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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At the time of publishing, William does not have a financial interest in any of the companies mentioned.
