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Why the Platinum Investment share price could be under pressure today

The Platinum Investment Management Ltd (ASX: PTM) share price could come under pressure this morning after recording net outflows in its latest funds under management (FUM) update.

What did Platinum announce on Friday?

Platinum’s November 2019 update showed an increase in total FUM to $24,940.02 million. That’s a 1.40% increase on October’s $24,595.93 million mark for the Aussie money manager. 

However, it wasn’t all good news for Platinum, as the group reported net ouflows of approximately $173 million during the month. According to the group, $131 million of those were from the Platinum Trust Funds.

It’s worth watching the Platinum Investment share price in early trade as investors weight the FUM increase against the net outflows.

How has the Platinum Investment share price performed this year?

It’s been a somewhat disappointing year for Platinum shareholders in 2019.

The Platinum Investment share price has slumped 12.86% on the ASX to $4.20 per share at Friday’s close.

That’s a significant underperformance against the 23.18% return posted by the S&P/ASX 200 Index (INDEXASX: XJO) this year.

However, it’s far from the only ASX 200 Financials stock to be struggling this year. 

IOOF Holdings Ltd (ASX: IFL) and Magellan Financial Group Ltd (ASX: MFG) are the two outperformers from the Wealth Management sector in 2019.

IOOF shares are up 55.27% while Magellan has rocketed 123.96% higher to $52.34 per share.

Challenger Ltd (ASX: CGF) and AMP Ltd (ASX: AMP) have joined Platinum in the losers column this year. Challenger shares have slumped 13.69% lower while AMP is down a hefty 24.18%, as it undergoes a complete overhaul.

Is Platinum the best value ASX money manager?

The group is still yielding a tidy 6.43% and the Platinum Investment share price trades at a price-to-earnings multiple of 15.5 times. 

Given its struggles in 2019, Platinum could be good value at its current $4.20 valuation, but it’s not an easy decision.

With Magellan’s track record and sustained share price performance, it could be a better long-term growth option.

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Motley Fool contributor Kenneth Hall has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended 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 Scott Phillips.

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