The Magellan Financial Group Ltd (ASX: MFG) share price is currently down by 6.5%.
What’s happening to the Magellan share price?
The fund’s management business hasn’t released any announcements today. Looking at the ASX share market, the S&P/ASX 200 Index (ASX: XJO) is down by 0.51% at the time of writing.
As a funds management business, two of the leading influencers on the company’s funds under management (FUM) are market movements and fund flows.
Overnight, there was a decline in the global tech share names, including some of the biggest positions in the Magellan global equity portfolios.
For example, the Microsoft Corporation (NASDAQ: MSFT) share price fell 1.3%. The Alphabet Inc Class A (NASDAQ: GOOGL) share price dropped 1.7%.
In the last few months, the Magellan share price has also suffered as FUM inflows turned into outflows.
FUM declines
The latest fall of FUM that investors have seen was the update on 14 March 2022. The company said that as of 11 March 2022, it had FUM of approximately $69.1 billion. That compares to $93.5 billion on 31 January 2022.
Magellan explained that the decline in FUM comprised market movements (including foreign exchange and reflecting market volatility), net outflows and notifications of intention to redeem since the recent update on 25 February 2022.
Since 25 February 2022, Magellan has experienced net outflows of approximately $5 billion. That comprises $4.7 billion of net institutional outflows and retail net outflows of $300 million. Since 25 February 2022, Magellan has received notifications of intention to redeem $1 billion, which has been reflected in the above FUM figures.
Is the Magellan share price going to turn around?
Morgans, one of the brokers most optimistic about the fund manager, has a hold rating with a price target of $16.73. Despite increasing its profit expectations a little for the near term, the broker thinks Magellan will continue to see sizeable FUM exit the business.
One of the most negative brokers is Morgan Stanley, which has a price target of $12 on the business. It warns that more FUM loss will result in reduced profitability of the company because of the lost operating leverage.
The post Magellan share price sinks again, down 6% appeared first on The Motley Fool Australia.
Should you invest $1,000 in Magellan right now?
Before you consider Magellan, you’ll want to hear this.
Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Magellan wasn’t one of them.
The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.
*Returns as of January 13th 2022
More reading
- A toast! The Endeavour share price just hit an all-time high
- Is Newcrest Mining considered a defensive ASX share?
- ASX 200 (ASX:XJO) midday update: Block and Zip sink, Paladin Energy raises $200m
- Hoping to pocket the ARB Corporation dividend? Read this
- The EML share price jumped 25% in March 2022. What happened?
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Motley Fool contributor Tristan Harrison owns Magellan Financial Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Alphabet (A shares) and Microsoft. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Alphabet (C shares). The Motley Fool Australia has recommended Alphabet (A shares) and Alphabet (C shares). The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
from The Motley Fool Australia https://ift.tt/NplAZx0
Leave a Reply