Platinum Asset Management: Not FUM anymore

A bet on Platinum Asset Management is a bet on a rising sharemarket. Do you feel lucky?

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

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.

More on ⏸️ Investing

A white and black robot in the form of a human being stands in front of a green graphic holding a laptop and discussing robotics and automation ASX shares
Technology Shares

Joining the revolution: How I'd invest in ASX AI shares right now

Advances in artificial intelligence (AI) could usher in a new industrial revolution. Here’s how you can invest in it.

Read more »

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »