Investment platform records over double trading volume amid crisis

Xplore Wealth observed an 8.7 per cent decline in funds under administration (FUA) during the period from 31 December to the end of March, which it attributed to the market downturn. During the same period, the ASX All Ordinaries benchmark was down 22 per cent.

The market volatility resulted in lowered FUA administration fees for the quarter, but the decline was reported to be largely offset by higher transaction fees due to a lift in trading activity and a heightened cash margin from raised cash levels.

Going over its March data, Xplore noted cash held increased during the period, which it says will be ready to re-enter the market when volatility normalises, potentially a benefit to corporates looking to recapitalise through raisings.

Portfolio positioning was seen to vary between investment managers and their mandates.

While many are reweighting portfolios more defensively to cash, there was also evidence of some investment managers selectively increasing equity exposure in some portfolios after being underweight for a period, while waiting for more attractive valuations.

“We have some investment managers benefitting from stop losses within their portfolios so that exposure to growth assets was reduced early in the market downturn in favour of cash,” Xplore stated.

Xplore chief executive Mike Wright commented the challenging conditions had highlighted the value of the platform’s managed discretionary account service.

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Source: Investment platform records over double trading volume amid crisis – ifa