The ASX share GQG Partners Inc (ASX: GQG) could deliver big returns, according to the investment bank Macquarie.
Macquarie describes GQG as a boutique funds management business that specialises in share strategies across global, global excluding US, US, and emerging market stocks.
The investment strategy by GQG is based on a 'quality' investment approach, where the investment team seeks companies that exhibit earnings quality (consistency and predictability), experienced management teams, barriers to entry, and other competitive differentiators.
Following the latest monthly update from GQG, Macquarie remained very bullish on its shares' potential. Let's look at why.
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Ongoing strong progress
Macquarie pointed out that GQG's net inflows for the month of May were US$1.4 billion, taking the net inflows for the first five months of 2025 to US$7.4 billion. Macquarie is forecasting that June could see net inflows of US$1.1 billion. That compares to the monthly average of US$1.7 billion over the last 12 months.
This saw funds under management (FUM) growth of 3% month over month to US$168.5 billion at the end of May 2025.
The broker notes that positive market movements (with rising share prices) offset relative investment underperformance during May, adding a net US$3.5 billion to FUM.
Each one of GQG's strategies saw FUM growth during May. International (excluding US) shares saw FUM grow 4.4% month over month, global shares FUM grew 1.8% month over month to US$40.6 billion, emerging market shares FUM increased 2.6% month over month to US$40.2 billion, and US shares FUM rose 1.6% month over month to US$19.4 billion.
As a result of this latest update, Macquarie increased its GQG earnings estimates for earnings per share (EPS) for FY25, FY26, and FY27 by 1.7%, 2.5%, and 2.5%, respectively, to reflect changes in flows, performance, and market movements.
Is the GQG share price appealing?
Macquarie believes the GQG valuation is attractive because it's trading at a multiple of less than 9x the next 12 months of earnings, with a dividend yield of more than 10%.
The broker currently has a price target of $2.80 on GQG shares, which implies a possible rise of 28% in the next 12 months. Combined with the huge dividend yield, GQG shares could deliver a total return of around 40% in the next 12 months.
Macquarie's valuation for GQG is based on the business trading on a future price-earnings (P/E) ratio of 11. Overall, this seems like a positive time to look at GQG shares.
