Why the Netwealth (ASX:NWL) share price zoomed 10% higher today

The Netwealth Group Ltd (ASX:NWL) share price is zooming 10% higher on Thursday following the release of its second quarter update…

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The Netwealth Group Ltd (ASX: NWL) share price has been a strong performer on Thursday.

In morning trade, the investment platform provider’s shares are up 10% to $17.43.

Why is the Netwealth share price storming higher?

Investors have been buying Netwealth shares this morning following the release of another strong quarterly update.

According to the release, at the end of December Netwealth’s funds under administration (FUA) increased $4.8 billion or 14% quarter on quarter to $38.8 billion.

This was driven by favourable market movements of $2.2 billion and net FUA inflows of $2.6 billion. The latter was an increase of $0.6 billion or 33.7% on its first quarter net inflows.

This brought its calendar year net inflows to a total of $9.2 billion, which is an increase of $2.4 billion or 36.1% on 2019’s net inflows.

Also growing strongly were its funds under management (FUM). At 31 December, its FUM stood at $9.3 billion. This was an increase of $1.3 billion or 15.5% for the quarter. This comprises net inflows of $0.7 billion and market movements of $0.5 billion.

Finally, Netwealth’s Managed Account balance reached $7.6 billion at the end of the quarter. This was an increase of $3.2 billion or 74.1% increase on the prior corresponding period. Managed Account net flows of $3.2 billion were recorded for the 2020 calendar year, an increase of $1.2 billion or 63.9% over 2019.


Pleasingly, management appears confident that its growth can continue thanks to ongoing industry consolidation and change. It also notes that its pipeline of new business and transitions remains strong.

And while it has warned that the impacts of COVID-19 continue to adversely impact the stability of global markets, this hasn’t stopped it from increasing its FY 2021 guidance.

Management now expects its FY 2021 FUA net inflows to be in the range of $8.5 billion to $9 billion. This is an increase on its previous guidance of FUA net inflows of $8 billion.

Following today’s gain, the Netwealth share price is now up a massive 118% since this time last year.

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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Netwealth. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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