Wealth management services provider Netwealth Group Ltd's (ASX: NWL) share price surged in July. The stock peaked at $12.67 per share on 30 July, before ending the month at $12.01 on 31 July.
That works out to a 33.9% share price increase for July, making it the best performer on the S&P/ASX 200 Index (ASX: XJO). Year-to-date, Netwealth's share price has gained 62.3%. During that same time, the ASX 200 is down 10.2%
The company wasn't immune to the broader COVID-19 panic selling that rattled markets in late February into mid-March. But after bottoming at $5.30 per share on 16 March, it's been a sea of green for Netwealth investors.
In mid afternoon trading today, the share price was up another 1.4% to $13.03 per share. That's a highly laudable 145.9% gain since its mid-March low.
What does Netwealth Group do?
Founded in 1999, Netwealth counts itself among Australia's fastest growing wealth management companies. The company bills itself as a technology company, a superannuation fund, and an administration business.
As a specialist investment platform, it provides investment management solutions. The company's specialist investment platform also enables customers to invest in a wide range of products.
Why did Netwealth's share price soar?
On 9 July, Netwealth Group released its quarterly business update. The report highlighted that total funds under management grew to $31.5 billion in the 2020 financial year.
That growth — up 35% year-on-year — was driven by record net inflows of $9.1 billion for the financial year. Over the most recent quarter, funds under management grew 13%.
Additionally, Netwealth reported adding 3,261 new accounts for the quarter, bringing their total member accounts to 81,804.
And the outlook for Netwealth's shareholders remains strong. The company received a boost in the wake of the Royal Commission into banking and financial services, which has seen a growing number of retail investors turn away from the traditional banks.
The company likely also benefited from the increase in mum and dad investors deciding to take control of their own wealth during the initial wave of pandemic lockdowns, a trend I believe has some ways to run yet.
Netwealth's share price has already gained 8.2% in the first three trading days of August.
