So those are the three advantages that I like to focus on. In terms of the market opportunity, we’ve said cited cities said something like $5 trillion in tokenized assets, tokenized securities over the next five, 10 years, you’ll see people ranging from up to $10 trillion and some of their projections or things like that. I mean I think the big catalyst, a lot of people point to regulation I think the regulation is starting to get there. To me, it’s actually doing live product, right, going out there trying to acquire customers, putting stuff in the market, which you really haven’t seen so much yet in terms of the tokenization of world asset space. So that’s what we’re doing now with WisdomTree Prime. That’s what we’re doing with our institutional user portal.
And I think you’ll see some kind of continued growth and adoption from there.
Jonathan Steinberg: Mike, let me add. This is Jono. That, one of the real advantages, I would say, will be around the user experience. And by that, I mean you’re going to get much greater control of your assets as opposed to the infrastructure that exists today. Where your savings, your vesting and your payments are all connected much more closely. That kind of flexibility will prove to be I think, of tremendous excitement to investors over time. I think when you asked about like where will this go over time? I think that for those that can remember the early days of ETFs, they thought it might be a niche structure, but the user experience was so much better that it’s actually conquered every single liquid asset that exists.
And I believe that the trend line long-term for tokenization will be the same, but more so, so that everything, I believe, over periods of time will be tokenized and you’ll get not just things like crypto sitting seamlessly with traditional assets, you’re also going to see illiquid assets or private assets sitting seamlessly with liquid assets. And again, all of it much closer to greater functionality like payments. So again, we feel tremendously fortunate at WisdomTree to be launching within the end of this quarter, early next quarter really marketing nationally, but also to be ahead of everyone else in the market.
Michael Brown: Great. Thank you for all that color. That’s really, really fascinating. Maybe if I just change gears to USFR, I guess, with the Fed soon shifting to easing and timing is still unclear there. But how do you believe investor sentiment for the USFR product could progress in a declining rate environment? Could there be some growth headwinds, but ultimately, outlook is still good assuming rates still stay relatively high versus historical levels? And then conversely, 21% or so of your AUM is tied to fixed income. So how well do you believe the rest of the fixed income franchise will perform in what looks to be a great opportunity for fixed income flows as investors kind of reallocate.
Jonathan Steinberg: Good question. Thank you. Jeremy Schwartz, our global CIO, why don’t you take the first shot at this?
Jeremy Schwartz: Yes. No, this is a conversation we love having today. Because actually the environment for USFR, we think is actually still quite attractive today, and there’s an opportunity when we look at the performance through this cycle, USFR got close to 5.5% yield today and you look at where the 10-year is, it’s still 150 basis points above the 10-year. So the inverted yield curve, you have had no volatility because of the very stable rate resetting, the 1-week duration, there’s still an opportunity to grow USFR given the Fed would have to cut 6x to get you down to where USFR is today, and you look about the rising correlation between stocks and bonds, bonds aren’t diversifying stocks the way they used to because of the concerns about inflation.
And we think that’s a longer-term when you’re buying a 30-year bond, it’s not about the inflation dynamic this year, it’s what’s the inflation for the next 30 years. And so there is an opportunity that there’s still a very positive case. There’s still a lot of money in cash earning zero which is an opportunity for Prime, for people, both how [indiscernible] you could spend off of floating rate type treasuries earning 5.5% and not earn zero in your bank. But there is still an opportunity that people have 10% in cash and USFR can still take some more market share from that and also from bonds, which have a lot of volatility. But we do have beyond that, we have a very robust fixed income suite. We have a few multibillion-dollar core fund or two, particularly core funds that each have $1 billion that can help for people wanting to add duration with enhanced yield approach, including when we launched last year that generated $1 billion in its first year, and we’re continuing to launch existing and new funds.
We launched one in December as a core plus fund. We’ve got some more treasury funds to sort of help clients that became first-time users of WisdomTree with USFR. We’re looking to help them extend duration with some new launches as well. So there’s existing new products as we always do, but there’s still a great story on just the current market environment is still actually attractive for USFR.
Jonathan Steinberg: Thank you, Jeremy.
Michael Brown: Okay, great. Thank you very much.
Operator: Thank you. Next question is coming from Keith Housum from Northcoast Research. Your line is now live.
Keith Housum: Good morning guys. Please appreciate the color on the portfolio solutions as well. Just if you can dig a little bit deeper there. You guys mentioned trying to deepen the relationship with your customers there. How in fact, do you guys plan on deepening those relationships? And then what is your competition level at those people that you want to deepen your relationship with?
