the question, as you see fit?

Yes. I mean, to me, that is one of the sort of frustrating things. People can persist and talk about the negatives of the structure, but where are they? Actually, it's been the opposite, even in the fixed income market, which is where people really had traditionally pointed to it. I think there's even article in the Financial Times this morning about how the structure has proven itself. So through this incredibly disruptive time, not only has the structure held up, but it's been a price discovery vehicle. It's been a liquidity vehicle, so I'd say the opposite. I'd say those are people holding on to a losing argument. And it's a really similar thing on the active management side. Again and again, active management underperforms. And every time there's disruption, people say, "Okay, well, maybe now active management will perform." Well, it never has in these situations, and it's not now. So again, the structure -- and one of the things that we look at with disruptions like this is how it accelerates trends in the market, and we see the trend of mutual fund to ETFs being accelerated right now, happened at the end of 2018, happened in the financial crisis in 2008. When there are disruptions in the marketplace, ETFs take sizable market share, and we look for that to happen again here. So the structure, direct answer to your question, is holding up extremely well. And more than that, I think it should be really getting rid of all of the critics at this point.

This is Jeremy. Just to add one performance point on the -- where I think most of the comments come on has been the high-yield bond market. And the people talk about the lack of liquidity. This is where we must use active managers to get access to these high-yield bonds at risk of defaulting. And that sort of narrative, we launched 2 -- these Modern Alpha, our own proprietary index strategies that screen for quality and fundamentals, ability to pay back the bonds. And I mentioned 60% of our AUM were in 4- and 5-star funds. Our 2 fundamental based high-yield funds are both 4 and 5 stars with really strong performance, and so being at the top of their high-yield category. So I'd say that was -- we look forward to the future asset gathering opportunity given the strong perform track record those 2 high-yield funds are generating.

Thank you, Jarrett. Thank you, Jeremy.

Our next question comes from Brennan Hawken with UBS.

Can you hear me?

Yes, we can.

Great. Just curious, I saw there was some debt paydown here this quarter. Could you maybe talk about how you're thinking about your plans for capital, whether or not paying down some debt is going to be a priority here, or whether or not you're thinking about buybacks? How do you balance that given the attractive valuation of the stock versus a need for some conservatism given the level of uncertainty in the marketplace?

Amit, why don't you take that question, please first?

Sure. Brennan, so as I mentioned in our remarks, our priorities of capital remains to continue to pay down our debt and continue to support the dividend. As far as buybacks, as I mentioned last quarter, because of some of the covenants that we have on our term loan, we're unable to buy back stock right now. We are in the process of refinancing our debt. We had to put that on hold given what was going on in the market. But we're going to start that process back up again as soon as it's practical and markets sort of stabilize, and we can get good terms and good pricing. But we feel comfortable when we're thinking about putting back capital, pay down the debt and supporting the dividend. Those are the 2 priorities of our capital right now.

Great. And Amit, apologies if you referenced this, but is there a way to think about where you guys would like to land as far as the ultimate leverage levels and how you calibrate for that?

Sure. I mean, a lot of it will depend upon our earnings power and the outlook that we see on our AUM. Our leverage today, we feel very comfortable with. The leverage that we took on when we first took on the term loan, we felt very comfortable with. So a lot of it will just depend on market outlook, but you could be assured we're not going to take on a term loan that has a leverage covenant that we feel uncomfortable with.

Our next question comes from Robert Lee with KBW.

This is Jeff Drezner on for Rob Lee. Just a quick question on expense guidance. I was just curious if the updated guidance includes the market rebound in April. Or is that as of quarter end?

Amit, why don't you take the question, please?

Yes. So that's as of -- that includes any rebound that we did see in April, so this is our most updated guidance.

Got it. Okay. And then just a follow-up on that. In terms of flexibility around that, if the market continues to rebound or if we see another downturn, how are you thinking about that?

Sure. So there's, obviously, flexibility that we have in our expenses. We do have variable expenses that are tied to AUM, predominantly our compensation and fund-related costs. So if we do see some sort of continued downturn, some of our expenses will naturally come down. If we do -- conversely, if we do see an uptick, we might see an increase in some of those expenses as well. So it really will just depend upon what's going on in the market at the time.

Our next question comes from Mike Carrier with Bank of America.

