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Why the Magellan Financial Group Ltd share price is trading higher today

The Magellan Financial Group Ltd (ASX: MFG) share price was up 2.45% in early trade this morning and in the absence of any news or announcements from the company, this is likely due to a broker upgrade by Shaw and Partners who now rate the stock as a buy.

Magellan is a global equities and infrastructure fund manager with a good track record of growth in funds under management and outperformance. Its share price is up 18% over the last year despite a 55% plunge in performance fees that was announced as part of the FY 2017 results, as investors expect funds under management to continue to grow. The company has active plans to launch a new fund.

Foolish takeaway

Magellan remains a high-quality founder-led business with a good reputation for its performance in the offshore markets. It may face potential headwinds however with the growing popularity of index funds.

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Motley Fool contributor Kevin Gandiya does not own shares in any company mentioned in this article. You can find Kevin on Twitter @kevingandiya 

The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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