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Highlights:
- Magellan Financial has reported AU$5.2 billion of net outflows in June quarter.
- The fundie has also witnessed a lot of management and leadership board changes lately.
- In a year, MFG shares have sunk over 73%, extending losses by 2.607% today morning (8 July)
Australia’s well-known fund manager Magellan Financial Group Limited (ASX:MFG) has reported net outflows for June quarter. The company stated that the changes in FUM (Funds Under Management) for the concerned quarter can be attributed to important market movements like volatility and foreign exchange.
For the June quarter, Magellan has reported net outflows of AU$5.2 billion. The total FUM figure stands at AU$61.3 billion as at 30 June 2022.
Notably, in March, Magellan held a total FUM of AU$70 billion and in May, the FUM quoted was AU$65 billion. This suggests a significant drop of more than AU$5 billion from May to June.
Apart from the FUM update, Magellan has also reported an estimated performance fees of about AU$11 million for the year ended 30 June 2022.
Meanwhile on ASX, post announcement, MFG share price has lowered 2.607% and was spotted trading at AU$11.950 apiece at 1:39 PM AEST.
Magellan Financial Group has lost more than 34% in last six months and more than 73% in last one year.
Key Highlights from Magellan’s June update
Besides reporting a lowered FUM in June 22, Magellan posted a significant drop in Global, Infrastructure and Australian equities.
According to Magellan, recent market volatility and foreign exchange movements have resulted in this considerable tumble. In June quarter, Magellan witnessed a net outflow of AU$5.2 billion, comprising of net retail outflows of AU$1.7 billion and net institutional outflows of AU$3.5 billion.
In the same update, the company stated that Magellan funds will be paying distributions of around AU$0.4 billion in July. This will be reflected in FUM data in next month’s announcement.
What else has happened at Magellan recently?
Magellan’s co-founder Hamish Douglass informed on 1 July 2022 that he had sold more than 760,000 shares in the company. As per media reports, Douglass resigned from Magellan board in March and quit as an executive in June.
Another noteworthy development inside Magellan has been the retirement announcement of its sales and distribution head, Frank Casarotti. Reportedly, Frank will be exiting the company by December 2023.
Bottom line
A lot has changed inside Magellan and even a lot of funds have been withdrawn by investors recently. Moreover, the business is also facing issues with earnings growth, a rising trend of passive investment, international market volatility and challenges from the Australian superannuation reforms. All these factors together seem to be pressurising the margins, fees and valuations of the fundie. However, the future trajectory of Magellan is still uncertain.
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