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27 July 2022
Business update - quarter ending 30 June 2022
HIGHLIGHTS
- Cash at bank of $8.08m at 30 June 2022 compared to $3.76m at 31 March 2022. AWI Ventures sold for $3.2m.
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Funds management fees continued to grow in the June quarter, up 5.9% to $743k over the prior quarter (Q3 FY2022)
o Investor accounts on our PMA platform increased 1.4% to 2,513 over the prior quarter.
o Funds Under Management (FUM) declined by 9% over the quarter to $470 million at 30 June 2022. The ASX All Ordinaries declined by 13% over the quarter and Intelligent Investor Active Exchange Traded Funds accrued cash distributions for FY22 of 7% of Active ETF FUM at 31 March 2022.
500 | InvestSMART FUM | |||
400 | 42% annual growth | |||
-9% decline over the quarter | ||||
FUM ($m) | 300 | |||
200 | ||||
100 | ||||
0 | ||||
Active Growth | Active Income | Active Ethical | Capped Fee/Passive |
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Subscription income from Intelligent Investor and Eureka Report declined 2.1% to $1.31 million in Q4 compared to the prior quarter.
o Subscribers declined 2.3% to 10,464 compared to the prior quarter.
Digital wealth platform continues to deliver growth
InvestSMART Group Limited (InvestSMART or the Company) (ASX: INV), a leading Australian digital wealth and advice platform providing low-fee investment solutions, is pleased to provide a business update for the June ended quarter, Q4 FY2022.
FINANCIAL RESULTS
FY2022 Q4 | FY2022 Q3 | ||
Financial Results - Operating Income Summary* | June quarter | March quarter | % |
$ | $ | ||
Income | |||
Funds management fees | 743,384 | 701,889 | 5.9% |
Subscriptions | 1,312,509 | 1,340,413 | -2.1% |
Commissions income - Insurance^ | 372,991 | 320,502 | 16.4% |
Other income | 3,508 | 9,234 | |
Total Operating Income | 2,432,392 | 2,372,038 | 2.5% |
Cash at Bank (end of period) | 8,080,120 | 3,758,818 |
* Quarterly results are prepared by management and are unaudited. Operating income excludes gain on disposal of AWI Ventures.
Total income increased by 2.5% to $2.43 million (Q4 FY2022 v Q3 FY2022). In our two primary businesses, income from funds management fees grew 5.9% to $743,384 in Q4 FY2022 vs $701,889 in the prior period. Subscription income declined 2.1% to $1.31 million in Q4 FY2022 v $1.34 million in Q3 FY2022. Commissions Income from insurance increased by 16.4%. The quarterly increase is seasonal and within management's expectations.
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DIVISIONAL COMMENTARY
Funds Under Management (FUM)
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FUM declined during the quarter to $470 million at the end of June, a 9% decrease on the prior quarter (Q3 FY2022). The overall decrease should be viewed against a backdrop of a market fall of 13% (as measured by the ASX All Ordinaries Index) and cash distributions payable for the Intelligent Investor Active ETF Funds (equal to 7% of the FUM within these funds at 31 March 2022).
The chart below shows growth in FUM across our product suite (see About InvestSMART at the end of this announcement for further details).
500 | InvestSMART FUM | |||
400 | 42% annual growth | |||
-9% decline over the quarter | ||||
FUM ($m) | 300 | |||
200 | ||||
100 | ||||
0 | ||||
Active Growth | Active Income | Active Ethical | Capped Fee/Passive |
Funds management fees | PMA accounts | 2,513 | |||||||
0.743 | 2,600 | 2,478 | |||||||
0.75 | |||||||||
0.702 | 2,400 | 2,332 | |||||||
0.680 | |||||||||
0.70 | |||||||||
2,200 | |||||||||
0.65 | 1,963 | +1.4% | |||||||
2,000 | |||||||||
0.60 | 0.566 | +5.9% | |||||||
millionsAU$ | accountsof | 1,800 | 1,572 | ||||||
0.45 | |||||||||
0.55 | 1,600 | ||||||||
0.50 | 0.477 | 1,400 | |||||||
Number | 1,200 | ||||||||
0.40 | 1,000 | ||||||||
0.35 | 800 | ||||||||
0.30 | 600 |
Jun-21Sep-21Dec-21Mar-22Jun-22 | Jun-21 | Sep-21 | Dec-21 | Mar-22 | Jun-22 |
Quarter ended | As at |
InvestSMART PMA Platform
The InvestSMART Professionally Managed Accounts (PMA) Platform, launched in November 2018, continues to receive monthly net fund inflows. A PMA account consists of ETF Portfolios on the platform under a capped fee model. The total number of PMA investment accounts increased by 1.4% to 2,513 in the quarter, up from 2,478 at 31 March 2022.
