The Magellan (ASX: MFG) share price has fallen after the fund manager announced its funds under management (FUM) for December 2019.
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 December 2019 Funds Under Management (FUM)
Magellan announced that its FUM fell by around $200 million over December from $97.715 billion to $97.516 billion.
The decline was despite Magellan experiencing net inflows of $469 million which included net retail inflows of $282 million and net institutional inflows of $187 million.
Looking at the two sources of FUM, retail FUM actually grew by $190 million to $26.9 billion but institutional FUM dropped by $389 million to $70.616 billion.
There were also FUM changes for the different investment strategies that Magellan manages. The global equities strategy saw FUM fall by $129 million during December 2019. Meanwhile, the infrastructure equities strategy saw a FUM increase of $35 million. Lastly, Magellan’s Australian equities strategy saw a drop of the FUM by $105 million.
Magellan also told investors that its various funds will pay distributions (net of reinvestment) of approximately $99 million in January, which will be reflected in the FUM figures in next month’s funds under management announcement.
December 2019 Half Year Guidance
Magellan didn’t any official profit guidance numbers, but it has certainly revealed some of the numbers to make an accurate estimate about what the half year result for FY20 may look like.
The fund manager revealed that it is entitled to performance fees of approximately $42 million for the six months ended 31 December 2019. Magellan cautioned that performance fees (if any) may fluctuate significantly from period to period.
Average FUM for the six months ended 31 December 2019 was $92.77 billion. This compares to the average of $72.073 billion for the six months ended 31 December 2018.
