Magellan Fumbles Yet Again

The Magellan Financial Group Ltd was smashed again today ending the day as one of the markets worst performers after more bad news was announced.

By the end of the day, the Magellan share price tumbled almost 14%to $12.85. That’s over 36% lower than it was at the start of 2022.

This morning, the company announced its funds under management (FUM) continued to fall in May. Meanwhile, the market’s also likely reacting to news Magellan has been dumped from the S&P/ASX 100 Index (ASX: XTO).

As of the end of last month, the funds management business was overseeing $65 billion. That’s $3.8 billion less than it was charged with at the end of April. The company’s retail funds under management fell 4.8% to $23.6 billion in May while its institutional FUM fell 5.4% to $41.4 billion.

The global equities segment of their fund was the biggest loser on the company’s FUM – slipping $2.8 billion to $35.2 billion. Meanwhile, Australian equities slumped around $800 million to $9.1 billion and infrastructure equities stayed flat at $20.7 billion.

Further to this, Magellan will also be removed from the ASX 100 in news that was released after Friday’s market close. The ramifications of this of course is that funds tracking the index will be forced to also remove Magellan from their holdings from 20 June.

The company was rocked by news St James’s Place – which previously accounted for around 12% of the company’s revenue – had abandoned its contract with Magellan in December.

Finally, Magellan co-founder and former chair and chief investment officer Hamish Douglass stepped down from the board following a period of scrutiny in March.