Is the tide finally turning for ASX listed fund managers? These 2 are headed in the right direction

Nick Sundich Nick Sundich, July 19, 2023

ASX listed fund managers have had a terrible 18 months share price wise. But some companies have seen lukewarm reaction to their latest FUM figures, so is this turbulent time over? For some companies, it could well be.

 

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Tough times for ASX listed fund managers

ASX listed fund managers have struggled to make the returns they did between 2008 and 2021 in what was mostly a low interest rate environment.

Some individual stocks like Magellan (ASX:MFG) have seen substantial shrinkages in their FUM not just through poorer performance but through investors (individual and institutional alike) withdrawing their money.

Not all stocks did as bad as Magellan (which lost more than half its FUM in 12 months), but even some of the better performers like Australian Ethical (ASX:AEF) and GQG (ASX:GQG) have been sold off, unfairly.

But we think the tide could be turning, at least for these two fundie stocks.

 

Australian Ethical Investment delivers 48% FUM growth

Australian Ethical Investment (ASX:AEF) provided a Quarterly and Financial Year-end update this morning and boasted $9.2bn in FUM, 48% higher than the full year. It also reported positive net flows of $85m in June alone and $172m for the entire June quarter.

Customer numbers increased over 50% in 12 months to over 127,000 and it recorded a $266m investment performance during the quarter. Yes, the growth was inflated by the acquisition of Christian Super. But even if you exclude the $1.93bn in contributions from that entity, AEF still has $7.3bn in assets it would have had anyway – 17% more than 12 months ago.

AEF shares rose modestly this morning. Although we would like to see the share price surpass $4 (at the very least) before concluding that the stock is in an uptrend, we think this morning’s update was good news.

 

Australian Ethical (ASX:AEF) share price chart, log scale (Source: TradingView)

 

GQG Partners to turn around?

GQG Partners (ASX:GQG) is in a similar position. This money manager serves institutions predominantly and is actually located in the US. It last updated shareholders more than a week ago, but recorded 5.6% FUM growth in the month of June alone, from US$98.5bn to $104.1bn.

We would like to see this stock surpass $1.75 before concluding definitively that it is in an uptrend. But again, if the latest update is anything to go by, this company is also headed in the right direction.

 

GQG (ASX:GQG) share price chart, log scale (Source: TradingView)

 

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