This is actually Shaun Calnan on for Mike. Just going back to the movement from mutual funds into ETFs with the realization of capital gains. So we saw large sell-offs in mutual funds in 1Q, and we're just wondering if you've already begun to see those flows into ETFs due to that? Or if that's something you would expect later in the year?

Jarrett, why don't you start and then maybe I'll follow-on after you.

Sure. Yes, big picture, we're seeing it. We -- also big picture -- for a while, this is going to be a lousy period for mutual funds. I mean, this is one of those situations where they could have negative performance but also be distributing taxable gains, which is about the worst customer experience that you could have and really points out one of the flaws in that structure. So we're seeing it. We expect to see it continue. As for our flows, immediately in March and April, we saw a very tactical short-term type moves into a lot of categories where we're not represented or underrepresented and out of some categories where we are represented. So that was the short-term sort of impact, but we're already starting to see that normalize. As Jere said, we have 26, 4-and 5-star funds, over 60% of our AUM in those funds. We're extremely well positioned and now beginning to see that more normalized reaction and distribution and beginning to see those flows widen out and include us in the products.

And I'll just add, I would say that I would expect the attrition or the outflows in mutual funds to accelerate as you get closer to year-end so that you -- if you're a talented adviser, it's your duty to get your customers out before they are hit with these capital gains, particularly when those funds are probably down. For WisdomTree, it's a huge opportunity around education for ETFs, really helping with our solutions and, quite frankly, our outsourced CIO model business where we're seeing a lot of interest. And though, as Jarrett said, March and April, it was all very, very tactical, but we're starting to see people behave more strategically on a going-forward basis. So very encouraged by the trend but more to come.

And let me add one more thing, Jono. Important to remember, I mean, February seems like 5 years ago. But at the end of February, in the U.S., we had just finished 6 consecutive months of inflows, including HEDJ and DXJ, and that was the first time that, that had happened in over 5 years -- a great streak going. March and April, very disruptive for everybody, but that momentum has just been -- has been interrupted and is now continuing.

Thanks for your question.

Our next question comes from Michael Cyprys with Morgan Stanley.

I was just hoping we could dive into the model portfolios a little bit more -- hoping you can give us a little bit more color on what the flows were that you saw amongst your products into, or out of models in the quarter, where the AUM stands today that you guys see sitting in models. And maybe you could talk about some of the initiatives that you guys have in place to get your products into various model portfolios in the coming months ahead.

Mike, thank you for the question. Jarrett, why don't you start? And then, Jeremy, I think you'll probably have stuff to add.

Sure. Well, first of all, it's again another one of those trends that we see accelerating. We look at this disruption has accelerated mutual funds to ETFs, reviews of asset allocation which actually favor quality income-generating equities, which is one of our sweet spots. But another trend is also models and outsourced CIO. So we're seeing an acceleration of that. From time to time, we will update on numbers, but we're not giving out specific numbers today. But what I can say in the models, which to me is really encouraging, is we had net inflows into models in the first quarter. So even in this time of disruption, net inflows into models, obviously, there was market move. But we're now back up to the new highs in our overall AUM and models. And why, obviously, this is exciting is, this is sticky, long-term money. As Jono mentioned in his prepared remarks, we have had a lot of great success in signing up some great partners such as LPL, Park Avenue, Cetera, all excited by that, but the number of RFPs that we have in the pipeline right now is -- has accelerated. And so we expect to be bringing on a number of new partners. So overall, again, it's back to the theme of being well positioned, of having continued momentum and major macro trends accelerating in our favor.

Yes. And this is Jeremy. Just a few quick comments. This is going to be -- this month is the 19th year I've been working with Professor Siegel and the 15th year full-time for WisdomTree. And the model initiative that we've got with Professor Siegel, the weekly call series that we're doing with him that Jono emphasized on the engagement from advisers, it's some of the most exciting things since I've been here. And when I think about how we're trying to package our solutions with the model platform, it's really some of our best execution of Professor Siegel's leading thoughts, our leading thoughts, how do we get broader scale and adoption with advisers not focusing on single tickers? Going to a model-oriented solution set is a really big trend for us, and we're excited about that future run rate adoption. I mean, we're obviously going to continue focusing on the single tickers, and we still have a lot of great solutions. But that model opportunity is really big and exciting.

Thanks, Jeremy.

