The Magellan Financial Group Ltd price ended another tough week, ending the day down 1.63% at $16.95 a share.
Internal and external pressures comes to full force, analysts across the board are expecting further outflows for the embattled fund manager in 2022.
Magellan reported $1.1 billion in net outflows between 11 March and 31 March. Total funds under management were $70 billion at the end of the March quarter. The Magellan share price spiked 11% yesterday after the announcement.
Macquarie Group is confident that shareholders will continue withdrawing funds from the firm, with outflows likely to persist until the 2024 financial year. It expects heavy outflows in Q4 FY22 that look set to extend well into a $7.8 billion outflow in 1H FY23.
“We expect outflows of $7.1 billion in 4Q FY22 and $7.8 billion in 1H FY23 as recent investment performance has remained below respective benchmarks and the stronger AUD will continue to weigh on investment performance,” it said in a note.
UBS also stated that a turnaround at Magellan is highly unlikely.
“Fundamentals remain poor with ongoing investment underperformance, reduced performance fee potential, higher outer year staff retention costs, and risks to retail fees,” an analyst at UBS commented.
Macquarie and UBS both have Magellan as a sell on a valuation of $13.25 and $13 respectively. In the last 12 months, the Magellan share price has slipped 65% into the red.