Platinum Asset Management Ltd (ASX: PTM) has released its June 2019 funds under management (FUM) update, is it a buy?
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.
Platinum’s June 2019 Funds Under Management
The Asian focused fund manager revealed that its June 2019 funds under management (FUM), before annual distributions, grew by around $650 million to $25.83 billion.
However, we can’t forget about the cash distributions that are paid to unit holders net of re-investment. Platinum revealed that the distributions total $814.2 million, leaving the FUM at $24.77 billion after distributions.
In June 2019 Platinum experienced net outflows of $228 million, which included net outflows from the Platinum Trust Funds of approximately $151 million. The net outflows excluded the impact of distribution re-investment of $487 million.
Is The Platinum Share Price A Buy?
Between February 2019 and today, the Platinum share price has been at a high of $9.15, it dropped to $4.34 by May 2017, rose to $8.72 in February 2018 and has since fallen to $5.08 today. Quite the rollercoaster.
Platinum’s FUM has suffered from concerns about the Asian sharemarket ever since US President Donald Trump started his campaign to try to get China to play on an equal playing field in terms of technology and IP. A truce may be agreed in the shorter term, but I think this issue will be ongoing for a long time.
Most fund managers are also finding it difficult to increase FUM because of the increase of low cost index investing compared to the relatively higher costs of active investing.
I’m just now sure if Platinum can succeed in this environment, which is why I’ve put it in my ‘too hard’ basket. I find it much easier to evaluate the reliable businesses in the free report below instead.
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