MENU

Why the BT Investment Management Ltd share price has been smashed today

The BT Investment Management Ltd (ASX: BTT) share price has fallen lower in morning trade after the fund manager released its interim report.

At the time of writing its shares are down 3.5% to $12.54.

Key takeaways from the result include:

  • Total half-year revenue and other income fell 12.4% to $246.3 million.
  • Net profit after tax increased 0.9% to $78.9 million.
  • Average funds under management (FUM) up 10.1% to $86.3 billion.
  • Diluted earnings per share flat at 30 cents.
  • Interim dividend of 19 cents per share (30% franked).

What happened?

The major driver of BTIM’s poor top line result was its Performance Fees revenue. While Investment Management Fees revenue rose 7.6% to $211.6 million, Performance Fees revenue tumbled a massive 62.6% to $27.9 million.

Thankfully a sharp reduction in operating expenses managed to offset this decline in revenue. Operating expenses fell 20% from the prior corresponding period to $134.5 million, largely as a result of a drop in employee expenses due to lower performance fees.

Pleasingly though for the fund manager it is still experiencing strong fund in-flows. Average FUMs increased 10.1% to $86.3 billion during the half, and finished the half up 18% to $91.2 billion.

But with 15 of its 31 funds underperforming their respective benchmarks before fees in the last 12 months, I believe there is a danger that BTIM could be at risk of fund outflows if things don’t improve.

Should you invest?

Whilst I am a fan of the fund manager, I think 22x trailing earnings means its shares are a little on the expensive side.

Because of this I would suggest investors hold off an investment until they come down to a level more befitting its current growth profile. Investors might want to consider an investment in WAM Capital Limited (ASX: WAM) or Challenger Ltd (ASX: CGF) instead.

As well as WAM and Challenger, I think these three growth shares could be great options for investors today.

Top 3 ASX Blue Chips To Buy In 2017

For many, blue chip stocks means stability, profitability and regular dividends, often fully franked..

But knowing which blue chips to buy, and when, can be fraught with danger.

The Motley Fool's in-house analyst team has poured over thousands of hours worth of proprietary research to bring you the names of "The Motley Fool's Top 3 Blue Chip Stocks for 2017."

Each one pays a fully franked dividend. Each one has not only grown its profits, but has also grown its dividend. One increased it by a whopping 33%, while another trades on a grossed up (fully franked) dividend yield of almost 7%.

If you're expecting to see the likes of Commonwealth Bank, Telstra and Wesfarmers shares on this list, you'll be sorely disappointed. Not only are their dividends growing at a snail's pace, their profits are under pressure too due to the increasing competitive environment.

The contrast to these "new breed" blue chips couldn't be greater... especially the very real prospect of significant share price gains, something that's looking less likely from the usual blue chip suspects.

The names of these Top 3 ASX Blue Chips are included in this specially prepared free report. But you will have to hurry. Depending on demand - and how quickly the share prices of these companies moves - we may be forced to remove this report.

Click here to claim your free report.

Motley Fool contributor James Mickleboro has no position in any stocks mentioned. The Motley Fool Australia owns shares of Challenger Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

HOT OFF THE PRESSES: My #1 Dividend Pick for 2017!

With its shares up 155% in just the last five years, this ‘under the radar’ consumer favourite is both a hot growth stock AND our expert’s #1 dividend pick for 2017. Now we’re pulling back the curtain for you... And all you have to do to discover the name, code and a full analysis is enter your email below!

Simply enter your email now to receive your copy of our brand-new FREE report, “The Motley Fool’s Top Dividend Stock for 2017.”

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.