Magellan has reported a $4.9 billion drop in funds under management (FUM) during December to $45.3 billion, representing a fall of almost 10 per cent in a single month.
The fund manager experienced net outflows of $2.6 billion during December, including net retail outflows of $0.6 billion and net institutional outflows of $2.0 billion.
Institutional FUM sat at $26.4 billion at the end of the month, down from $29.6 billion a month earlier, while retail FUM fell from $20.6 billion to $18.9 billion over the same period.
Global equities FUM sank from $24.6 billion to $20.6 billion, infrastructure equities FUM dropped from $16.8 billion to $16.2 billion, and Australian equities FUM declined from $8.8 billion to $8.5 billion.
Magellan’s total FUM has more than halved over the past 12 months, with the fund manager previously reporting $95.5 billion in funds at the end of December 2021.
Average FUM for the six months ended 31 December 2022 was $53.8 billion compared to $112.7 billion for the six months ended 31 December 2021.
In a statement to the ASX on Friday, the fund manager indicated that performance fees for the six months ended 31 December 2022 are “not meaningful”.
Magellan funds will pay distributions of approximately $0.3 billion this month, which it said will be reflected in its January FUM figures due to be released next month.
In November, an entity associated with the family of Magellan co-founder Hamish Douglass sold approximately 13 million ordinary shares in the embattled fund manager.
Earlier, CEO David George said that Magellan will be a fund manager of a global scale once more with over $100 billion of FUM in the next five years.
FUM is a fickle measure. Most advisers move FUM as fleetingly as DIY clients. Quality managers see outflows in times of underperformance, this is usually when to invest. Magellan may be slightly different as it’s facing some credibility issues now also, but as with most cycles, most money flows just follow earlier money flows ‘because’. It’s pretty hard to get investing in quality meg-cap stocks wrong and while I’m glad I don’t own shares in the head company, I have little concern about the ability of the underlying global fund and infrastructure fund to preserve client capital and achieve. Disagree?