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Magellan (MFG) announces strong FY20 with June FUM

The Magellan (ASX: MFG) share price is up more than 4% after announcing its June 2020 FUM and the performance fees for FY20.

What is Magellan?

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.

Here’s what Magellan announced

Magellan said that total FUM at 30 June 2020 was $97.18 billion, down from $98.45 billion at 29 May 2020.

In June Magellan experienced net inflows of $249 million, which included net retail inflows of $173 million and net institutional inflows of $76 million.

Magellan’s funds will pay distributions, net of reinvestment, of approximately $650 million in July, and net institutional inflows of $76 million.

The fund manager said it’s entitled to estimated performance fees of approximately $81 million for FY20. Average FUM for FY20 was $95.5 billion, up from $75.8 million in FY19.

Summary

Magellan has proved to be one of the best fund managers over the past decade. Both for shareholders of the manager and investors in the funds.

I’m not sure if Magellan is a buy today – it has risen strongly since March 2020 and it’s priced expensively compared to many other fund managers on the ASX. However, it’s one of the few fund managers that is growing FUM at an impressive pace each year. But it has a decent dividend yield and could grow further once it eventually launches its retirement product.

Disclosure: At the time of writing, Jaz doesn’t own shares in any of the businesses mentioned. 

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