HNW investors spur spike in FUA outflows: Netwealth
Netwealth has published its results for the December quarter of 2022, reporting total funds under administration (FUA) of $62.4 billion, up 10.2% on the previous corresponding period.
Total FUA growth was stunted by a 42% plunge in net inflows, down from $3.6 billion as at 31 December, 2021 to $2.1 billion.
This was the result of a 65.6% spike in outflows ($2 billion), offset by inflows totaling $4.1 billion — albeit down 14.7% on the previous corresponding period.
Meanwhile, total funds under management (FUM) grew 4.5%, closing the December quarter at $14.4 billion.
However, FUM net inflows also slumped, down 56.7% on the previous corresponding period to $364 million — driven by a 68.4% fall in managed account net inflows, which totaled $244 million as at 31 December, 2022.
This was partially offset by a 94.3% surge in managed funds net inflows, which rose to $120 million.
In a statement to the ASX, Netwealth attributed weakness in net inflows to the “uncertain economic environment” and recent changes in financial market sentiment.
According to the firm, these conditions “adversely impacted”:
- The timing of committed transitions and subsequent inflows in 1H23; and
- The quantum of outflows for the December quarter.
The group claimed outflows were “proportionally above” average due to partial withdrawal of funds from high net wealth (HNW) and mid-market/institutional account holders.
Despite comparative weakness in net inflows over the December quarter, Netwealth told shareholders it remained in an "excellent financial position", reporting strong profitability, cash generation, high levels of recurring revenue, and low capital expenditure.
AUTHOR
Charbel Kadib
Recommended for you
Pinnacle has reported a 151 per cent rise in net profit after tax in its half-year results, helped by overseas expansion and affiliate performance fees with further international deals in the pipeline.
Global asset manager Janus Henderson generated more than US$2 billion in net inflows during 2024, thanks to its strengthened intermediary channel and M&A activity.
Amid the rising demand for more flexible private equity investment options, LGT Capital Partners has launched a semi-liquid fund for wholesale investors in Australia and New Zealand.
The departure of Gerald Stack from Magellan could lead to redemptions as high as $8 billion, according to Morningstar, given the majority of assets in his infrastructure strategies are held by institutional clients.
