Perpetual funds slide as local market takes a dip
The fall puts the group's portfolio for the period at $25.3 billion - down from $26 billion in the March quarter.
Perpetual said the decrease was due in part to a lower domestic equity market, which it said ripped a $200 million chunk out of its portfolio. However, the group said this was partly offset by extra returns delivered by the majority of the group's Australian Equity funds.
Perpetual also blamed net fund outflows for $500 million of its losses for the period. It said $200 million had been taken out of its equities asset class, and $200 million from its cash and fixed income asset class.
Fund managers get a commission for the size of their portfolio, therefore a decrease in funds represents a smaller commission.
Despite the quarterly fall, the group's funds increased on a year-on-year basis by 11.9 per cent - or $2.7 billion - from $22.6 billion in the previous year.
Perpetual said its fund ratings for the quarter were strong, with its Diversified Funds and the Pure Equity Alpha Fund receiving upgrades and all other funds maintaining their ratings.
Perpetual shares closed 1.59 per cent down at $39.51 in Friday's trading.
Frequently Asked Questions about this Article…
Perpetual blamed a weak local sharemarket for part of the decline — saying it ripped about $200 million out of its portfolio — and also pointed to net fund outflows that reduced its funds during the period.
Perpetual's funds under management fell to $25.3 billion in the June quarter, down from $26.0 billion in the March quarter.
Perpetual said net fund outflows accounted for $500 million of its losses for the period. The company reported that $200 million was withdrawn from its equities asset class and $200 million from its cash and fixed income asset class.
Yes — Perpetual said the decline was partly offset by extra returns delivered by the majority of the group's Australian Equity funds, which helped reduce the overall impact.
Perpetual reported strong fund ratings for the quarter: its Diversified Funds and the Pure Equity Alpha Fund received upgrades, while all other funds maintained their existing ratings.
Despite the quarterly fall, Perpetual's funds increased year on year by 11.9% — an increase of $2.7 billion from $22.6 billion in the previous year to $25.3 billion.
According to the article, fund managers earn commissions based on the size of their portfolios, so a decrease in funds under management typically means lower commission income for the manager.
Perpetual shares closed 1.59% lower at $39.51 in Friday's trading following the reported quarter results.
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