Magellan lifts funds in July despite retail outflows

The news: Investment manager Magellan Financial Group’s funds under management have risen in July on the back of its investments increasing in value.

The numbers: Magellan’s FUM lifted to $38.4 billion at July-end, up from $36.6 billion recorded in June. It experienced net retail outflows of $1 billion in the month, which included $800 million of net redemptions from the Magellan Global Fund after the conversion of Closed Class units to Open Class units on 22 July. These were offset by net institutional inflows of $0.9 billion.

Magellan shares were up 0.5% to $9.40 in early trading on the ASX.

The context: Magellan said the retail redemptions were from specialist investors that purchased Closed Class units at a discount to net asset value. It expects a further $200 million in similar redemptions in August. The fund manager has endured a challenging period over the last three years during which it has suffered investment underperformance, seen departures of senior management figures and faced significant outflows. Despite a steady improvement in FY24, Magellan’s current FUM is a fraction of the $113.9 billion corpus it held at the end of FY2021.