Netwealth share price higher on record quarter

What is causing investors to hit the buy button today?

| More on:
A young man goes over his finances and investment portfolio at home.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Netwealth Group Ltd (ASX: NWL) share price is pushing higher on Thursday.

In morning trade, the investment platform provider's shares are up 2% to $22.37.

This leaves its shares just a fraction short of a new record high.

Why is the Netwealth share price rising?

Investors have been bidding the company's shares higher today in response to the release of its fourth quarter update.

According to the release, Netwealth's funds under administration (FUA) increased $3.3 billion or 3.9% during the three months ended 30 June. This $3.3 billion increase comprises FUA net inflows of $3.8 billion (up 38.7% on third quarter inflows) and negative market movement of $0.5 billion.

This took Netwealth's total FUA to a record of $88 billion, which represents a 25% or $17.7 billion increase year on year. This comprises FY 2024 FUA net inflows of $11.2 billion and positive market movement of $6.5 billion.

Also growing during the quarter was the funds under management (FUM). At the end of June, Netwealth's FUM was up $0.8 billion quarter on quarter to $20.5 billion. This represents FUM net inflows of $0.9 billion.

Netwealth's Managed Account balance was $17.6 billion at the end of June. This is up $4 billion or 29.4% year on year. Managed Account net inflows were $0.8 billion for the June quarter, increasing by $0.4 billion or 129.2% on the prior corresponding period.

What else did it report?

One thing that could be holding back the Netwealth share price today is its commentary on fees and margins. It said:

Positive market movements of FUA contribute to higher admin fee revenue, however, the impact is significantly diluted due to the structure of tiered administration fees and fee caps. In addition, many ancillaries are unimpacted by market movement. These factors when combined with the lower cash percentage, have resulted in a reduction in average revenue bps for the year, particularly in 2HFY2024.

No earnings updates or guidance was provided with this release. As a result, investors will have to wait for the company to announce its full year results next month to see what impact the above has had on its profitability for the year.

As a reminder, during the first half of FY 2024, Netwealth reported a 20% increase in total income to $123.3 million and a 28.3% lift in net profit after tax to $39.3 million.

The Netwealth share price is 62% over the last 12 months.

Motley Fool contributor James Mickleboro 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.

More on Technology Shares

Kid with a brown paper bag on his head which has a sad face on it sits in front of an old style computer representing falling ASX 200 tech shares today.
Technology Shares

Why are ASX tech shares being hit so hard today?

What’s causing the tech space to get hammered?

Read more »

A young man sits on the floor with his back against a sofa hunched over his phone in one hand and his other hand on top of his head as though he is seeing bad news as his face looks sad and anguished.
Technology Shares

Down 15% in less than 3 weeks, what's next for Brainchip shares?

The downtrend continues in FY25.

Read more »

A female soldier flies a drone using hand-held controls.
Technology Shares

DroneShield shares dive another 19%! Time to pounce?

With DroneShield shares getting hammered again today, do I think it’s time to buy?

Read more »

Happy man and woman looking at the share price on a tablet.
Technology Shares

2 ASX tech stocks to buy now: Broker

Bell Potter thinks that these stocks could offer market-beating returns.

Read more »

Two happy excited friends in euphoria mood after winning in a bet with a smartphone in hand.
Technology Shares

Guess which ASX defence stock is rocketing 10% today (Hint: not DroneShield!)

What is getting investors excited this morning? Let's find out.

Read more »

Happy man working on his laptop.
Technology Shares

Up 80% in a year, why is this ASX 200 stock hitting a record high today?

This high-flying stock has just released its quarterly update. How did it do?

Read more »

A person sitting at a desk smiling and looking at a computer.
Technology Shares

Buy this ASX 200 tech stock 'poised for significant growth'

Tech stocks continue to catch the bid in 2024.

Read more »

A woman looks over her shoulder towards the back seat while sitting at the wheel of a stationary car with a serious look on her face.
Technology Shares

Up 102% in a year, can this ASX small-cap technology company keep on rising?

Smart Parking shares have doubled over the past year.

Read more »