Financial Data and Key Metrics Changes - The company ended the quarter with record AUM of $115.8 billion, up 5.5% from the prior quarter [4] - Net inflows totaled $3 billion, reflecting an annualized organic growth rate of 11% [4] - Revenue for the quarter was $108 million, down slightly from the previous quarter due to two fewer trading days and lower average fee capture, but up 11.6% year-over-year [6][7] - Adjusted net income for the quarter was $23 million, or $0.16 per share, impacted by seasonal compensation [7] Business Line Data and Key Metrics Changes - In the U.S., the company generated over $1.8 billion of inflows, including into fixed income and U.S. equity products [5] - In Europe, over $1.1 billion of inflows were generated, primarily into the USITS ETF suite, with $770 million into the European Defense Fund launched in March [5] - The model portfolios business reached AUA of $4 billion, up 4% year-to-date, reflecting a nearly 20% annualized organic growth rate [12] Market Data and Key Metrics Changes - The company experienced positive market movement in commodities, which helped offset headwinds in the U.S. market [6] - The European Defense Fund has been a standout, bringing in $770 million in Q1 alone and over $700 million in April [10] Company Strategy and Development Direction - The company is focusing on adapting to evolving market dynamics and has introduced unique investment ideas, such as the geopolitical risk-aware model portfolios [11] - There is a strategic emphasis on deepening client relationships, with a target to grow the total number of clients using WisdomTree products by 4% this year [12] - The company is also expanding its digital assets offerings, with plans to enable on-chain transfers and broaden functionality in the coming months [14] Management's Comments on Operating Environment and Future Outlook - Management noted that the company is well-positioned in a more volatile market, with a balanced AUM and strong client momentum [9] - The CEO expressed confidence in the company's ability to drive long-term value creation for shareholders, highlighting the efficiency of the business model [21][22] Other Important Information - The company has seen significant growth in its tokenized products, with over $100 million in inflows year-to-date [19] - The company is actively working on AI deployment across various functions to enhance performance and decision-making [30][31] Q&A Session Summary Question: Opportunity for WisdomTree Prime - Management discussed the importance of on and off ramps for interacting with stable coins and other crypto assets, with a measured rollout planned for the summer and expanded marketing in September [24][26] Question: Update on Crypto Funds and New ETFs - The company highlighted its focus on Bitcoin in the U.S. and a broader 20-coin basket product in Europe, with over $100 million in inflows for the crypto offering in Europe this year [36][37]

Summary of Key Points from the Conference Call Industry and Company Overview - The focus is on the **Chinese equity market**, specifically indices such as **Hang Seng**, **HSCEI**, **MSCI China**, and **CSI 300** [2][45]. Core Insights and Arguments 1. **Index Target Increases**: The year-end index targets for Hang Seng, HSCEI, MSCI China, and CSI 300 have been raised to **25,800**, **9,500**, **83**, and **4,220**, respectively, indicating an upside of **9%** for Hang Seng, HSCEI, and MSCI China, and **8%** for CSI 300 from current levels [2][45]. 2. **Earnings Growth Forecasts**: Earnings growth forecasts for MSCI China have been adjusted to **7%** for 2025 and **9%** for 2026, driven by improved earnings estimates and macroeconomic outlook [2][49]. 3. **Earnings Beat**: MSCI China is experiencing its first earnings beat after **13 consecutive quarterly misses**, with a **net 8%** earnings beat reported for 4Q24, marking a significant recovery [3][9]. 4. **Valuation Re-rating**: MSCI China's valuation is expected to align with MSCI EM, with a **12-month forward P/E** forecast raised to **12.5x**, closing the previous discount of **6%** [4][51]. 5. **Geopolitical Risk**: The geopolitical landscape has improved, reducing the equity risk premium for China, which is expected to enhance its investability [33][51]. Additional Important Insights 1. **US Tariff Exposure**: MSCI China has only **3%** revenue exposure to the US, the lowest among major EM trading partners, making it relatively insulated from potential US tariff hikes [7][38]. 2. **Southbound Flow**: There has been a significant increase in southbound capital flows into Hong Kong, with a record net inflow of over **US$100 billion** in the previous year and **US$50 billion** year-to-date [52][55]. 3. **Sector Performance**: Technology and AI-related sectors are showing stronger momentum, with recommendations to be overweight in these areas while waiting for broader market improvements [8][49]. 4. **Market Concerns**: Key concerns include potential escalations in US-China tensions, macroeconomic slowdowns, and deflationary pressures, which could impact market performance [8][62][63]. Conclusion The Chinese equity market is showing signs of recovery with improved earnings forecasts and valuation adjustments. However, geopolitical risks and macroeconomic factors remain critical considerations for investors. The overall sentiment is cautiously optimistic, with recommendations to focus on high-quality stocks and sectors poised for growth.