How Aussie fundies are impacted by Trump tariffs

The impact of the US Trump tariff regime makes should give investors in Australia’s publicly-listed fund managers pause, according to new analysis from research and ratings house, Morningstar.

Morningstar equity analyst, Shaun Ler has pointed to the likelihood of the fund managers suffering a “a gradual medium-term earnings decline” due to fading cyclical tailwinds from rate cuts and rising volatility under the new US administration likely suppressing flows.

According to Ler, the earnings impact from tariff uncertainties should be bearable this fiscal year but fully felt in fiscal 2026.

“As rate cuts are priced in and volatility rises, we expect business wins to slow down, with fee compression and growth investments restraining earnings growth,” he wrote

“As a cohort, our covered firms are still losing market share for flows. We expect this trend to persist over the next five years. More than half of our covered firms—GQG, Perpetual, Magellan, and Platinum—are likely to experience net outflows over the medium term.”

Ler wrote that while the likely impact of tariffs presents downside risks to near-term earnings, Morningstar saw no material impact to its fair value estimates for Challenger, GQG, Insignia, Magellan, Perpetual, Pinnacle and Platinum.

“Our forecasts allow for weaker market returns and flows in the near term. However, fiscal 2020-24 showed that investor pessimism is usually followed by a rebound in risk appetite when uncertainty and volatility subside.”

Ler wrote that Perpetual and Insignia offer the best value at current prices. Perpetual is forecast to benefit from cost cuts, fund compounding, and stable corporate trust earnings, while Insignia should see slower fee compression, steadier fund flows, and scalable cost reductions.