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the Magellan Financial Group Ltd. (ASX:MFG) The stock price is on track to end the week with a day in the red.
In early trading, shares of the troubled fund manager were down 6% at $17.95. They have since recovered a touch but remain down 2.5% at $18.58 at the time of writing.
That means Magellan’s share price is now down 62% from the same time last year.
Why is the Magellan stock price falling?
Investors sold Magellan share price today after providing an off-cycle funds under management update.
According to the statement, at the close of the US market on February 9, Magellan’s funds under management were approximately $87.1 billion. This represents a drop in funds under management 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 statement explains that Magellan has recorded net outflows (excluding cash distributions paid) of approximately $5.5 billion since January 1. This includes institutional net outflows of $5.0 billion and retail net outflows of $0.5 billion.
These funds under management and net outflows are unaudited and include amounts that have been or are being redeemed of $3.6 billion and amounts for which Magellan has received a notice of intent to redeem of $1.9 billion dollars.
The latter could well increase over the month. Particularly given the way a number of influential investment rating agencies have put its funds under review and Zenith Investment Partners has reportedly lowered the ratings of five of Magellan’s global funds from “recommended” to “strongly”. recommended”.
AFR reports that Zenith Investment Partners has called Hamish Douglass’ indefinite furlough a “material loss” for the fund manager.
He quotes Zenith as saying, “Given our high regard for Mr. Douglass, we view his leave as a material loss to Magellan’s continued global equities and overall business.”
All eyes will be on Magellan’s next funds under management update in early March.