The Netwealth Group Ltd (ASX: NWL) share price is on course to end the week in the red.
This is despite the tech sector charging higher on Thursday.
At the time of writing, the investment platform provider’s shares are down 2.5% to $12.98.
Why is the Netwealth share price falling?
Investors have been selling down the Netwealth share price following the release of the company’s third quarter update.
For the three months ended 31 March, Netwealth reported a very modest 1.6% or $0.9 billion increase in funds under administration (FUA) to $57.6 billion.
While this is a much slower growth rate than investors have become accustomed to, it is worth highlighting that it is still a relatively positive result given the tough trading conditions it faced during the period.
For example, Netwealth reported negative market movements of $1.7 billion during the period. Take this out of the equation and its quarterly growth would have been ~4.6%, which annualises to 18.4%.
Elsewhere, the company reported quarterly funds under management (FUM) inflows of $0.5 billion, bringing its FUM to $13.8 billion, and a $3 billion year on year lift in its Managed Account balance to $11.7 billion.
Market share growth continues
Another positive, which has failed to boost the Netwealth share price, was news that the company continues to grow its market share.
The release notes that Netwealth continues to lead the industry for FUA net inflows, recording net inflows of $13 billion over the 12 months to 31 December. This led to Netwealth’s market share increase from 4.4% to 5.5% over the period.
This makes it the sixth largest provider based on market share. Though, it still trails fifth positioned Macquarie Group Ltd (ASX: MQG) by some distance. Macquarie currently has an 11.7% market share.
Outlook
Pleasingly, management appears positive on the company’s outlook, noting that its “pipeline and win rate for new business remains very strong across all market segments.”
In light of this, it remains confident the company will exceed its annual FUA inflows guidance of $13.5 billion. This is subject to the timing of client transitions and there being no deterioration in market conditions.
The post Netwealth share price falls after third quarter update disappoints appeared first on The Motley Fool Australia.
Should you invest $1,000 in Netwealth right now?
Before you consider Netwealth, 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 Netwealth wasn’t one of them.
The online investing service he’s run for over 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 January 13th 2022
More reading
- ASX 200 midday update: Bank of Queensland sinks, Allkem jumps
- 7 small-cap ASX shares that have been oversold: Wilsons
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. owns and has recommended Netwealth. The Motley Fool Australia owns and has recommended Netwealth. The Motley Fool Australia has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
from The Motley Fool Australia https://ift.tt/wEO7usU
Leave a Reply