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Intelligent Investor ASX listed ETFs
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Total funds under management (FUM) across Intelligent Investor funds (under a variable fee model) decreased 11% to $232 million from $261 million at 31 March 2022. The ASX All Ordinaries declined by 13% over the quarter and Intelligent Investor Active Exchange Traded Funds will pay cash distributions of 7% of Active ETF FUM at 31 March 2022.
Active ETF Funds received positive net inflows during the quarter driven by completion of a secondary offering in the Intelligent Investor Australian Equity Growth Fund (ASX: IIGF) raising $11m.
Subscriptions
Subscription income from fee paying subscribers to our Intelligent Investor and Eureka Report content-driven products declined 2.1% on the prior quarter to $1.31 million.
Total subscribers declined 1.4% to 10,464 compared to the prior quarter of 10,710. Subscription income has increased by 8% in FY2022 over the prior year. The increase is due to an increase in prices for our subscription products from 1 July 2021 (see Beat the price rise article).
Subscription Income | Subscribers |
1.4 | 1.340 | 11,000 | 10,811 | 10,850 | 10,860 | 10,710 | ||||
1.317 | ||||||||||
1.309 | 1.311 | 10,500 | 10,464 | |||||||
1.3 | 1.250 | |||||||||
millionsAU$ | accountsof | |||||||||
-2.1% | 10,000 | -2.3% | ||||||||
1.2 | ||||||||||
9,500 | ||||||||||
1.1 | Number | 9,000 | ||||||||
1.0 | 8,500 |
Jun-21 | Sep-21 | Dec-21 | Mar-22Jun-22 | Jun-21 | Sep-21 | Dec-21Mar-22Jun-22 |
Quarter ended | As at |
Commissions Income - Insurance
Commissions Income - Insurance increased by 16.4% compared to Q4 FY2022. The increase is seasonal and within management's expectations. Compared to the prior comparative period (June 2021 quarter) commissions decreased by 6.5%. Attrition within the Insurance Commissions book is expected to continue.
PRODUCTS AND SERVICES
InvestSMART launched Fundlater in September 2021 (click this link for the announcement). Fundlater and Bootcamp are designed to appeal to a younger demographic. Fundlater helps first time investors invest in a $10,000 diversified portfolio of exchanged traded funds. The investor deposits $4,000 and is provided with a $6,000 loan.
The EurekaAsset-BackedLoan Fund (EABL) was launched in April 2022. EABL provides investors with access to income by investing in loans provided to Fundlater clients. The objective of EABL is to provide income for investors backed by quality assets. It is envisaged that over time EABL will grow to invest in assets that are outside, but similar to, Fundlater loans.
A secondary offer was completed for the Intelligent Investor Australian Equity Growth Fund (ASX: IIGF) one of three ETFs operated under InvestSMART's Intelligent Investor brand. The offer raised $11 million.
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FUND PERFORMANCE
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InvestSMART PMA Platform
The latest quarterly report and performance of each of InvestSMART's nine investment portfolios can be viewed here. Click 'learn more' to view each portfolio.
Intelligent Investor ASX listed ETFs
- Intelligent Investor Australian Equity Income Fund - ASX: INIF
- Latest quarterly reporthere
- Intelligent Investor Ethical Share Fund - ASX: INES
- Latest quarterly reporthere
- Intelligent Investor Australian Equity Growth Fund - ASX: IIGF
- Latest quarterly reporthere
CORPORATE
Sale of AWI Ventures
InvestSMART disposed of its entire holding in AWI Ventures in May 2022 for a cash consideration of $3.2 million. The disposal concludes InvestSMART's process of disposing of ventures entities where liquidity events arise. View ASX announcements on 11 May 2022 and 13 May 2022 to learn more.
Interview with InvestSMART CEO
Alan Kohler, Editor of the Eureka Report, interviewed InvestSMART CEO, Ron Hodge, on 4 May 2022. The interview can be accessed at www.eurekareport.com.au/investment-news/investsmart-plans-eureka-fund-to-back-fundlater-growth/151240.
Full year results
The audited Financial Report for the year ended 30 June 2022 is expected to be released on 25 August 2022.
OUTLOOK
InvestSMART Managing Director, Ron Hodge, said "Over the last few years we have changed our business model considerably and it was pleasing to see funds management fees continuing to grow in the last quarter. On the flip side it was disappointing but not surprising with current market conditions to see our FUM growth over the past quarter has slowed."
This document has been authorised for release by order of the Board.
For further information or comment, please contact Paul Clitheroe, Chairman, or Ron Hodge, Managing Director and CEO, at InvestSMART Group on 02 8305 6000.
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InvestSMART Group Limited published this content on 27 July 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 27 July 2022 06:31:12 UTC.