GQG’s Defensive Stance Leads to Underperformance Amid Market Uncertainty
GQG Partners reported a slight decline in funds under management to USD 163.9 billion at the end of 2025, despite significant net outflows, buoyed by strong investment performance throughout the year.
- December net outflows of USD 2.1 billion
- Full-year net outflows total USD 3.9 billion
- Investment gains of USD 14.8 billion offset outflows
- Year-end funds under management at USD 163.9 billion
- Defensive positioning led to relative underperformance versus benchmarks
GQG Partners’ Year-End Funds Under Management Update
GQG Partners closed 2025 with funds under management (FUM) of USD 163.9 billion, a modest decrease from USD 166.1 billion at the start of December but an increase from USD 153.0 billion at the start of the year. The asset manager faced net outflows of USD 2.1 billion in December alone, contributing to total net outflows of USD 3.9 billion for the full year. However, these outflows were more than offset by robust investment performance, which added USD 14.8 billion to the firm’s assets during 2025.
Navigating Market Uncertainty with Defensive Positioning
The firm maintained a cautious and defensive investment stance throughout the year, citing concerns over extended market valuations, weakening fundamentals, and macroeconomic uncertainty. This approach, while protective in nature, resulted in relative underperformance across all of GQG’s strategies when compared to their respective benchmarks. The company’s focus on capital preservation reflects a strategic choice to prioritise client asset protection amid volatile market conditions.
Revenue Model and Management Alignment
GQG’s revenue continues to be predominantly derived from management fees, which are calculated as a percentage of assets under management, rather than performance fees linked to investment returns. This fee structure provides a steady revenue base despite fluctuations in investment performance and client flows. The management team emphasised their strong alignment with shareholders and clients, reaffirming their commitment to the firm’s long-term growth and stability.
Looking Ahead
As GQG Partners prepares for upcoming monthly FUM updates, investors will be watching closely to see if the firm can reverse the trend of net outflows and improve relative performance. The firm’s defensive posture may continue to influence results in the near term, but its sizeable investment gains in 2025 demonstrate resilience amid challenging market dynamics.
Bottom Line?
GQG’s ability to balance outflows with strong investment returns will be critical as market uncertainties persist into 2026.
Questions in the middle?
- Will GQG’s defensive strategy continue to weigh on relative performance in 2026?
- Can net outflows be stemmed or reversed in upcoming months?
- How will currency and macroeconomic factors impact future investment gains?
