Magellan share price tumbles on $2.5b fund haemorrhage in November

The Magellan Financial Group Ltd (ASX: MFG) share price has come under pressure on Tuesday.

In morning trade, the struggling fund manager’s shares are down 3.5% to $9.16.

This means the Magellan share price has now lost two thirds of its value over the last 12 months.

Why is the Magellan share price falling again?

Investors have been hitting the sell button again on Tuesday for a couple of reasons.

The first is a very poor night of trade on Wall Street, which saw the Dow Jones fall 1.4% and the Nasdaq tumble 1.9%. This was driven by concerns that the US Federal Reserve may continue its tightening until it tips the economy into a recession.

In response to this poor session, the S&P/ASX 200 Index (ASX: XJO) has dropped 0.4% today.

What else?

Also weighing on the Magellan share price today is news that the company continues to bleed funds under management (FUM).

For the month ended 30 November, Magellan finished the period with FUM of $50.2 billion, comprising retail FUM of $20.6 billion and institutional FUM of $29.6 billion.

This represents a month on month decline of 1.57% from $51 billion at the end of October despite the ASX 200 index racing 6.1% higher last month.

What happened?

Unfortunately for Magellan, not even global markets having one of their best months in recent times was able to offset yet another large monthly outflow from investors.

The release notes that in November, Magellan experienced net outflows of $2.5 billion, which comprised net retail outflows of $0.6 billion and net institutional outflows of $1.9 billion.

This means that Magellan’s FUM has now fallen by approximately 57% from $116.4 billion a year ago despite the market trading higher and the Australian dollar weakening against the US dollar.

The post Magellan share price tumbles on $2.5b fund haemorrhage in November appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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