Why the Magellan Financial Group Ltd share price is rocketing today

Shares in international equities manager Magellan Financial Group Ltd (ASX: MFG) surged 5% to $27.90 reportedly on the back of a broker upgrade to its recommendation on the stock.

Yesterday, Magellan revealed decent monthly net fund inflows of $539 million largely supported by net institutional inflows of $495 million. Net retail inflows totalled just $44 million for the month as the firm continues to navigate the consequences of its 6.25% “loyalty unit” offering to eligible investors in its newly-listed Magellan Global Trust (ASX: MGG).

The group will also hope for a return on its investment via greater retail FUM flows given a substantial marketing investment as the lead sponsor of the 2017/18 Ashes cricket series, although it does not appear to have materialised as  yet in terms of retail FUM flows.

The fund manager also confirmed it will reap $9 million in performance fees for the six-months ending December 31, 2017.

Total funds under management for the month of December slipped to $57.9 billion, compared to $58.6 billion a month earlier. The rapid rise of the Australian dollar over the month the main reason for the FUM fall.

Market conditions could hardly be better for the blue-chip tech investor right now and the group will hand in its half-year results on February 6, 2017.

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Motley Fool contributor Tom Richardson owns shares in Magellan Ltd and Magellan Global Trust. 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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