Record's (LON:RECL) Q317 trading update continued a series of positive updates through the financial year. It showed an increase in assets under management equivalent (AUME), positive currency for return performance and reported continuing interest in the company’s products in a climate of political and economic uncertainty. We have slightly raised our estimates to account for the higher AUME and recent dollar strength. Against this background, the rating of 13.7x FY17e earnings, supported by a yield of 4.6%, appears undemanding.
Q317 update
The update marked a continuation of positive performance by most of the currency for return strategies, supported by divergent interest rate policies among major central banks. AUME grew by 2.9% from $55bn to $56.6bn, with net client inflows of $2.2bn in the quarter, set against negative net market and exchange rate movements of $0.6bn. In sterling terms, this overall growth was magnified to 8% by the dollar's recent strength. Even allowing for the announced AUME outflows of $1bn from the end of January, Record will have seen net inflows since September 2016. Fee rates are largely unchanged for all products.
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