The Magellan Financial Group Ltd (ASX: MFG) share price was up 2.45% in early trade this morning and in the absence of any news or announcements from the company, this is likely due to a broker upgrade by Shaw and Partners who now rate the stock as a buy.
Magellan is a global equities and infrastructure fund manager with a good track record of growth in funds under management and outperformance. Its share price is up 18% over the last year despite a 55% plunge in performance fees that was announced as part of the FY 2017 results, as investors expect funds under management to continue to grow. The company has active plans to launch a new fund.
Foolish takeaway
Magellan remains a high-quality founder-led business with a good reputation for its performance in the offshore markets. It may face potential headwinds however with the growing popularity of index funds.
