It was another disappointing day of trade for the Magellan Financial Group Ltd (ASX: MFG) share price on Friday.
The struggling fund manager's shares ended the day almost 7% lower at $14.20. This latest decline means the Magellan share price has now lost over a third of its value in just 2022.
And if we were to go back and compare things to this time last year, the company's shares are down by a whopping two-thirds.
Why did the Magellan share price tumbling today?
Investors were selling down the Magellan share price on Friday following the release of an update on the performance of flagship Global Fund.
As you might have guessed from the share price reaction, Magellan's team did the not deliver a strong investment performance during the month of February. In fact, the Global Fund lost 7.2% during the month, which compares unfavourably yet again to a 5.4% decline by its benchmark.
This means that on a 12-month basis the flagship fund is now trailing its benchmark by a sizeable 9.1%.
Investors appear concerned that this underperformance could continue to weigh on its funds under management (FUM). Particularly given its high management fees of 1.35%.
As a comparison, rival GQG Partners Inc (ASX: GQG) charges management fees of just 0.49% on average for its funds. Furthermore, its global equity strategy returned -0.57% net of fees during February, much better than Magellan's 7.2% decline.
Is this a buying opportunity?
The team at UBS don't believe the weakness in the Magellan share price is a buying opportunity. Earlier this week the broker put a sell rating and $13.50 price target on the fund manager's shares.
Unfortunately, its analysts now have concerns with its infrastructure FUM. UBS warned that there is an emerging risk that these FUM will be next to flow out to other fund managers. This follows a recent investment underperformance from this side of the business.
