The fund manager Wilson Asset Management has named a fintech S&P/ASX 200 Index (ASX: XJO) share as one of its leading investment picks. Hub24 Ltd (ASX: HUB) shares are one of the largest 20 holdings within the WAM Capital Limited (ASX: WAM) portfolio.
WAM Capital is a listed investment company (LIC) which is aiming for "the most compelling undervalued growth opportunities in the Australian market".
The LIC has managed to deliver gross portfolio returns of 14.9% per annum since its inception in August 1999. That compares to an average return per annum of 8.1% for the S&P/ASX All Ordinaries Accumulation Index (ASX: XAOA).
What's the bull case for Hub24 shares?
WAM described Hub24 as a financial services company that is "focused on investment and superannuation portfolio administration services which also provides integrated platform, technology and data solutions".
The fund manager noted that in the first quarter of FY23, Hub24 achieved $3 billion of net inflows from its platform, beating market expectations.
WAM explained the result was "driven by growth in its existing client base", as well as the 13% increase in the number of advisers using its platform, compared to the prior comparative quarter.
It was also noted that Hub24 was recently named the best SMSF investment platform in the CoreData SMSF service provider awards, which ranks platforms for service quality and adviser preference.
In the quarter, Hub24 also said that its total funds under administration (FUA) was $68.4 billion at 30 September 2022. This comprised platform FUA of $52.4 billion (up 15.4%), and portfolio, administration and reporting services (PARS) FUA of $16 billion (down 9.9% year over year due to market movement).
Average monthly net inflows for FY23 to date was $995 million, up 1.7% from FY22.
The company noted that in the September quarter, there was an improvement in net inflows following a "slightly softer" FY22 fourth quarter.
Hub24 was ranked first in terms of annual FUA growth in percentage terms. The fintech ASX 200 share said that it still has a "solid pipeline of opportunities".
WAM's view
The investment team were impressed by that pleasing update considering the broader market volatility. WAM concluded:
We believe the company is well-positioned to continue building on this strong performance.
Some of the other ASX shares in WAM Capital's top 20 holdings were: AMP Limited (ASX: AMP), Idp Education Ltd (ASX: IEL), IPH Ltd (ASX: IPH), Pro Medicus Ltd (ASX: PME), Temple & Webster Group Ltd (ASX: TPW), Webjet Limited (ASX: WEB) and Johns Lyng Group Ltd (ASX: JLG).
Hub24 share price snapshot
Since the start of the year, the Hub24 share price is down around 9%. But, over the past month, it has risen by around 20%.
