WisdomTree Investments’ shares are a good buy and should yield solid returns ahead, largely because of the continuing expansion of the ETF industry, according to a report released by Citigroup.

The bank reaffirmed its “buy” rating for the $797 million-in-market-cap WisdomTree stock in a research note last week, arguing that the current environment is still conducive to “broad structural growth for passive” investing and that that phenomenon underscores WisdomTree’s strength.

New York-based WisdomTree, which is the only purely ETF-focused firm whose shares are publicly traded, could see a 32 percent gain in its share price in the next year, Citi estimated. That would put a share of WisdomTree stock at $8.50—a reflection of the company’s expected product and margin growth.

What’s interesting is that part of WisdomTree’s success appears to a simple claim to seniority. Citi made the argument that even as the ETF market grows by leaps and bounds, fewer and fewer companies are managing most of the assets, leaving the new “entrants” with a tough—if not impossible—row to hoe.

It’s a case of the big getting bigger, and WisdomTree, which offers a mix of passive and actively managed funds, is one of them.

The company has been serving up ETFs since June 2006, and is now the seventh-largest ETF provider, with total assets under management of some $15 billion across its 48 funds, according to data compiled by IndexUniverse.

Citi estimates that 95 percent of total U.S. ETF assets are in the hands of only 10 ETF sponsors, WisdomTree being one of them. That level of consolidation is unlikely to change much as newcomers battle for market share in a crowded ETF space.

As of Friday, the top-10 largest ETF firms by assets under management controlled more than $1.125 trillion of assets, a sizable chunk of the $1.179 trillion total market size.

“If you want exposure to the greatest structural change to business in 50 years, [WisdomTree] is the play,” the bank said in its report. WisdomTree is what Citi called “an asset manager with good growth [and margin] prospects.”

WisdomTree listed on the Nasdaq on July 26, 2011 under the ticker “WETF.”

The company’s shares were changing hands on Tuesday morning at $6.98 a share—up more than 8 percent from $6.44 on the day before Citi analysts published their note on June 29.