Key Highlights

• For the first half of 2026 the average fee realisation rate was 48.6 basis points, compared with 48.2 in the first half of 2025.

• For the six months to 30 June 2026, GQG reported net Revenue of US$397.2 million, down 1.4% on the prior corresponding period.

• Net Income attributable to the company was US$228.4 million, a slight decline from US$230.2 million.

• The Operating Margin was 76.0%, against 76.2% a year earlier, and operating expenses edged lower.

How much can a fund manager's Earnings hold up when clients keep withdrawing money? That is the central question for GQG Partners (ASX:GQG), which reported steady first-half profit for 2026 even as net outflows reached US$15.1 billion, and which has since lost its place in the S&P/ASX 200 index. The answer so far is that earnings have been cushioned by high average funds under management, but the cushion depends on flows stabilising.

What GQG does and how it earns

GQG Partners is a global active Equity manager built around four core strategies: International Equity, Emerging Markets Equity, Global Equity and US Equity. It runs concentrated, benchmark-agnostic portfolios and distributes them through wholesale platforms, sub-advisory arrangements and institutional mandates.

Revenue is mainly a management fee charged on funds under management (FUM), with performance fees as a smaller and more volatile addition. For the first half of 2026 the average fee realisation rate was 48.6 basis points, compared with 48.2 in the first half of 2025. Because fees are calculated on average rather than closing balances, a fall in FUM feeds into revenue with a lag.

All figures below are in US dollars unless stated.

The first-half result

For the six months to 30 June 2026, GQG reported net revenue of US$397.2 million, down 1.4% on the prior corresponding period. Net income attributable to the company was US$228.4 million, a slight decline from US$230.2 million. Distributable earnings were US$234.9 million. The operating margin was 76.0%, against 76.2% a year earlier, and operating expenses edged lower.

Average FUM was US$164.5 billion, up 1.0%, which explains why revenue held up. Closing FUM, however, fell to US$156.0 billion from US$172.4 billion at the start of the year. Net outflows of US$15.1 billion compared with inflows of US$8.0 billion in the first half of 2025, while Investment performance added US$7.2 billion.

Chief executive Tim Carver attributed the outflows to relative underperformance during the half. By strategy, closing FUM was US$70.1 billion in International Equity, US$37.1 billion in Emerging Markets, US$35.5 billion in Global and US$13.3 billion in US Equity.

The board declared a second-quarter Dividend of US$0.0362 per share, equal to 90% of that quarter's distributable earnings, with a payment date of 25 September 2026. The company has no debt.

Recent trading update

GQG publishes monthly FUM updates. At 30 September 2026 total FUM was US$149.2 billion. September saw net outflows of US$2.3 billion, broadly offset by US$2.4 billion of investment gains. For the third quarter, net outflows were US$11.1 billion and investment gains US$4.4 billion.

Two points stand out. First, outflows have continued at a meaningful pace after the first half. Second, the company says all four core strategies produced positive absolute and relative returns in September and the quarter, which is the kind of improvement that would need to persist before flows could be expected to respond. Past returns do not guarantee future flows or performance.

Context: the 2025 comparison

The first-half figures follow a encouraging 2025. For the year to 31 December 2025, net revenue was US$808.3 million, up 6.3%, and net income attributable to GQG was US$463.3 million, up 7.3%, with an operating margin of 77%. Closing FUM was US$163.9 billion.

Even so, 2025 already showed signs of a turn. Net flows for the year were negative US$3.9 billion, with Q4 2025 outflows of US$7.1 billion, compared with inflows of US$20.2 billion in 2024. The 2026 outflows are therefore a continuation and acceleration of a trend rather than a sudden break.

Index status

GQG is no longer a member of the S&P/ASX 200. The index provider announced on 4 September 2026 that GQG would be deleted from the index at the September quarterly rebalance, effective before the open on Monday 21 September 2026. Elsight, Smartgroup, Sunrise Energy Metals, Service Stream and Weebit Nano were added, while EVT, GrainCorp, Pantoro Gold and Tuas left alongside GQG.

Index membership does not change a company's earnings, but it can affect trading Liquidity and the pool of index-tracking investors holding a stock. S&P has not tied the removal to any operational event.

Sector and competitive position

Active equity managers globally face fee pressure and a long-running shift of Assets toward passive products and exchange-traded funds. In that environment, performance relative to benchmarks is the dominant driver of client behaviour, and managers with concentrated, high-conviction portfolios can see larger swings in both flows and returns than diversified peers.

GQG has pointed to product innovation, particularly ETFs, noting growth in its US Equity ETF, as one response. Its strengths include a very high operating margin and a debt-free balance sheet. Its vulnerability is concentration: a small number of strategies, a heavy reliance on performance and a client base that can move quickly.

Reported long-term composite returns are mixed. Since inception, annualised net returns for International Equity and Global Equity were above their benchmarks, while Emerging Markets and US Equity were slightly below, according to figures published with the half-year result.

Risks and what to watch

The most direct risk is further net outflows. If closing FUM stays below the first-half average, fee revenue is likely to fall, and with a high payout policy, dividends would follow earnings. The distributable earnings payout of 90% means the dividend is variable rather than fixed.

Other uncertainties include currency movements, since results are reported in US dollars, market Volatility that affects the value of the assets on which fees are charged, and competition from lower-cost products. Performance fees can swing sharply from year to year, as the 44% fall in 2025 illustrated.

Management has not provided formal earnings guidance, so any projection of profit is an interpretation rather than a company statement.

Upcoming data points include the monthly FUM updates, the fourth-quarter dividend and the full-year 2026 result, which last year was released in February.

Summary

GQG's recent results show a Business with encouraging margins and resilient earnings, supported by a high average asset base, yet facing a sustained period of client withdrawals. Whether recent improvements in investment returns translate into steadier flows will largely determine the trajectory from here.