ASX 200 tech stock slides despite record $21.2 billion results

The ASX 200 tech stock is coming under selling pressure today.

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S&P/ASX 200 Index (ASX: XJO) tech stock Netwealth Group Ltd (ASX: NWL) is sliding today.

Shares in the investment platform provider closed yesterday trading for $20.28. In morning trade on Thursday, shares are swapping hands for $19.68 apiece, down 3.0%.

For some context, the ASX 200 is down 0.8% at this same time.

Here's what investors are mulling over today.

ASX 200 tech stock falls despite record 12-month fund inflows

The Netwealth share price is in the red following the release of the company's quarterly update for the three months to 31 March.

Among the highlights, the ASX 200 tech stock reported $84.7 billion of Funds Under Administration (FUA) as at 31 March.

Over the three months, FUA increased by $6.7 billion. That was achieved via net fund inflows of $2.7 billion along with positive market movement of $4.0 billion.

Impressively, management noted that quarterly FUA gross inflows of $5.2 billion were up 40.7% year on year. And FUA net inflows of $2.7 billion were up 62.2%.

Over the 12 months to 31 March FUA were up by 28.5% or $18.8 billion. That comprised FUA net inflows of $10.6 billion and positive market movement of $8.2 billion.

The strong results were driven by a new record 12-month FUA inflow of $21.2 billion.

As for Funds Under Management (FUM), those were up by $1.6 billion for the quarter to $19.7 billion. Netwealth reported FUM net inflows of $600 million for the three months.

Meanwhile, the ASX 200 tech stock's managed account balance increased by $1.4 billion to $17.0 billion, including net inflows of $600 million, a 62.1% year on year increase.

The number of accounts were up as well, increasing by 11.6% compared to the prior corresponding quarter. The company cited "strong momentum in the March quarter", adding 5,132 new accounts, 3.7% higher than the December quarter.

The Netwealth share price could be under some selling pressure with the company noting that the structure of its tiered administration fees, fee caps and most ancillaries, when combined with the lower cash percentage, "has resulted in a reduction in average revenue bps in the March quarter".

Looking ahead

Looking at what could impact the Netwealth share price in the months ahead, the ASX 200 tech stock said:

In addition to strong account growth in the quarter, we expanded and strengthened our new adviser and licensee relationships. Our new business pipeline including conversion rates, is very strong across all segments.

Management forecasts June quarter FUA inflows "to be very strong with several new large transitions commencing, in addition to higher seasonal flows and increased market activity".

On the AI front, the ASX 200 tech stock noted the rapid changes encompassing the tech world. As such, management said, "Innovations in generative artificial intelligence are being actively explored and implemented to improve efficiency, productivity, client engagement and service."

The Netwealth share price is up 60% over 12 months.

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Netwealth Group. The Motley Fool Australia has positions in and has recommended Netwealth Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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