Why the Platinum (ASX:PTM) share price is sinking 7.5% on Tuesday

This fund manager’s shares are under pressure…
The post Why the Platinum (ASX:PTM) share price is sinking 7.5% on Tuesday appeared first on The Motley Fool Australia. –

The Platinum Asset Management Ltd (ASX: PTM) share price is sinking on Tuesday.

In morning trade, the fund manager’s shares are down a sizeable 7.5% to $4.25.

Why is the Platinum Asset Management share price sinking?

Investors have been selling down the Platinum share price today in response to its latest funds under management (FUM) update.

According to the release, Platinum’s FUM fell 4.8% month on month to $23,523 million at the end of June.

This was driven by net outflows of approximately $167 million and the impact of its cash distribution to unit holders of $1,380 million, which was offset slightly by a distribution re-investment of $383 million.

Performance fees update

Also weighing on the Platinum share price was the release of an update on its estimated performance fees for the 12 months ended 30 June.

The release explains that Platinum is entitled to estimated performance fees of approximately $4 million for the year ended 30 June 2021. This comprises performance fees of $3.7 million for the first half and performance fees of just $0.3 million for the second half of FY 2021.

This represents a 56% reduction on the performance fees of $9.1 million the company recorded in FY 2020.

Broker response

A broker note out of Credit Suisse this morning also appears to have put pressure on the Platinum share price.

According to the note, the broker has retained its underperform rating and cut the price target on its shares to $4.50.

Credit Suisse notes that Platinum has now experienced 30 months of outflows. It also appears to believe this negative trend could continue due to the fund manager’s exposure to legacy investment platforms. It fears disruption and switching in the platform industry could have a large impact on its FUM.

The post Why the Platinum (ASX:PTM) share price is sinking 7.5% on Tuesday appeared first on The Motley Fool Australia.

Should you invest $1,000 in Platinum right now?

Before you consider Platinum, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Platinum wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of May 24th 2021

More reading

Why the Plenti (ASX:PLT) share price is rocketing higher today
Why the Nearmap (ASX:NEA) share price has risen 10% this morning
3 great reasons to buy Netflix

Why the Alumina (ASX:AWC) share price is down 9% in a month
Youfoodz (ASX:YFZ) share price rockets 80% after HelloFresh takeover offer

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!