Platinum Asset Management Ltd (ASX: PTM) has released its July Funds Under Management (FUM) update, with the share price closing the day up 1.14%.
Platinum Asset Management is an Australian based fund founded in 1994 that is focused on global equities. Platinum was co-founded by one of Australia’s most respected investors, Kerr Neilson who is still the company’s largest shareholder (owning about 40%).
Platinum’s flagship offering, the Platinum International Fund has achieved a compounded return of 12.3% per year since inception (30 April 1995).
This compares very favourably with the MSCI AC World Net Index (in Australian Dollars) which generated a return of 7.1% over the same period. However, in recent years it has dramatically under-performed this benchmark. Over the last five years, the Platinum International Fund achieved a return of 9.7% per annum compared to the benchmark return of 13.1%.
Platinum advised the key reason for their recent underperformance within their “Market Update – 19 June 2019” on their website.
To quote directly: “Growth factor has now outperformed value for nine years – this is the longest period in a dataset back to the 1930s”.
Andrew Clifford, Platinum’s current CEO / Chief Investment Officer and Co-founder of Platinum, commented that in his, “30+ years of managing money he can’t remember a time when you could buy so many large cap companies, with solid industry positions on single digit P/Es”.
Although initially I felt sceptical about this statement, I really cannot question the opinion of someone who has such a stellar long-term investing track record!
Platinum’s July Funds Under Management Update
In July 2019, Platinum experienced net outflows of approximately $108 million. At the end of July, Platinum had FUM of $25.15 Billion.
Platinum’s FUM is dwarfed by rival fund manager Magellan Financial Group Ltd (ASX: MFG) which had $89.73 Billion FUM at the end of July.
Are Platinum Asset Management Shares “A Buy”?
Overall, I think the Platinum Asset Management share price is starting to look appetising. At the current share price, Platinum trades on trailing fully-franked dividend yield of 6.64%!
FUM has been in decline on the back of under-performance. However, I believe there will be a time in the next 5-10 years when Platinum’s investment approach again delivers sustained out-performance and FUM will start to lift off.
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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, William does not have a financial interest in any of the companies mentioned.