The Magellan Financial Group Ltd (ASX: MFG) share price has been amongst the best performers on the S&P/ASX 200 index on Thursday.
In morning trade the fund manager's shares are up 4% to $53.90.
Why is the Magellan share price charging higher?
Investors have been buying the company's shares this morning following the release of its latest funds under management update.
According to the release, at the end of August the company's total funds under management had increased 2.6% month on month to $92,092 million.
This was driven by favourable market movements and net inflows of $315 million. The latter comprised net retail inflows of $162 million and net institutional inflows of $153 million.
Magellan's funds continue to be heavily weighted towards global equities. The Global Equities business now accounts for approximately 74.1% or $68,291 million of funds under management. Whereas the Infrastructure Equities business accounts for ~17.4% or $16,154 million and the Australian Equities business contributes 8.3% or $7,647 million of its funds.
Should you invest?
I've been very impressed with the company's performance over the last 12 months and believe it is head and shoulders above the likes of Pendal Group Ltd (ASX: PDL) and Platinum Asset Management Ltd (ASX: PTM).
However, with its shares up more than 100% since the start of the year, I think they are a touch expensive now and intend to wait in hope of a better entry point further down the line.
After all, based on Citi's estimate for earnings per share of ~$2.11 in FY 2020, Magellan's shares are now changing hands at almost 26x forward earnings. This strikes me as a bit rich for a fund manager and I believe better value can be found elsewhere in the market.
Macquarie Group Ltd (ASX: MQG) shares, for example, can be bought for around 14x estimated forward earnings at present.
