Financial services group Netwealth Group Ltd [ASX:NWL] has plummeted 10.5% today, despite having posted an increase of 5% in its FUM (funds under management) count for the December quarter to $14.4 billion.
FUA (funds under administration) also went up 7.4%, totalling $62.4 billion, working off net inflows of $2.1 billion and positive market movements.
Netwealth said gross FUA inflows ($4.1 billion) for the December quarter were partially offset by larger than usual outflows in High-Net-Worth investors (HNW) and mid-market division:
Source: TradingView
Netwealth Group’s quarterly update
Financial services provider Netwealth Group has shared its December 2022 quarterly business update.
The group’s highlights for the recently ended December quarter were as follows:
- At the end of December 2022, FUA totalled $62.4 billion, which was an increase of $4.3 billion — 7.4% — which was made up of FUA Net Inflows of $2.1 billion and positive market movement of $2.2 billion.
- FUA gross inflows of $4.1 billion were partially offset by usual outflows in HNW investors and mid-market segment, and a higher proportion than average of outflow was non-admin fee paying.
- For the full year, FUA increased $5.8 billion — a 10% increase — despite a negative market movement of $4.6 billion.
- FUA of $14.4 billion was achieved for the year, an increase of $0.9 billion — 7.0% — on the prior quarter.
- The company achieved $0.4 billion in FUM Net Inflows for the December quarter.
- There was a Managed Account balance of $12.2 billion at the end of 2022, which was an increase of $0.7 billion — 6.5% — to the prior quarter.
Netwealth said that from the start of the year, the cash margin pertaining to transaction amounts should be around 1.35%, which is an increase on the previous margin of between 1.15% and 1.20%.
The payable rate to client is unchanged, keeping in with the RBA target rate less 65bpts.
Source: NWL
Netwealth’s shares and outlook
The company’s market share increased 6.3% by 30 September, which was a 1.1% increase on the same time in 2021.
Netwealth has updated its FUA net inflows guidance for FY23 to $11 billion, however, this forecast is reliant on timing of transactions and functions with optimism against declining macro and geopolitical environment.
The financial group said that its expenses will be increasing in 1H23 due to the previous year’s changes in initiatives, and post-COVID environmental changes.
Netwealth flagged some impact through uncertainty in the present economic environment, as well as some trepidation felt in overall financial market sentiment.
These factors have affected the company’s transitional timing, inflows, and outflows for the December quarter.
And yet, the company says it’s debt free, holds significant cash reserves, and has low capital expenditure, which lends it some encouragement going forward.
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Regards,
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