How is the AMP (ASX:AMP) share price performing against the financial sector in 2021?

Can the company’s shares make a comeback in the last month of the year?

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The AMP Ltd (ASX: AMP) share price has failed to outperform the market this year, continuing its gradual decline. Despite delivering a largely sound third-quarter trading update last month, the financial services company is struggling with positive investor sentiment.

At the closing bell on Thursday, AMP shares finished down 5% at $1.05. This means its shares have lost nearly 10% in the past week.

What’s happened to AMP recently?

Investors have been dragging down the AMP share price despite a robust third-quarter update from the company on 21 October.

AMP reported that its capital assets under management (AUM) fell to $180.3 billion, a drop of 4.04% compared to the first half. The impact was primarily caused by net cash outflows which came to $12 billion for the quarter. In context, net cash outflows totalled $2.4 billion in Q3 FY20.

In AMP’s New Zealand wealth management portfolio, AUM increased to $12.9 billion, up $300 million quarter-on-quarter. The sound result was driven by investment market gains which offset net cash outflows of $39 million.

The demerger program is scheduled for competition by the middle of FY22. This will see the transition of MAG from AMP Capital to AMP Australia, creating a superannuation and investment platform business.

AMP advised it will provide a further update on its progress regarding the demerger at an Investor Day on 30 November. In addition, the company will also lay out what’s ahead for the remaining financial year as well as FY22.

How does the AMP share price compare to the financial sector?

Over the last 12 months, the AMP share price has moved 40% lower and is down by 33% year to date. The company’s shares hit a multi-decade low of 88.5 cents in September 2021, before moving in circles.

In contrast, the S&P/ASX 200 Financials Index (ASX: XFJ) has gained 14% from this time last year and is up almost 19% year to date. The sector also registered a 52-week high of 6,956.4 points in late October.

Undoubtedly, AMP shares are lagging behind the Financial Index which has continued to accelerate since March 2020.

Based on today’s price, AMP commands a market capitalisation of roughly $3.59 billion, with approximately 3.27 billion shares on issue.

Should you invest $1,000 in AMP right now?

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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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