WisdomTree Investments reported improving financial results in the third quarter of 2009, posting a $5 million loss, down from a $5.2 million loss in Q2.

Total revenues for the quarter rose 29 percent to $5.7 million, while costs rose 10 percent to $10.8 million.

Year-to-date, total revenues dropped 22.4 percent over the same period in 2008, due primarily to market conditions. Total expenses also declined by nearly 26 percent in the period, due to lower marketing and compensation costs.

The real story with WisdomTree, however, is flows: Can the company get enough new money into its ETFs to push the company to profitability? Toward that end, total assets under management increased 32 percent to nearly $5.5 billion from the second quarter’s record level. Net inflows into the company’s exchange-traded funds totaled $558 million.

WisdomTree CEO Jonathan Steinberg said in a release, “We continue to see strong net inflows in October, particularly in our Currency Income ETFs. As of October 28, total inflows into the currency family were $300 million, representing 25 percent of the category industry wide. We have taken an active role in educating financial professionals about the importance of currencies as an asset class within a diversified portfolio. We expect continued growth in this category.”

Still, to get to breakeven at today's revenue mix, the company will likely need to see its assets under management reach $6.5 billion, according to a company spokesman.

From a sector perspective, in the third quarter, WisdomTree’s global and international equity ETFs gained 41 percent in AUM over the second-quarter results, followed by a 26 percent growth in currency ETFs and 22 percent in domestic equity vehicles. By contrast, assets in fixed-income ETFs dropped 10 percent in the quarter.

You can read the presentation here.

This story originally stated that WisdomTree's breakeven AUM level was $10 billion, but the company had that estimate downwardly revised from previous quarters to reflect current revenue mix.