POWERED BY MOMENTUM MEDIA
Further underperformance likely for IOOF
IOOF has been identified by UBS as a stock that is ‘still at risk’ of underperformance as its shares fall 56% since the start of the year.
UBS said the firm had been dented from a reduction in wealth management income while fund flows would be affected by market volatility.
Shares at the firm were trading at $7.88 at the start of the year and had now fallen to $3.46.
As well as the ongoing market volatility caused by the COVID-19, it was announced in February that the firm would be subject to a second shareholder class action suit from Shine Corporate.
The suit sought to recover losses suffered as a result of alleged non-disclosures and potentially misleading and deceptive conduct. IOOF responded by stating it intended to defend the suit in Federal Court.
The fall wiped out nearly all of its gains for 2019 when it rose 63% against returns of 23% by the ASX 200.
In its note, ‘COVID-19, positioning for a recession’, the firm said: “The recent equity market sell-off reduces wealth management income for AMP and IOOF holdings, with net fund flows likely to be reduced due to market volatility.
“Our analysts estimate a 10% fall in equities could see a 9.6% PBT impact for AMP and 16.5% PBT impact for IOOF.”
Markets have been volatile worldwide as a result of the COVID-19 fallout with the ASX 200 down 25% since the start of 2020.
Share price performance of IOOF over one year to 18 March versus ASX 200
AUTHOR
Laura Dew
Laura Dew is editor at Super Review. Prior to joining SR, she spent five years working at Investment Week in the UK covering asset and wealth management.
Recommended for you
According to Anthony Scaramucci, Donald Trump’s unfavourable view of NATO poses significant challenges for capital managers.
Roundtables attended by 12 super CEOs, jointly hosted by ASIC and APRA, have shed light on key areas of discussion within the industry.
Allocations to credit, hedge funds, and equities contributed to a strong performance in the 2024 financial year, according to the sovereign wealth fund.
The strong result, it said, reflects deliberate efforts over the last few years to pivot portfolios for a changing investment environment and resurgence of geopolitical risks.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Ardea Diversified Bond F (CLOSED)
148.81 3 y p.a(%)
2
Spire Oaktree Opportunities XI First Close USD
66.48 3 y p.a(%)
3
Fidante Credit Suisse Global Private Equity
31.88 3 y p.a(%)
4
DomaCom 4/27 Crombie Avenue Bundall QLD 4217 Australia
28.07 3 y p.a(%)
5
CFS Acadian Wholesale Global Equity Long Short A
26.35 3 y p.a(%)