And any other thoughts maybe that you would -- can you hear me, okay?

Yes, we can.

Yes. Okay, great. Any additional thoughts you could share maybe on third-party models? So maybe not -- I understand and hear you on your specific models, but what about the models on, say, other wire house, IBD, RIA type platforms and getting your single tickers into other people's models? Just any color you could share and thoughts around traction and initiatives there.

Part of the LPL was -- some of our exposure being added to their models. So we are seeing that win. I have expressed in the past sort of a frustration with sort of Modern Alpha or strategic beta being used more broadly within sort of the wires and third-party models. It seems like it's getting better. And I would say that our model business is like a Trojan horse, really penetrating in major ways getting Modern Alpha really to advisers in large quantity of tickers and significant percentages in those portfolios. So again, I think it's an -- I've been -- again, going back to the theme that Jarrett was talking about, we are seeing an acceleration because of the crisis. And I think that it will prove to be an accelerant for adoption of model Modern Alpha in third-party models as well as all models being adopted by advisers.

Our next question comes from Keith Housum with Northcoast Research.

Just a little housekeeping here. In terms of -- you guys have been closing a few funds here. Is there a rule of thumb in terms of how much you guys are saving from closing each fund?

Amit, would you take that question, please?

Sure. Keith, it's Amit. So it's approximately a rule of thumb is about $150,000. It costs us -- that's the minimum fees to launch a fund. So that's a good rule of thumb to keep in mind.

Got you. And then in terms of the -- regarding some of discretionary costs that you're talking to as you're looking out for the revised guidance here. I'm trying to reconcile that with your efforts to grow the assets under management. And I understand that calls with Professor Siegel seems to be a relatively new engagement. But is there other things you're doing to, I guess, maximize your dollars in terms of how you guys try to drive AUM?

Sure.

Jarrett, would you like to start on that?

Yes. That's one of the exciting things about the moment that we're in. We're in an environment where a lot of things are turned upside down. Where we are remote, our customers are remote. And being in touch and having them be engaged is more important than ever. And so far, I think we're punching way above our weight and succeeding there. As Jono mentioned, again in prepared remarks, that we've had quality interactions with 48,000 global customers. On average, that was 5 interactions with each of those customers. So about 240,000 interactions. And that was things, yes, like the Siegel calls or calls with other thought leaders. But video calls, webinars, we do something that we just instituted, which are smaller interactions on very specific subjects with members of our research team, do a number of those a day. So again, on a Siegel call, you'll have something between -- you'll have 800 to 1,000 listeners on one of those calls. We have this other program, research hours, where you might have 20 to 40 people on one of those calls, so more personal and more focused. We've been increasing the number of blogs that we put out. We've made our web tools more accessible. Jono mentioned the market volatility center, and we're exploring a whole bunch of other things. I think, honestly, this is an area where we're going to outcompete. And right now, I think we are punching above our weight. But it's sort of all hands on deck, how can we creatively [Audio Gap] our clients in a value-add way. And right now, it's working in spades. And I think client engagement leads directly to flows. So this is a top initiative for us today and going forward.

I'll just add -- and I'll just add that some of the savings, obviously, travel and T&E, that's just taken out of our hands, that savings just happened. Pulling back on television, I think, is not costing us anything in this environment. I'm not sure that, that's a constructive medium in light of all of the news around the virus and the shutdown of the country. So net-net, this was easy decisions to make, and we're not expecting it in any way to reduce our ability to grow, period.

And I kind of say the opposite. I mean, I'm personally proud of our team's discipline. We're making good decisions, but sometimes they're hard. Closing a fund is never an easy decision. But if it's subscale, we can spend that money better somewhere else. We'd like to be on TV. It's been another area where we innovated -- the whole ticker ad was really something we innovate [Audio Gap] and that we can spend that money better in these virtual engagements, and they're paying dividends. So it's discipline. You saw our margins actually go up, but we're spending the money better and, I think, getting better results for it.

We have a follow-up question from Michael Cyprys with Morgan Stanley.

I just wanted to circle back to some of the points around volatility in the marketplace and maybe specifically on some of the commodity ETFs and the oil ETF specifically. I think, Jono, you had mentioned you had halt some of the creation redemptions. I would just hope -- I'm hoping you could give us a little bit of an update there on how you're thinking about the product, the vehicle there, and how, if in any way, that's altered your views around leveraged ETF products and ETFs that invest in the futures contracts.

