The Platinum Asset Management Ltd (ASX: PTM) share price fell 4.07% today to close at $4.71. This is on the back of a funds under management update released on Friday evening that has investors concerned.
What was in the update?
It was announced that the fund had net outflows of approximately $230 million in March 2019. As of March 31, Platinum Asset Management has $25,756.5 million under management.
Platinum Asset Management is a holding company for Platinum Investment Management Limited. The company is a fund manager based in Australia that specialises in investing in international equities markets.
There are currently 24 funds under management at Platinum Investment Management, and the company has Australian and US dollar-based funds.
How has the Platinum Asset Management share price performed in 2019?
Year to date, the Platinum Asset Management share price has fallen 3.32%. While this isn’t a big decline for a company over one quarter, the Platinum Asset Management share price has moved violently up and down over the last few months. These aren’t the kind of price swings you want to be seeing from a company that has been listed since 2007.
Where to next for Platinum Asset Management?
The quarterly report for the Platinum International Fund (the company’s largest fund) that will be distributed on April 10 will provide a more detailed overview of the fund and how it’s performing in the current environment.
I think the quarterly report will drive the next big move for the company’s share price, and it will all depend on whether the report has a bullish or bearish outlook on the global economy.
It’s becoming increasingly difficult for hedge funds to generate significant returns in the current market. This is because markets have been difficult to navigate in recent years due to low volatility in equities and the low-interest rate environment.
The question of whether algorithmic trading has influenced the performance of some hedge funds is also a valid consideration.
With the minimum investment for Platinum Investment Management funds at AU$10,000, I’d be steering clear of Platinum Asset Management shares until the quarterly report is released on April 10.
The AU$10,000 minimum investment also has me thinking if I were to invest this amount of money into the markets right now, I’d be focused on investments with a better track record for steady, long-term growth. I’d also set aside a small part of these funds for investing in high-growth companies and industries.
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Motley Fool contributor Nicola Smith has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Platinum Investment Management Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2019