As was widely expected by analysts, Financial services company Perpetual saw a sharp slump in the amount of funds it had under management in the March quarter.
The 30% slump in the shares this year (half what it was a month ago – the shares have jumped 29% in that time) was confirmed by the news that funds under management fell 19%, while funds under advice dropped 13%.
Most of the fall came from lower share values as the company saw an $800 million outflow from nervy investors in the quarter.
CEO Rob Adams said in Monday’s statement:
“The COVID-19 pandemic has had a dramatic impact on global investment markets, leading to some of the sharpest declines in decades and the highest volatility in history during March,” Mr. Adams said.
Cash and fixed income strategies now represent 39% of Perpetual’s $21.4 billion in funds under management and Mr. Adams pointed to the advantages of “value investing” – the strategy of buying stocks that appear underpriced.
“It has been an extremely challenging quarter with extraordinary market volatility as markets react to the rapidly evolving COVID-19 situation.
“During these times, fundamentals matter and we remain focused on our investors. Value investing is a powerful long-term wealth creator, and we have remained true to label throughout economic cycles,” Mr. Adams said.
The shares were up a cent to $28.19, so investors were not too fussed at the news in the statement. They understood the message the slump in the share prices was sending about the size of the fall in funds under management.
