Changes are happening - please bear with us while we update our site.

Changes are happening - please bear with us while we update our site. Click here to give us your advice and feedback.

Magellan (ASX:MFG) share price drops on further FUM pain in November

The Magellan Financial Group Ltd (ASX: MFG) share price fell again, dropping 3% as the fund manager just revealed more pain.

The Magellan Financial Group Ltd (ASX: MFG) share price fell again, dropping 3% as the fund manager just revealed more pain.

Magellan was one of the largest fund managers in Australia. But it’s now suffering every month.

November monthly FUM pain

In what seems to be a regular occurrence, Magellan just told investors about another month which saw outflows exceed $2 billion.

In November, Magellan experienced net outflows of $2.5 billion, which was made up of net retail outflows of $0.6 billion and net institutional outflows of $1.9 billion.

The actual total FUM fell from $51 billion at the end of October 2022, to $50.2 billion at the end of November 2022. So, while there was a positive investment performance over the month, it was more than offset by the outflows.

Institutional investors taking their money away from Magellan’s global shares strategy seems to still be the problem.

Looking at the FUM breakdown, retail FUM rose from $20.5 billion to $20.6 billion, but institutional FUM dropped from $30.5 billion to $29.6 billion.

In terms of strategy, the global shares saw FUM decline from $26.3 billion to $24.6 billion. Infrastructure shares saw FUM rise from $16.2 billion to $16.8 billion. Australian shares FUM also saw a rise, going from $8.5 billion to $8.8 billion.

So, if Magellan were a fund manager focused on infrastructure and Australian shares for retail/regular investors, then it would have seen a rise of FUM.

What does this mean?

Magellan’s global funds continue to lose investor confidence it seems, which is hurting the Magellan share price.

The fund manager needs to deliver some outperformance to make it seem like it’s worthwhile to stick around. But, it can be a dangerous game to try to chase outperformance in the short-term.

The end of rising interest rates could be a boost for the business, as both its growth shares and defensive shares have suffered during this valuation reset.

At some point the FUM outflows are likely to stop, or heavily slow down. But, it’s suffering significant damage to earnings as billions of dollars of FUM flows out of the door.

It would help if the business were able to keep growing its infrastructure and Australian shares FUM, and perhaps make an acquisition to diversify earnings. But, I don’t think the Magellan share price is worth pursuing until the outflows stop, because it could continue to be a falling knife until then.

$50,000 per year in passive income from shares? Yes, please!

With interest rates UP, now could be one of the best times to start earning passive income from a portfolio. Imagine earning 4%, 5% — or more — in dividend passive income from the best shares, LICs, or ETFs… it’s like magic.

So how do the best investors do it?

Chief Investment Officer Owen Rask has just released his brand new passive income report. Owen has outlined 10 of his favourite ETFs and shares to watch, his rules for passive income investing, why he would buy ETFs before LICs and more.

You can INSTANTLY access Owen’s report for FREE by CLICKING HERE NOW and creating a 100% FREE Rask Account.

(Psst. By creating a free Rask account, you’ll also get access to 15+ online courses, 1,000+ podcasts, invites to events, a weekly value investing newsletter and more!)

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian owned.

Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.

At the time of publishing, Jaz does not have a financial or commercial interest in any of the companies mentioned.
Skip to content