GQG outflows persist as firm backs AI stance
GQG Partners has marked its fifth consecutive month of outflows but overall funds under management (FUM) increased to US$166.1 billion.
In its latest monthly update to 30 November, the US-headquartered firm said FUM was up from US$163.7 billion ($246.4 billion) to US$166.1 billion.
However, outflows persisted for the fifth consecutive month at US$2.4 billion, following US$2.6 billion in the month prior.
International equity took the worst hit with monthly outflows of US$1 billion followed by US$0.6 billion in emerging markets, US$0.5 billion in US equity and US$0.4 billion from global equity.
Since the start of the year, it has seen US$1.8 billion in outflows across global equity, emerging markets equity and US equity. While it has seen more recent outflows, international equity has managed to report positive inflows of US$2.7 billion for the year to date.
Part of the reason for the outflows is caused by fund underperformance with the fund bucking market trends and betting against artificial intelligence.
Over one year to 31 October, the $3 billion Global Quality Equity fund has lost 5.4 per cent versus returns of 22.7 per cent by the MSCI ACWI ex Tobacco benchmark and its $1.7 billion Emerging Market Equity fund has returned 5.4 per cent versus returns of 28 per cent by the MSCI EM ex Tobacco index.
On the value side, the $96 million Global Quality Value fund has returned 7.4 per cent versus returns of 14.1 per cent by the MSCI ACWI Value ex Tobacco index.
Discussing its stance on AI, a whitepaper from the firm issued a stark warning on OpenAI’s long-term business viability, arguing the company’s economics are fundamentally unsound despite rapid revenue growth, mass user adoption and its central role in the global AI infrastructure boom.
In Dotcom on Steroids: Part II, it contended OpenAI’s business “appears commoditised” and is “hyper capital-intensive,” with rising compute costs and intensifying competition from both closed- and open-source developers.
“We believe it will struggle to build a sustainable business over time,” the paper stated.
AUTHOR
Laura Dew
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