The Magellan Financial Group Ltd (ASX: MFG) share price is on course to end the week with a day in the red.
In early trade, the embattled fund manager's shares were down 6% to $17.95. They have since recovered a touch but remain down 2.5% to $18.58 at the time of writing.
This means the Magellan share price is now down 62% since this time last year.
Why is the Magellan share price falling?
Investors have been selling down the Magellan share price today after it provided an out-of-cycle funds under management update.
According to the release, at the close of the US market on 9 February, Magellan's funds under management stood at approximately $87.1 billion. This represents funds under management declines of 6.85% from $93.5 billion at the end of January and 8.8% from $95.5 billion at the end of December.
The release explains that Magellan has experienced net outflows (excluding cash distributions paid) of approximately $5.5 billion since 1 January. This comprises net institutional outflows of $5.0 billion and net retail outflows of $0.5 billion.
These funds under management and net outflows are unaudited and comprise amounts that have been or are being redeemed of $3.6 billion and amounts for which Magellan has received notification of intention to redeem of $1.9 billion.
The latter could well increase as the month rolls on. Particularly given how a number of influential investment ratings agencies have put its funds under review and Zenith Investment Partners has reportedly cut the ratings on five of Magellan's global funds to just "recommended" from "highly recommended."
The AFR reports that Zenith Investment Partners has called Hamish Douglass' indefinite leave a "material loss" for the fund manager.
It quotes Zenith saying: "Given our high regard for Mr Douglass, we consider his leave of absence to be a material loss for Magellan's global equities suite and overall business."
All eyes will be on Magellan's next funds under management update at the start of March.
