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9Innovations in the trial custody account/children's custody account/savings plan custody account or whatever $AMUN (+0.18%) flies out. Not necessarily because of the figures. I actually thought they were quite good, but what they did with my beloved World ETF was enough for me.
Still considering $MSCI (-0.02%) or $BLK but haven't had time to take a closer look yet.
Nevertheless, there will be 4 new additions next month.
Amundi Q3 2024 $AMUN (+0.18%)
Financial performance:
Amundi recorded an impressive financial performance in the third quarter of 2024 with an adjusted net result of EUR 337 million, an increase of 16.1% year-on-year. For the first nine months of the year, adjusted net income amounted to EUR 1,005 million, an increase of 10.4% compared to the same period in 2023. In addition, the company achieved a record level of assets under management (AuM) of 2.2 trillion euros, an increase of 11.1% year-on-year.
Balance sheet overview:
The acquisition of Alpha Associates resulted in goodwill of EUR 290 million and an intangible asset of EUR 50 million representing client contracts, which will be amortized on a straight-line basis until the end of 2030.
Notes to the income statement:
The adjusted net result for the first nine months of 2024 amounted to EUR 2,573 million, an increase of 7.3% compared to the previous year. Management fees rose by 6.6% to 2,364 million euros, while performance fees fell slightly by 2.0% to 88 million euros. Operating costs remained well controlled and rose by 5.9% to 1,356 million euros, resulting in a positive "Jaws effect".
Key figures and profitability metrics:
The adjusted cost/income ratio improved to 52.7% in the first half of 2024, compared to 53.4% in the same period last year. Adjusted earnings per share for the third quarter of 2024 amounted to EUR 1.65, an increase of 16.0% compared to the previous year.
Segment information:
Retail: Net inflows of EUR 6.3 billion in the third quarter of 2024, particularly from third-party sales partners.
Institutional and public clients: Net outflows of EUR 9.3 billion were recorded here in the third quarter of 2024, albeit with positive inflows from MLT assets.
Asia: Strong performance with net inflows of EUR 7 billion in the third quarter of 2024.
Competitive position:
Amundi's strategic focus on ETFs, third-party distribution and Asian markets has strengthened the company's competitive position. Amundi is now the second largest provider in Europe in terms of net inflows into ETFs.
Forecasts and management statement:
Management expressed confidence in the realization of the 2025 plan, with further growth expected in strategic areas such as technology and Asia. The partnership with Victory Capital is expected to strengthen Amundi's presence in the US and contribute to revenue growth.
Risks and opportunities:
Risks include market volatility and client risk aversion, which could have a negative impact on inflows and sales. Opportunities lie in the expansion of the ETF range, the use of technology and growth in the Asian markets.
Summary of results:
Amundi delivered a robust financial performance in Q3 2024 with significant growth in net income and assets under management. The strategic initiatives, particularly in ETFs and Asia, are delivering positive results. The acquisition of Alpha Associates and the upcoming partnership with Victory Capital are expected to further strengthen Amundi's market position and growth potential. The improved cost/income ratio and the positive "Jaws effect" underline the operational efficiency and position Amundi well for future growth.
Positive aspects:
Record assets: Amundi reached record assets under management of €2.2 trillion as of September 30, 2024, an increase of 11.1% year-on-year. This growth reflects the strong market performance and effective investment management strategies.
Strong growth in net income: Adjusted net income for the third quarter of 2024 amounted to EUR 337 million, an increase of 16.1% compared to the third quarter of 2023, driven by higher revenues and operational efficiencies resulting in a positive "Jaws effect".
Successful ETF strategy: Amundi's ETF assets under management exceeded EUR 250 billion, with net inflows of EUR 8 billion in the third quarter of 2024, positioning Amundi as the second largest provider in Europe in terms of net inflows into ETFs, demonstrating the success of its strategic focus on this area.
Positive inflows in Asia: The Asian market showed a strong performance with net inflows of EUR 7 billion in the third quarter of 2024. This development was supported by contributions from joint ventures and direct sales activities in countries such as Japan, Singapore and Hong Kong.
Improved cost-income ratio: The adjusted cost-income ratio improved to 52.9% in the third quarter of 2024, indicating increased operational efficiency and in line with the company's 2025 target.
Negative aspects:
Net outflows in the institutional segment: In the institutional clients and sovereign wealth funds segment, Amundi recorded net outflows of EUR 9.3 billion in Q3 2024, indicating difficulties in retaining institutional clients, despite positive inflows in MLT assets.
Decline in multi-asset and real assets: Multi-asset assets under management remained stable, while real and alternative assets declined by 8.3% year-on-year, indicating challenges in these asset classes.
Negative development in China: Amundi BOC WM in China recorded net outflows of EUR 0.7 billion in the third quarter of 2024, as maturing fixed deposits could not be offset by new subscriptions. This illustrates the difficulties in the Chinese market.
