Why Magellan’s (ASX:MFG) funds under management fell in July

Magellan Financial Group Ltd (ASX:MFG) on Thursday reported a fall in funds under management (FUM) in July on account of net outflows from institutional customers. The Sydney-based funds management business’ FUM declined by AU$1.1 billion to AU$60.2 billion last month.

“In July, Magellan experienced net outflows of $2.5 billion, which comprised net retail outflows of $0.4 billion and net institutional outflows of $2.1 billion,” Magellan Financial Group said.

As of 29 July 2022, retail and institutional FUM stood at AU$22.6 billion and AU$37.6 billion, respectively. The total FUM in July was AU$60.2 billion.

FUM is the total market value of investments that a person or entity handles on behalf of investors.

Magellan’s performance in June

When compared with that of June 2022, retail and institutional FUM stood at AU$22.2 billion and AU$39.1 billion, respectively. The total FUM was AU$61.3 billion. “The change in FUM over the June quarter comprised market movements (reflecting recent volatility and foreign exchange) and net outflows,” the ASX company had said in its June filing.

Magellan’s experienced net outflows stood at AU$5.2 billion in the June quarter. The outflows comprised net retail outflows of AU$1.7 billion and net institutional outflows of AU$3.5 billion.

“Magellan funds will pay distributions (net of reinvestment) of approximately $0.4 billion in July, which will be reflected in FUM figures in next month’s announcement,” Magellan had also said in its June update.

Meanwhile, Magellan’s FUM stood at AU$116.4 billion as of 30 November 2021. The company’s FUM has been falling ever since. As of 23 February 2022, Magellan’s FUM was AU$77.2 billion. Magellan’s FUM fell to AU$65 billion as on 31 May 2022.

Magellan’s share price snapshot

Shares of Magellan Financial Group have been among the topmost laggards in the ASX200 Index (ASX: XJO). Over the past year, the company’s share price has fallen over 67%. The share price fell over 23% on a year-to-date (YTD) basis. In the past six months, the shares have dipped over 11%. The share price has risen nearly 25% in the past month.

However, in the last five days, the stock has surged by over 2.5%. The 52-week high and low of the stock stands at AU$51.85 and AU$11.10, respectively.