Hi AllThe sky is definitely falling in at the moment on the...

Hi All

The sky is definitely falling in at the moment on the market. At times like these I remind myself of why I purchased GQG in the first place and curse why I don't pick short term market movements. I honestly consider GQG Partners as a cut above the rest, due to:
1 - CIO expertise (and building up skillset with a team based approach in each fund). As @pastperformer said, as long as Rajiv Jain stays alive we should be fine. I don't believe he will retire in another twenty years - so here is to Rajiv Jain's health!
2 - The organisational approach to investing - culture of questioning every investment and having employed staff to actively see pro's and con's of all investments
3 - Being super competitive due to ability to thrive against the best in the world in the US market, GQG grew FUM faster than ARK did during ARK's high growth stage and has continued beyond them
4 - Still in early growth stage and has another 2 years left (Early stage US companies typically have a high growth period over 7 years and beyond with additional product sets - The Nature of Value, Nick Gogerty). Last year GQG launched new products US and International Dividend Yield Funds with seed investment from an Australian Industry Super Fund of $100M+. Everything points to an extended growth period (albeit at less than the circa 80% growth reported in the last half year report).

5 - GQG's key point of difference was to set up to be an Active Manager with an ETF fee structure. Performing better than ARK is one metric here, the other is the approach of switching between Value and Growth allowing to limit losses like Active Fund Managers should. Another metric is that ETF's have suffered FUM losses across Australia in line with global markets, greater than GQG has (sorry can't provide reference - not sure if there is publicly available information yet).
6 - High Net Profit Margins compared to other ASX listed Fund Managers, despite being lowest cost provider GQG makes a lot of money just from low margin Management Fees.

Here is the table that I track personally, while not perfect, shows up some inconsistencies in valuation of Fund Managers:

Notes on this table:
- Hi @discursive, beware of PDL's accounts. They don't strip out non-financial asset movements of acquired businesses in NPAT. It has inflated NPAT this year - I have removed $45.508M from the above P&L - Revenues minus Expenses + Taxes line to ensure it matches other Fund Managers.
Another thing to note, salaries at PDL are three times Magellan. GQG's are approximately $US82M or $AUD112M @0.73 AUD/USD exchange rate, which is a bit over half of PDL's salary costs.
PDL also has $57.508M in performance fees that will be difficult to repeat again.
- Yellow highlighted values are fund managers who report quarterly. Movement is FX movements only.
- The movement in FUM reported by GQG is still the highest of all Fund Mangers listed on the ASX.

Keep in mind, the quarter is not over yet. If markets trend the way they are currently trending, it will be the first negative quarter ever that GQG has had. I am hoping they will continue the growth trajectory, but one quarter of decline compared to peers is not the end of the road for GQG, if anything good performance against peers as measured by Morningstar should lead to higher FUM inflows. This is not just in Australia, it is globally.

The Morningstar links show that all strategies except for Emerging Markets (which has been performing close to par recently) are far above global peers. Here are the links with the one month and three monthly performance differentials:
Global Equity https://www.morningstar.com/funds/xnas/gqrrx/performance (one month +7%/three month +17.5%)
International Equity https://www.morningstar.com/funds/xnas/gsimx/performance (one month +1.5%/three month +12%)
Emerging Markets https://www.morningstar.com/funds/xnas/gqgix/performance (one month -1.5%/three month -0.5%)
US Select Equity https://www.morningstar.com/funds/xnas/gqeix/performance (one month +10%/three month +18%)

There are some detractors though and this has contributed to negative sentiment (The Ukrainian War has a significant impact on all stocks), the unique GQG detractors are:
1 - Investors still think GQG has large holdings in Russian listed assets. ASX listed Fund Managers are slow to rotate investments when trouble is nigh, so are a lot of the ETF's and US based fund managers. GQG is very nimble and this view should be removed once March quarterly is released - despite GQG releasing announcement that they had significantly lowered Russian holdings.
2 - Large investor in Energy stocks (this is a positive financially for us investors in GQG)
3 - Recent portfolio additions are going the wrong way, Philip Morris, British American Tobacco and BNP Paribas are down (although have been offset by Exxon Mobil, Walmart, Devon Energy). Comparative to other ASX listed Fund Managers we see the results above, PTM down 4% and who knows what Magellan is doing. GQG in AUD down 0.4% as at the end of Feb (although it was nice to be above forecasts for a month or so).
4 - Industry Segment sentiment, investors not paying attention to business fundamentals in the current investment market.

I know above is stating the obvious, however I have always compared peers to determine the best place to invest money and review the pros and cons of buying further into investments. I still believe the detractors are outweighed by reasons to buy, although I don't see an end to the Russian aggression anytime soon. This could lead to a further decline before an improvement in markets occur. Russia will not be part of the global financial system anytime soon and will likely end up isolated after they stop fighting.

Best of Luck
Lost