Effects of the exit from the low-wage insurance mandate: The exit from a low-wage insurance mandate led to significant outflows of EUR 11.6 billion and impacted total inflows in the quarter.
Pressure on performance fees: Although performance fees increased compared to Q3 2023, they decreased compared to Q2 2024 due to lower crystallization levels, indicating the volatility of this revenue stream.
💶 Amundi: Europe's financial architect - Does he build the most solid assets? 🏗️ Part 1: https://getqu.in/Erlpxb/
Looking at the EV-to-EBITDA ratio, one would expect much more from BlackRock despite its size. Amundi is above DWS, but both companies are at a very low level overall and are actually very poorly valued.
Amundi performs best in terms of shareholder yield, followed by DWS.
The payout ratio is quite high for Amundi and DWS, but seems quite acceptable for the current models.
BlackRock also leads by a wide margin in terms of dividend per share (DPS).
In terms of return on invested capital (ROIC), none of the companies exceed 10%.
In terms of ROE, Amundi and BlackRock are above 10%, with BlackRock consistently above it.
DWS is best positioned in terms of return on invested capital (ROCE) and has been above 10% for some time.
Conclusion
The asset management industry is a growing and highly lucrative industry, and in Europe it is still at the beginning of its development. It is clear that $BLK (-0.35%) is the leading provider and the first choice for any investor who wants to cover this area with a single share. However, the ETFs from $AMUN (+0.18%) are hardly any worse and are also attractively valued. In addition, Amundi offers many undiscovered opportunities that have great potential.
What I like about Amundi are several factors, some of which are not purely rational. As a European provider, Amundi differs from $DWS (+0.63%) and Blackrock because, unlike DWS, it has a better reputation and a better shareholder structure. There is no$DBK (+0.47%) bank in the background, but the interesting holding company SAS Rue La Boetie, and with it there is not a scandal every two weeks. In addition, Amundi offers incredibly cheap ETFs that should tie up capital in the long term and works closely with the German provider Solactive. Anyone familiar with Prime ETFs knows that they are exceptionally cheap. Although they are not yet recognized by many, they have already had an excellent start. Amundi also offers ALTO, an in-house financial technology that, while not quite at the level of BlackRock, is cheaper and just as helpful in its field. Amundi is also a leader in the ESG market and is one of the pioneers in the field of sustainable investments.
The cheap valuation, proximity to us, a good dividend, low-cost ETFs and solid values alongside BlackRock make an overall investment in Amundi attractive to me. It's not for everyone, mainly due to the withholding tax, but for me it's a good source of dividends that I can also support with my own ETFs.
Overall, I can only recommend buying more European provider ETFs. It doesn't always have to be Amundi - have a look here:https://getqu.in/5nb3cO/
+ 3
💶 Amundi: Europe's financial architect - Does he build the most solid assets? 🏗️
Company profile
$AMUN (+0.18%) is one of Europe's leading asset managers and is headquartered in Paris. The company was formed in 2010 from the merger of the asset management segments of $ACA (-0.3%) and $GLE (+0.52%) and has been listed on the stock exchange since 2015. With assets under management of EUR 1.98 trillion (as at June 2024), Amundi is one of the world's largest players in asset management.
Historical development and business model
Since its foundation, Amundi has enjoyed continuous growth and offers a wide range of investment solutions for institutional and private investors. The portfolio ranges from actively and passively managed funds to ETFs and customized mandates. A particular focus is on the management of liquidity reserves and the development of specialized investment strategies for companies.
Core competencies and future prospects
Amundi's success is based on several core competencies:
- In-depth expertise across all asset classes and markets
- Leading position in European money market management
- Pioneering role in technological innovation, in particular through the ALTO investment platform
- Low-cost ETFs for investors
Looking to the future, the company is focusing on further growth, particularly in the areas of ETFs and sustainable investments.
Strategic initiatives
Amundi pursues various strategic initiatives to achieve its objectives:
- Increased expansion of the ETF business, with the aim of becoming the market leader in Europe
- Focus on sustainable investment strategies and the integration of ESG criteria
- Expansion into emerging markets, particularly in Asia
- Further development of digital platforms, such as the ALTO technology
Market position and competition
Amundi is the largest asset manager in Europe and among the top 10 worldwide. Its main competitors include global asset management giants such as BlackRock, Vanguard and Fidelity. In the European ETF market, Amundi ranks behind iShares ($BLK (-0.35%) ) and Xtrackers ($DWS (+0.63%) ).
Market potential
The global asset management market is growing steadily, particularly in the ETF and sustainable investment segments. Amundi is well positioned to benefit from these growth trends and further expand its market position.
Share performance
Since the IPO in 2015, the Amundi share has achieved a TR of 127%, 27% more than DWS in the same period.
Performance
In terms of turnover, Amundi is significantly smaller than BlackRock, but larger than the German company DWS. BlackRock also has numerous other sources of income, such as from financial technology.
