MENU

Platinum Asset Management: Not FUM anymore

Platinum Asset Management Limited (ASX: PTM) released a profit update on 9th January 2012 advising that profit before tax for the 6 months ended 31 December 2011 will be between $92m and $96m.

Compared to previous corresponding period to 31 December 2010 of $113.5m profit before tax, this is a fall of 15%. The market seemed to take this news in its stride, with the share price falling just 3 cents to $3.56.

The company stated that this is due to the decline in funds under management (FUM). Since January 2011, FUM has fallen by 20% from $18,857m to $15,143m, due to both negative investment performance and investors withdrawing their funds.

Platinum Asset Management is an Australian based fund manager, specialising in investing in International equities. The company’s managing director is renowned stock picker, Kerr Nielson, who also holds 57% of the company’s shares.

As you can see from the chart below comparing funds under management (FUM) and share price, you can see that they are correlated. Declines in FUM correspond to declines in revenue, net profit and the company’s share price.

Like other listed fund managers, Perpetual Limited (ASX:PPT) and BT Investment Management Limited (ASX:BTT) as well as the Australian Stock Exchange operator ASX Limited (ASX:ASX), share registry business Computershare Limited (ASX:CPU) and stock market software provider, IRESS Market Technology Limited (ASX:IRE), the performance of the equity markets virtually dictates their fortunes.

To invest in any of these stocks, you are basically forecasting that equity markets will rise.

Do you feel lucky? Are you looking for quality stock ideas? Readers can click here to request a new free report titled The Motley Fool’s Top Stock For 2012.

More reading

3 ASX shares for stormy markets

5 Safe haven ASX stocks for 2012

Motley Fool contributor Mike King owns shares in ASX Limited.   The Motley Fool ’s purpose is to educate, amuse and enrich investors. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.   Click here   to be enlightened by The Motley Fool’s disclosure policy.

Top 3 ASX Blue Chips To Buy For 2019

For many, blue chip stocks mean 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 2019.

Each one pays a fully franked dividend. The names of these Top 3 ASX Blue Chips are included in a 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.

See the 3 blue chip stocks

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

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.