The GQG Partners Inc (ASX: GQG) share price fell more than 4% after reporting its December 2024 monthly update.
GQG is a fund manager that provides funds management services across international equities, global equities, emerging market equities and US equities.
December 2024 update
The fund manager reported that its funds under management (FUM) ended December 2024 at US$153 billion, up from US$120.6 billion at December 2023 and down from US$159.5 billion at November 2024.
In terms of net flows of client money, the month of December 2024 saw an overall outflow of $0.2 billion. That includes a $0.4 billion outflows for its international equities segment, $0.1 billion outflow for global equities, $0.2 billion outflow for its emerging market segment and a $0.4 billion inflow for US shares. That’s not great news for the GQG share price.
The company said it experienced net inflows for the 2024 year of US$20.3 billion, compared to US$10.2 billion for the 2023 year.
GQG said that while it saw a net outflow for the month of December, the fourth quarter saw positive gross and net sales. It also noted the institutional channel “continued to see moderate redemption pressure from asset allocation and rebalancing changes.”
The funds management business believes that it continues to be “well positioned relative to the competition with strong long-term risk adjusted returns” helped by its distribution capabilities.
The business also noted that its management fees (which are a percentage of assets managed), rather than performance fees (which are linked to investment performance), continue to comprise the large majority of its revenue.
Is the GQG share price a buy?
One month of slightly negative outflows is not a major problem, but if it’s the start of ongoing outflows, then that could become a more concerning issue.
However, it could also be possible for GQG’s funds to deliver good performance in the coming year and beyond, which would encourage investors to stay with GQG and also attract more money.
To me, the business now seems to be trading on a low valuation with a good dividend yield – I’d call it a higher-risk buy, with the risk being FUM outflows.