Looking at the assets under management (AUM), the dependence on Europe and Asia becomes clear, which at the same time underlines Amundi's strong positioning there. In contrast, Amundi's presence in the USA is small and its exposure in other regions is also limited. Amundi is therefore primarily a bet on Europe and Asia - two markets that still have relatively little capital in the asset management sector, but are showing an upward trend. There is also growing pressure to move towards more sustainable financial solutions, which positions Amundi well in these regions.
Amundi leads in sales growth and is expected to continue to benefit from the European trend as long as BlackRock does not introduce cheaper and even more offerings.
Amundi is also ahead in terms of gross profit margin.
However, its net profit margin is well behind BlackRock's, partly due to BlackRock's product mix.
In terms of earnings per share (EPS), BlackRock leads by a wide margin and was able to increase this significantly with an annual growth rate of almost 8%.
Free cash flow (FCF) is currently positive at all three companies. Amundi, on the other hand, was briefly negative in some cases, while State Street is a special case anyway.
The share-based remuneration essentially only affects BlackRock.
However, BlackRock buys back more shares and is therefore net negative. Amundi has also made purchases from time to time.
All companies are very well positioned in terms of the ratio of net debt to EBITDA.
Part 2:https://getqu.in/aiK2Y3/
+ 6
Podcast episode 57 "Buy High. Sell Low."
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Why domestic ETF providers are worth considering
In the increasingly globalized financial world, choosing the right ETF provider can be a challenging decision. While international providers often boast prestigious brands and impressive product portfolios, there are compelling reasons to consider domestic ETF providers. These considerations range from supporting the local economy to alignment with personal values and potential cost benefits.
A comment from me as to why $AMUN (+0.18%) , $HSBA (+0.51%) or $DWS (+0.63%) should sometimes be the better choice.
Reading time: 3-5 minutes.
1. Supporting the local economy
The first and perhaps most obvious reason to choose a local ETF provider is to support the local economy. By investing in ETFs managed by local providers, investors are not only supporting the growth and stability of domestic financial markets, but also local employment and innovation. Any domestic provider that can compete with international giants helps to strengthen the financial center and secure jobs. In addition, the administrative costs that investors pay flow directly back into the domestic economy instead of flowing abroad.
2. value-oriented investment decisions
Another aspect that is often overlooked is the value orientation of the investment strategy. Domestic ETF providers generally have a better feel for the cultural and economic characteristics of their country. They are more closely networked with local markets and companies and can offer products that are better tailored to the needs and values of domestic investors. This is often reflected in a greater consideration of sustainability criteria, social responsibility and governance principles that are important to local investors.
3. cost savings with comparable quality
Another compelling reason to choose domestic ETF providers is the potential cost benefits. International providers often have high marketing and distribution budgets, which is why domestic providers can often offer their products at a lower cost. Management fees and other costs are often lower as they do not have the same high overhead costs as international providers. In addition, the differences in quality are often minimal for products that are comparable in structure and investment objective. Domestic ETFs therefore often offer excellent value for money.
Potential disadvantages and trade-offs
Of course, there are also reasons that could speak against a domestic ETF provider. One example is a higher tracking error, while other investors may prefer ETFs based in Ireland or Luxembourg to take advantage of tax benefits. Brands such as BlackRock or Vanguard attract many investors as they offer large fund volumes and a broad product range.
However, it should be noted that the differences in quality between domestic and international providers are small, especially for financial products such as ETFs, which are often standardized and transparent.
Addendum
Of course, you shouldn't put yourself in a worse position just to choose a domestic product.
Addendum 2
By "domestic" here we mean Europe. It is not only about the ETF domicile in Germany, but also about the conflict between Ireland and Luxembourg regarding the ETF domicile, which can certainly have an impact.
Cheers!
Forecast: ETFs are expected to reach USD 35 trillion in assets worldwide by 2035
Hi folks.
ETFs, which currently manage USD 13 trillion in assets, are expected to grow to USD 35 trillion by 2035, a three-fold increase. This forecast is based on a compound annual growth rate (CAGR) of 10%, which seems quite modest compared to the last decade's 17% and the previous decade's 25%. Nevertheless, the more moderate growth is considered likely as market returns may be less impressive in the future.
The advantages of ETFs, such as low costs, liquidity during the trading day, tax efficiency and flexibility, will continue to attract investors and traders. This will lead to an increase in new products, innovative designs and more sales strategies. Long-term structural changes overseas also favor ETFs, while various mutual fund share classes in the US will encourage further inflows of capital.
Direct indexing, which has been seen as a threat by some, appears to be less of an issue, while tokenization may have a future role to play, but not in the foreseeable future. In fact, tokenization could even benefit ETFs.
These developments suggest that ETFs will continue to play a dominant role in global financial markets and grow significantly. Companies such as $BLK Vanguard, $IVZ (-0.01%) or $AMUN (+0.18%) will benefit significantly from this trend. The question here will be which company can take the biggest slice of the pie. My secret tip here would be $BLK 😉.
Chart via: @thetrinianalyst (X)
Post idea: Eric Balchunas (LinkedIn)
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