The GQG Partners Inc (ASX: GQG) share price has jumped after the business announced a large rise of funds under management (FUM) in February 2024.
GQG is a fund manager and it’s based in the US and has four main areas of FUM: international shares, global shares, emerging market shares and US shares.
February 2024 FUM growth
GQG revealed that its FUM rose US$10.5 billion to US$137.5 billion, with each investment category growing.
The US shares category grew by US$1.8 billion to US$11.5 billion, which was an increase over one month of 18.5%, international shares rose by US$3.7 billion to US$36 billion, emerging market shares increased by US$2 billion to US$37.1 billion.
Some of this growth came from the investment performance of GQG’s funds, and some came from net inflows of extra money that investors added.
As of 29 February 2024, it experienced net inflows for the year-to-date period of US$3 billion. In January 2024, it saw net inflows of US$1.9 billion, so February’s net inflows were US$1.1 billion.
What to make of this for the GQG share price
Clearly a US$10.5 billion increase of FUM is a great development. It’s an 8.25% rise in just one month.
The business is doing well with its investment performance within the funds and it continues to attract more investor money.
FUM movements are so important for fund managers because it’s usually the size of the FUM that dictates how much revenue and profit it can generate.
The business generally charges lower management fees than what many other (Australian) peers do and it charges hardly anything in terms of performance fees. I think GQG can continue attracting a good level of new FUM into the business.
It’s paying an appealing dividend and doesn’t trade on a demanding valuation considering how quickly it’s growing, though we should expect the FUM to drop if the global share market falls. I’m a fan of this business, though the GQG share price is not as cheap as it was.
