Magellan share price lifts despite April funds outflow

Magellan lost some ground over the month just gone…

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The S&P/ASX 200 Index (ASX: XJO) is enjoying a strong start to the trading week so far this Monday. At the time of writing, the ASX 200 has gained a rosy 0.58%. The Magellan Financial Group Ltd (ASX: MFG) share price is doing even better though.

Magellan shares closed last week's trading going for $8.74. But this morning, the ASX 200 fund manager opened at $9.10 a share and is currently up 0.97% at $8.82.

That's despite Magellan revealing another drop in the company's funds under management (FUM) this morning.

Yes, before market open, Magellan revealed its latest FUM figures to investors, covering the month of April.

FUM drops over April for ASX 200 fund manager

Magellan reported that its total FUM as of 30 April came in at $36.3 billion. That represents a drop of 2.68% from the $37.3 billion the company was running at the end of March.

Over the month just gone, Magellan saw its retail FUM decline from $17.8 billion to $17.1 billion. Institutional FUM also fell by a similar amount, dropping from $19.5 billion down to $19.2 billion.

All three of Magellan's divisions saw declines last month.

The Global Equities division went from $16.2 billion to $15.6 billion.

Infrastructure Equities dipped from $15.6 billion to $15.4 billion.

Australian Equities saw its value slip to $5.3 billion from $5.5 billion.

Overall, the company revealed that new flows over April were "flat", with $200 million in institutional inflows cancelled out by $200 million in retail investor outflows.

As such, the decline in Magellan's overall funds management can probably be put down to the movements of global share markets. April was a tough month for some investors around the world. To illustrate, it saw the ASX 200 lose a hefty 2.9%, while the flagship American index – the S&P 500 Index (SP: .INX) – lost a nasty 4.16%.

It was always going to be hard for Magellan's investment portfolios to deliver a positive return given this barren backdrop.

As such, this may be why investors don't seem too worried about today's FUM figures out of Magellan.

April's numbers come after Magellan had a reasonably happy March. As my Fool colleague covered at the time, the previous Magellan FUM report had the company reveal a 2.5% month-on-month increase in FUM. That included healthy rises over both its Global Equities and Australian Equities divisions.

Magellan share price snapshot

Despite today's gains though, the Magellan share price remains down by just over 6% year to date. Saying that, Magellan shares have risen by 3.5% over the past 12 months.

At the current stock price, Magellan shares are trading on a price-to-earnings (P/E) ratio of 7.9, with a trailing dividend yield of 7.83%.

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.

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