GQG inflows plummet YTD amid sustained underperformance

In its monthly data, the firm said overall funds under management were largely flat, sitting at US$167.2 billion ($255 billion), which was slightly down from US$167.6 billion in the previous month. 

Outflows stood at US$1.7 billion with all four divisions reporting sector outflows, marking the third consecutive month of outflows.

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Since the start of the year, flows into GQG funds stand at US$3.2 billion compared to US$17.4 billion for the same period a year ago, which represents a drop of 81 per cent.

While international equity, global equity, and US equity are positive since the start of the year, emerging market equities have seen outflows of US$1.8 billion since January. 

Looking specifically at September data, the largest outflows were seen in emerging market equities and US equities, which both lost US$0.6 billion, followed by international equity, which lost US$0.3 billion and global equity, which lost US$0.2 billion.

Since the start of the year, its $1.6 billion Emerging Markets Equity Fund has lost 2 per cent versus returns of 12.6 per cent by the MSCI EM ex Tobacco benchmark, while its $3.3 billion Global Equity Fund has lost 7.8 per cent versus 8 per cent returns by its benchmark of MSCI ACWI ex Tobacco Index. 

In an ASX statement, the firm said: “Our defensive positioning in our investment strategies led to relative underperformance in September and the third quarter. We continue to review and re-evaluate our positioning and we see the data consistently indicating both extended valuations in important parts of the market and an uncertain macro environment.

“As stewards of capital, we continue to believe that our portfolios are well-positioned to help protect client assets in the event of significant volatility.”

The potential for sustained outflows had been flagged earlier in the year when it noted in its half-year results that it had witnessed “redemption pressure” from larger investors into its Australian and UCITS funds. This was attributed to the defensive positioning of the portfolios, which had led to underperformance.