The ongoing trade discussions between the US and China is affecting everything Asian related on the ASX, including the Platinum Asset Management Ltd (ASX: PTM) share price.
Platinum Asset Management was founded in 1994, one of the co-founders was leading investor Kerr Neilson. Platinum is a fund manager that aims to provide investors exposure to international shares using a contrarian, long-term and bottom-up investment process. Platinum’s International Fund has delivered a 12.1% per year compound return since 30 April 1995.
Why Platinum Shares Are Down 2%
The Platinum share price is down 2% despite unveiling a reasonably pleasing funds under management (FUM) update after the market had closed yesterday.
At the end of April 2019 Platinum had total FUM of $26.58 billion, up 3.2% from the figure at 31 March 2019.
In April 2019, the fund manager said it experienced fund outflows of approximately $116 million, which includes net outflows from the Platinum Trust Funds of around $105 million. This means the growth in FUM came from the performance of its funds and the Asian share market.
However, investors aren’t too keen on Asian shares this week as they worry about the effect that a tariff hike could have on the Asian sharemarket, which is mostly where Platinum invests.
Legendary investor Warren Buffett recently said that a true trade war would be bad for the entire world, not just the US and China. The rest of Asia (and Australia) would also be affected, which is why investors have sent the share prices of Asian shares down a bit this week.
If the value of Platinum’s portfolios go down then it certainly loses some management fees, which are generated from the amount of funds it manages, although outperformance fees won’t necessarily be affected.
An additional problem is that Platinum’s investors may decide to pull money out of the fund manager if they are frightened about what the near future holds.
I would rather think about investing in the leading ASX growth shares in the free report below compared to Platinum whilst the chance of a trade war is high.
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Disclaimer: Any information contained in this article is limited to general financial/investment advice only. The information has not taken into account your specific needs, goals or objectives, so please consider consulting a licenced and trusted adviser before acting on the information. Please read The Rask Group’s Financial Services Guide (FSG) for more information. This article is authorised by Owen Raszkiewicz of The Rask Group, which is a corporate authorised representative No. 1264179 of Strawman Pty Ltd (ACN: 610 908 211) (AFSL: 501 223).
At the time of publishing, Jaz does not have a financial interest in any of the companies mentioned.