Turnaround? Here's why the Magellan share price is bouncing today

Is the Magellan ship finally turning around?

| More on:
A woman sits at her computer with her hand to her mouth and a contemplative smile on her face as she reads about the performance of Allkem shares on her computer

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Long-suffering investors of Magellan Financial Group Ltd (ASX: MFG) are used to seeing negative funds under management (FUM) updates for the company.

After a dramatic fall from grace over the past few years, Magellan has struggled to keep investors' money in-house. Having once managed over $100 billion in FUM, last month we covered how funds under management had slumped yet again to $34.3 billion. At the end of August, the company had $39 billion on its books.

But in some good news today, Magellan's latest FUM figures show a potential turnaround.

It might be behind the bounce we are seeing in the Magellan share price during this Wednesday's trading. At present, Magellan shares are up 2.18% at $7.72 each.

Why are Magellan shares bouncing higher on Wednesday?

So over November, the company's FUM increased, a turnaround of the seemingly relentless drops that Magellan has had to report every month for a long time.

Coming off reporting a total FUM of $34.3 billion on 31 October, Magellan informed investors today that its FUM had risen over November by 2.62% to $35.2 billion.

That was built on retail funds rising from $16.1 billion to $16.7 billion, and institutional capital increasing from $18.2 billion to $18.5 billion.

The company's Australian equities and infrastructure equities divisions both saw rises. Australian equities rose from $4.3 billion to $4.7 billion, while infrastructure funds lifted from $14.8 billion to $15.5 billion.

However, the company's global equities division fell, dropping from $15.2 billion to around $15 billion over the month just gone.

It's not all good news for Magellan though. The fund manager also revealed that it still experienced a net outflow of capital over the month of $1 billion. $300 million of that came from retail investors pulling their money, with the other $700 million coming from institutional investors.

This tells us that Magellan's FUM growth almost certainly came from the value of its investing portfolios appreciating.

Even so, this news will no doubt be appreciated by those with an interest in the Magellan share price today.

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Financial Shares

A man with arms spread yells as he plunges into a swimming pool.
Earnings Results

Which ASX All Ords stock is diving 18% on FY23 results?

Investors aren't happy with the company's 32% decline in earnings per share in FY23.

Read more »

Happy man working on his laptop.
Financial Shares

Up 21% in a month: Can GQG shares climb even higher?

These experts reckon GQG shares have plenty of room to climb higher.

Read more »

Man raising both his arms in the air with a piggy bank on his lap, symbolising a record high.
52-Week Highs

2 ASX 200 financial shares hitting 52-week highs on earnings results

These two ASX 200 financial shares hit new 52-week highs after the companies released their results.

Read more »

Man pointing at a blue rising share price graph.
Earnings Results

Up 55% in a year, GQG share price charging higher again on surging revenue results

ASX investors are sending the GQG share price soaring today.

Read more »

a group of people in business attire gather around a computer in an office environment with expressions of concern as they try to nut out the answer to a challenge they are facing.
Earnings Results

QBE share price tumbles despite 105% FY23 profit jump

QBE's result was strong but perhaps not quite strong enough.

Read more »

Woman disappointed at share price performance with her hands on her face.
Earnings Results

IAG share price sinks 6% despite huge dividend boost and buyback

This insurance giant had a strong first-half thanks to premium increases. But was it not strong enough?

Read more »

Man in a wheelchair at a desk, checking his computer.
Dividend Investing

Beyond ASX 200 bank shares: 3 insurance plays with nice dividends

Lots of different industries can be a good source of income. I think insurance could be a good place to…

Read more »

Emotional euphoric young woman giving high five to male partner, celebrating family achievement, getting bank loan approval, or financial or investing success.
Earnings Results

AMP share price rockets 10% amid 2023 earnings boost

ASX 200 investors are sending the AMP share price soaring today.

Read more »