Yes a bit of a buyers strike on GQG at the moment - unfortunately the Novo news came so late in December the market will be wondering whether the Jan FUM update (released early Feb) is more the one to wait for now. This might have the stock languishing in the low $2's for another month unless the Dec FUM update due next week surprises on the positive side.
After swearing off fund manager stocks for life the Adani news and subsequent drop in the GQG sp has drawn me back in. I took a few bites after the Adani news broke - at $2.30 and then $2.11. I’m figuring the market has overreacted to the Adani news and again to Novo and will in time get back to $2.60 or $2.70. Beyond that I’m still not that sold on GQG or any of the listed fund managers.
The competition for GQG’s various funds is fierce….and there are plenty of ETF options on the market that spread risk far and wide and still give you exposure to the likes of Nvidia and Apple. The various Vanguard funds and MOAT for example. These have performed extremely well over the past couple of years. GQG as a ‘ticket clipper’ stock is priced on it‘s FUM performance and FUM growth…..it’s all about FUM really. GQG funds need to outperform their competitors to maintain/grow FUM…..and they have been……but this is the double edged sword. To outperform the likes of Vanguard and their big funds Rajiv has had to go left field with investments like Adani or go overweight such as with Novo. When these left field investments are winners the inflows continue. When they blow up in Rajiv’s face - that’s when the trouble starts. That's why the market has marked down this stock so severely - the fear of outflows - and the fact that when outflows start it can become like a bank run. The market is very unforgiving when it comes to fund managers getting things ‘wrong'.
That all said I’m still relatively optimistic GQG will get through this difficult period and the sp will recover to mid to high $2’s this year. Might need to stay patient for a while on this one.
GQG Price at posting:
$2.05 Sentiment: Hold Disclosure: Held
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