GQG Partners Inc. (ASX: GQG) share price
Hi and thanks for your service. GQG shares seem to be dipping strongly, just wondering is there is a solid reason for this? Is it a buy? Regards, David
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Answer
GQG has certainly been a struggle in 2026, with the stock down around 19% year-to-date, although it has paid 7.19c in dividends, or roughly 5%, and is still forecast to yield well above 10% over the next 12 months.
The issue is fairly straightforward: performance has been weak, and the market is worried this will translate into further funds under management outflows. Recent monthly flow numbers show the trend is still negative, albeit improving:
- April: -US$1.4bn
- March: -US$1.2bn
- February: -US$3.2bn
- January: -US$4.2bn
So, outflows are moderating, which is encouraging, but they are still happening, and that remains the key concern.
Performance improved materially in the March quarter as the technology trade wobbled and GQG’s more defensive, value-oriented positioning worked well. However, over the past couple of months, market gains have again been led by technology and AI-related stocks, where GQG has relatively little exposure. In April, for example, they underperformed by around 9%, and over one year they have underperformed by roughly 20%.
Longer term, the picture is better. GQG remains ahead of benchmark over 10 years and since inception in 2014, while performance is fairly close over five years. The problem is the three-year number, where they are around 4% per annum behind benchmark. Three-year performance is very important in funds management, because it heavily influences consultant ratings, platform allocations and investor flows.
The May FUM numbers are due next week, and our expectation is that outflows will remain meaningful. The stock is already pricing in a lot of bad news, trading near three-year lows, but the market will want to see evidence that outflows are stabilising before getting more constructive.
To GQG’s credit, they have done a good job retaining client support through a very difficult performance period. Given the extent of the relative underperformance across some strategies, the FUM outcome could have been materially worse. Total FUM still sits at a very healthy $US166.9bn.
In portfolio terms, GQG is effectively an anti-tech call. It provides exposure to a manager that should do relatively well if the AI and mega-cap technology trade cools. We are more comfortable with that positioning in the Growth Portfolio because we own technology elsewhere. In the Income Portfolio, the situation is a little different: we bought GQG primarily for yield rather than as a hedge against technology, and that makes the current underperformance more uncomfortable.
Importantly, GQG is not priced for growth. The stock trades on around 7x earnings and offers a forecast yield above 10%. That sort of yield is unlikely to be sustainable indefinitely one way or the other. Either earnings and dividends fall, which is what the market is increasingly pricing in, or they prove more resilient than expected, in which case the stock should eventually re-rate higher.
In terms of whether GQG is a buy today, we would wait for the next FUM update before making that call. The valuation is clearly attractive, but for now, the key issue is not valuation — it is whether performance and flows can stabilise.
