AUM was up 3% over Q1 of FY24, from £19.2bn on 31 Mar 23 to £19.7bn on 30 Jun 23. Investment returns were strong over the quarter, contributing +£700m (+4%) to AUM growth. Net flows were negative at -£201m, but the trend continues to improve from the technology sector driven outflows of calendar year 2022 (we remind readers that over FY23 to 31 Mar 23, technology strategies accounted for £1.2bn of the £1.6bn total net outflows). The closure of the Melchior European Absolute Return fund also decreased AUM by £7m.
Polar reported continued demand and inflows into its Sustainable Emerging Market Stars, European ex-UK Income, Healthcare Blue Chip, Biotechnology, and Smart Energy Funds with combined net inflows of £313m. Importantly, with 38% of AUM in technology strategies, the rate of net outflows from open-ended technology funds continued to decline, with just £103m of net outflows in Q1.
The Q1 AUM level is ahead of the trajectory required to meet our FY24 AUM forecast, but being so early in the financial year, we believe it would be premature to revise forecasts at this stage. Our fundamental valuation remains at 625p per share, 32% above the share price, and we maintain our position that there is strong potential for both a company and sector re-rating.
