Magellan Shares Fall Despite Robust FUM Update

Magellan Financial Group Ltd (ASX: MFG) shares fell 3% today.

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.

Why Magellan Shares Fell

I think the blame for the share price can be put firmly on the ‘trade war’ that’s going on between the US and China.

Australian and global investors are worried that the trade war isn’t just a quick political move, but it seems as though it could go on for many months which may send local economies and the global economy into a recession if it goes unresolved this year.

Magellan would be affected because its funds under management (FUM) would fall as the market drops, leading to lower management fees.

However, I think there’s a good reason why Magellan’s share price is only down by 4% rather than a higher number.

Magellan FUM Update For July 2019

Magellan today released its FUM update for July 2019. It showed that its total FUM increased to $89.7 billion at 31 July 2019 from $86.7 billion at June 2019.

Most of the increase was seen from the global equities strategy, which increased from $64 billion to $66.4 billion.

In July the fund manager experienced net inflows of $574 million, which included net retail inflows of $349 million (including re-investing cash distributions) and net institutional inflows of $225 million. Speaking of distributions, Magellan paid $603 million of distributions in July, net of reinvestment.

This seemed like a very solid update from Magellan. If the share market wasn’t currently going through a tough time, its share price would probably be up a few percentage points.

In my opinion, Magellan is likely to keep attracting FUM inflows at an attractive rate. But until this volatility has finished I’d want to wait to see if an even better share price comes along.

Disclosure: At the time of publishing, Jaz does not have a financial interest in any of the companies mentioned.

From 200+ ETFs in Australia, our top investment analyst has just identified his #1 ETF for 2021 and beyond.

Low fees? Check.

Long-term growth potential? Check.

Regular cash returns? Check!

This ETF makes investing in ETFs "Super-Easy".

Simply click here or enter your email address below to access the full ETF report, ticker code, and step-by-step investment guide. Our expert's #1 ETF report is completely free.

No gimmicks, no payment, no credit card info. Just enter your email address below and we'll send you the report right away.

From 200+ ETFs in Australia, our top investment analyst has just identified his #1 ETF for 2021 and beyond.

Low fees? Check.

Long-term growth potential? Check.

Regular cash returns? Check!

This ETF makes investing in ETFs "Super-Easy".

Simply click here to access the full ETF report, ticker code, and step-by-step investment guide. Our expert's #1 ETF report is completely free.

No gimmicks, no payment, no credit card info. Just click the link below and enter your email address. We'll send you the report right away.

CLICK HERE TO GET THE REPORT

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.

Keep reading:

General Financial Advice warning
The information on this website is general financial advice only. That means, the advice does not take into account your objectives, financial situation or needs. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. 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. Please read our Terms & Conditions and Financial Services Guide before using this website.

© Rask Australia 2020

Join 20,000+ smart investors

Join the Rask Australia mailing and we’ll send you free investment reports, podcasts, expert insights, investing courses, ASX news and lots, lots more. All free. 

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

feedback-icon

What can we do better?

Howdy, ASX investor.

I really care about your experience today.

Please, let me know if you have any suggestions we can use to improve our site and help others invest in ETFs. 

Cheers! 

Owen Rask