It's a great question. Jarrett, you want to start?

Sure. Again, I think this gets back to illustrating the strength of the platform, our process, our operations and our structure. Again, unprecedented times of disruption. To your question, we've had some of the highly-leveraged products actually terminate. We've had 3 of those oil products, all -- 2 that were 3x long and 1 that was a 3x short, but that's actually how they were made to work. If the market moves 33% against you and you've got 3x leverage, the fund is over. And so that is operating as it was drawn up, and we will look at the appropriate time to relaunch some of those products. We've also suspended creations in now 3 products. And as Jono said, we expect those suspensions to be somewhat short-lived. But that's just about prudence in managing through a volatile market. You want to do what's good for your customer but what's also good for your partners in the market. And so I think the platform is operating extremely well. And the lessons that we're learning are, obviously, things that we will learn, and we can enhance the platform going forward. But when I look at it, one of the things we're learning is just how good our platform, how good our structure and how good our team is.

Let me add. So Jeremy, go ahead, Jeremy, and I'll end. Go ahead.

I think there's one also interesting point on oil, in particular, that also highlights the strength of the platform beyond where the disruption was the heaviest. So the negative oil prices was very specific to West Texas Intermediate, which is called WTI oil that goes through Cushing, Oklahoma, like one spot for delivery. And the issue with all these storage tanks were full and you had pay [indiscernible] the oil. There is also Brent oil, which we have a very robust platform around. It never went negative, considerably higher prices, given the much more flexible delivery of Brent oil. And we actually have a meaningful amount of AUM, 30% of the $2.2 billion. Over $650 million of our assets are in Brent oil. And if Brent becomes a longer-term winner from just the disruption in WTI, then we have a robust platform for people to participate in that Brent oil contract as well.

And let me just conclude. We're very committed to the long-short business particularly in -- for certain investors that are tactical, this kind of market volatility has created significant opportunity to make a lot of money, so we are committed to it. In terms of futures as opposed to physically backed product where you own gold or own bonds or equities, certain exposures can only be accessed through futures or swaps. We do that when it is necessary. And we choose -- we have world-class partners. But that does add a level of stress when you see this macro decline around the world. There is stress to the system. I don't want anyone on the phone to think that we're not working hard to manage through this kind of stress. I think we're doing a good job at it. But the futures for oil is the only way to access it. So again, we're completely committed to it going forward.

Our next question comes from Ryan Bailey with Goldman Sachs.

Perhaps just one question for Jono. We tend to agree with you on the path of opportunity to take share on the other side of volatility from mutual funds. I was just wondering what your views are on retail or adviser sensitivity to pricing once we get that potential surge back in ETF flows.

We're very comfortable with our pricing. Again, we, for the -- if we do beta, we want to be first to market with beta because it is where really how you get best economics, though beta can be difficult to defend other than pricing, other than establishing onscreen liquidity and ticker awareness. So we have done a very good job of doing that. And I think we have tremendous economics relative to others, as an example, on, let's say, gold in Europe. In terms of the rest of our business, which is proprietary Modern Alpha trying to beat the market, the most important number is after fee returns. We feel very strongly positioned and very comfortable with the way we have positioned it. Also, when you think about fee compression, it has mostly been -- or where it is most dramatic is in beta. Now prior to this sell-off from the crisis, it's been almost a straight up market. So beta, regardless of pricing, has been a very smart asset allocation decision. As the markets have turned over, beta has led the markets down. Again, it gives you a great opportunity to sell differentiated value-add strategies. I feel very good particularly because alpha is mostly away from WisdomTree. In the mutual fund structure, we feel incredibly well positioned to help transition advisers who are trying to avoid capital gains at the end of the year to transition their book of business into WisdomTree Modern Alpha strategies. So again, we feel good about the pricing, if that was the question. I hope I answered it.

Yes. That answer made a lot of sense.

And that will conclude today's question-and-answer session. I'd like to turn the call back to Mr. Steinberg for closing remarks.

I just want to thank all of you. I want to wish you all -- I hope you're healthy and safe, again, and managing through the crisis with as little disruption as possible. Thank you for your interest in WisdomTree, and we'll speak to you again in next quarter. Bye, everybody.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.