The GQG Partners Inc (ASX: GQG) share price is up another 1% after the market enjoyed the fund manager’s June 2024 update.
GQG has quickly become one of the largest fund managers on the ASX and the latest month was another positive update.
June update
The fund manager reported in its monthly update that total FUM rose to US$155.6 billion in June 2024, up from US$155.1 billion at 31 May 2024.
GQG saw each of its main investment strategies deliver FUM growth.
International shares saw FUM rise from US$58.9 billion to US$60.1 billion over the month.
Global shares FUM increased from US$37.6 billion to US$39.1 billion.
Emerging markets FUM went up from US$41.1 billion to US$43 billion.
US shares FUM grew from US$12.5 billion to US$13.4 billion.
Quarterly net inflows
The fund manager reported it experienced net inflows during the June quarter to US$6.5 billion. This is a key driver for GQG shares.
GQG’s net flows in 2024 to June 2024 were US$11.1 billion, up from US$6.2 billion in the same period of 2023.
It said it’s seeing positive gross sales across different channels and investment strategies.
In the second quarter of 2024, the business saw “moderate redemption pressure from asset allocation and rebalancing changes.” Those headwinds from the institutional channel have reportedly been offset by an acceleration of its wholesale and sub-advisory channels.
GQG then said:
We believe our strong risk-adjusted returns over the long term, in combination with our global, diversified distribution capabilities, position us well in the market. We anticipate continued positive new flows in 2024 with a solid pipeline of potential new FUM.
Is the GQG share price a buy?
The GQG share price has essentially doubled over the past year. It certainly isn’t cheap now, but a lot of that rise has been justified by the higher FUM that it has seen in the last several months.
Its revenue and earnings are largely linked to its FUM – it charges management fees but hardly any performance fees across its funds.
If the business keeps delivering good fund returns and attracting more FUM, then the next six months could be positive, though I expect volatility will come along at some point.
It’s one of the ASX dividend shares to watch, though there could be cheaper ones out there.
