Magellan Financial Group Ltd (ASX: MFG) has reported a potential turnaround in its Funds Under Management (FUM) figures, eliciting a positive market response with a 2.18% increase in the Magellan share price. This positive development aligns with the broader trends in ASX financial stocks.
After experiencing a decline in FUM over the past few years, the company's latest update indicates a noteworthy improvement. In November, Magellan's FUM increased by 2.62%, rising from $34.3 billion on October 31 to $35.2 billion. This growth was attributed to increases in both retail and institutional funds, with retail funds rising from $16.1 billion to $16.7 billion, and institutional capital increasing from $18.2 billion to $18.5 billion. Investors in ASX financial stocks are likely to monitor Magellan's performance closely in light of this positive shift in Funds Under Management.
Within the different divisions, Australian equities and infrastructure equities experienced rises. Australian equities saw an increase from $4.3 billion to $4.7 billion, while infrastructure funds lifted from $14.8 billion to $15.5 billion. However, the global equities division recorded a decline, dropping from $15.2 billion to around $15 billion during the month.
Despite the positive FUM growth, Magellan revealed a net outflow of capital totaling $1 billion for November. This outflow comprised $300 million from retail investors and $700 million from institutional investors. The data suggests that the increase in FUM was largely driven by the appreciation in the value of the company's investing portfolios.
While Magellan still faces challenges and net outflows, the November FUM figures indicate a potential shift in momentum, providing a welcome development for the company and its investors. The positive market response with the increase in Magellan share price reflects optimism regarding the observed improvement in FUM metrics. Investors will likely closely monitor future updates to assess the sustainability of this positive trend and Magellan's overall performance.