What: While the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) staged a turnaround on Wednesday to finish the session up 0.6%, global investment powerhouse Magellan Financial Group Ltd (ASX: MFG) failed to excite investors after releasing an update in which it reported its latest funds under management. Magellan's share price finished down 1.2%.
So What: The drop in Magellan's share price would suggest that the update contained unwelcome news, however, in the most important respect the news was very good.
Magellan reported that in the month of September the company attracted $966 million in net fund inflow the inflows were split $771 million institutional and $173 million retail.
That's astounding growth!
The not so good news was that total funds under management (FUM) only increased by around $600 million on account of declines in portfolio values a not unexpected result considering the heightened volatility experienced across global markets in the past few months.
What now:
Even after today's fall, Magellan's share price is still nearly 60% higher now than it was one year ago. In comparison, the share price of the group's closest peer Platinum Asset Management Limited (ASX: PTM) has gained just 13% in the past year.
Interestingly, despite the massive rally in Magellan's share price the market capitalisation of the company is still around $800 million less than Platinum.
Even more interesting is the fact that Magellan's FUM is around $10 billion more than Platinum's and growing at a much faster rate! With both stocks trading on price-to-earnings multiples in the high teens there would seem some scope for Magellan's share price to continue to outperform its rival.