The Magellan Financial Group Ltd (ASX: MFG) share price could a mover today after announcing its monthly funds under management (FUM).
Magellan is a funds management business that largely invests in international shares like Facebook and Visa. It was set up in 2006 by Hamish Douglass and Chris Mackay. Since inception, Magellan claims it has been one of the most consistent market outperformers after fees.
Magellan’s September 2019 Monthly FUM
Magellan announced its monthly FUM this morning. The global fund manager revealed that its total FUM fell by $20 million from $92.09 billion to $90.07 billion through September 2019.
During September, Magellan experienced total net inflows of $462 million, which comprised net retail inflows of $175 million and net institutional inflows of $287 million.
The main cause of the slight decrease of FUM was that the global equities section suffered a net $715 million decline to $67.58 billion because of market declines.
But the other two strategies saw solid gains. The infrastructure strategy grew FUM by $390 million to $16.54 billion and the Australian shares strategy saw an increase of FUM by $305 million to $7.95 billion.
Retail investors have $24.306 billion invested with Magellan (a $110 million decrease from last month) and institutional investors have $67.766 billion (an increase of $90 million from last month) invested with Magellan.
Magellan also reminded investors of yesterday’s announcement that
the Magellan High Conviction Trust had indicatively raised $862 million. That’s a lot of fixed money that Magellan will now be earning an attractive management fee from.
Magellan also disclosed that the estimated costs of the offer, including the loyalty units and IPO foundation units, that will be paid for by Magellan are around $55 million.
The investors who participated in the loyalty offer will receive an extra 7.5% units and the investors who took part in the general offer will get an extra 2.5% units.
The $862 million raised will be reflected in next month’s FUM update.
Magellan is certainly one to watch as it continues to grow its FUM at an impressive rate, but it’s trading at a pretty hefty valuation for a fund manager, so I’m not sure now is the best time to buy, even with the decent dividend yield.
For dividends and long term growth I’d rather buy the attractive shares revealed for free in the report below.
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