Why the AMP (ASX:AMP) share price has significantly underperformed the ASX 200 in the last year

It’s been another tough year for AMP shareholders…

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The AMP Ltd (ASX: AMP) share price has continued to head south over the past 12 months. This comes as the financial services company came under pressure over a series of negative updates.

At the time of writing, AMP shares are fetching for $1.105, up 1.84%. It’s worth noting that the company’s share price is nearing its all-time low of $1.04 reached on 30 July.

What’s happened to AMP recently?

2021 has been a time to forget for AMP shareholders, watching their wealth dwindle to record lows. The company’s share price has been hit heavily, despite the company reporting a rebound in its full-year results this month.

AMP achieved a Net Profit After Tax (NPAT) of $181 million, up 57% on the prior corresponding period. This was largely driven by an increase in Australian wealth management assets under management (AUM) of $121 billion, up 8%.

However, in a positive light, Australian wealth management net cash outflows hit $2.7 billion. A massive improvement compared to the $4 billion in net cash outflows registered in H1 FY20.

Nonetheless, the AMP share price has been trading at near basement prices since ASIC commenced proceedings against the company in May.

According to ASIC, AMP wilfully deducted life insurance premium and advise service fees from superannuation accounts of deceased customers.

The company stated that action has since been taken to correct the error. It has been conducting a thorough review of its policies and processes. The matter was later covered in the financial services royal commission.

How does the AMP share price compare to the ASX 200?

Over the last 12 months, the AMP share price has fallen more than 25%, with year-to-date also down around 30%. The company’s shares have lost about 80% of its wealth since early 2018, reflecting negative investor sentiment.

In contrast, the S&P/ASX 200 Index (ASX: XJO) has gained 22% from this time last year and is up 14% year-to-date. The ASX 200 also reached a record high of 7,632 points in mid-August.

Undoubtedly, AMP shares and the ASX 200 have moved in completely opposite directions.

Based on today’s price, AMP presides a market capitalisation of roughly $3.5 billion, with approximately 3.2 billion shares on issue.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. 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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