The Magellan (ASX: MFG
) share price is up 12%, it’s going bananas.
What is Magellan?
Magellan is a funds management business that largely invests in international shares like Facebook and Visa. It was set up in 2006 by Hamish Douglass and Chris Mackay. Since inception, Magellan claims it has been one of the most consistent market outperformers after fees.
What is going on with Magellan?
This morning the fund manager released its monthly funds under management (FUM) update to investors for March 2020.
Magellan disclosed that its total FUM declined by 6.6% to $94 billion compared to a month ago. However, whilst the fund manager experienced net retail (regular investor) outflows of $303 million it actually saw net inflows of $469 million thanks to net institutional inflows of $772 million.
Some investors would say that it’s impressive that Magellan continues to see net inflows despite one of the worst months in the history of the share market.
Magellan saw a fall in the value of its FUM in all areas – retail, institutional, global equities, infrastructure equities and Australian equities.
The fund manager benefits from rising share prices because the value of its FUM goes up, which means higher management fees.
Is Magellan a buy?
I think Magellan could be the best ASX-listed fund manager, but it’s certainly priced as such. It might be a decent long term buy today, but I’d rather wait for another pullback rather than buying. In the meantime, these ASX technology shares could be better buys:
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Disclosure: at the time of publishing, Jaz does not have a financial interest in any of the companies mentioned.
