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GQG (ASX:GQG) share price falls despite strong September update

The GQG Partners Inc (ASX:GQG) share price is down over 1% after its funds under management (FUM) September 2024 update.

The GQG Partners Inc (ASX: GQG) share price is down over 1% after its September 2024 update.

GQG is a fund manager that’s headquartered in the US.

GQG’s September update

The fund manager reported that its funds under management (FUM) grew by approximately $800 million over the month to US$161.6 million at September 2024, up from US$160.8 billion at 31 August 2024.

During the month of September, GQG experienced US$2.2 billion of net inflows, with half of those inflows going to its international equities segment.

In 2024 to date (to 30 September 2024), the fund manager said it had experienced US$17.4 billion of net inflows, with US$8.2 billion of that being for international equities and US$5.1 billion for emerging market shares.

For the three months to 30 September 2024, GQG reported its net inflows came to US$6.2 billion.

GQG said that it continues to see “positive” gross sales across channels and investment strategies.

Headwinds

It wasn’t all positive for the GQG share price. GQG noted that in the third quarter, its institutional channel continued to see moderate redemption pressure from asset allocation and rebalancing changes.

The fund manager explained these headwinds from the institutional channel have 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 ongoing growth of FUM is an excellent sign for future profitability, in my opinion.

GQG’s management fees, which are a percentage of assets managed, make up the vast majority of its net revenue, rather than performance fees. That’s due to the design of the GQG’s funds – it regularly outperforms the market with its investment funds.

It also has a management team that are “heavily aligned” with shareholders and clients, so they are heavily focused on and committed to GQG’s future.

I think GQG’s returns-focused investment style and its setup with reasonable fees is a recipe for long-term success, as long as its FUM keeps arising (aside from occasional market volatility). I’d call the GQG share price a longer-term buy at this price.

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