Hub24: Signs of Improving Flows, but Shares Already Too Hot

No-moat Hub24’s latest funds under administration update was similar to Netwealth’s in that there were signs of improved flows relative to the subdued levels seen in 2023. And like Netwealth, we think current rebounds in Hub24’s net inflows will be short-lived. We retain our expectation for Hub24’s rate of net inflows, as a percentage of starting FUA, to moderate over time. We also anticipate ongoing fee compression and reinvestment needs amid competition from other platforms. We consequently expect Hub24’s rate of margin expansion to moderate over the next five years.