The Magellan Financial Group Ltd (ASX: MFG) share price is currently down by 6.5%.
What's happening to the Magellan share price?
The fund's management business hasn't released any announcements today. Looking at the ASX share market, the S&P/ASX 200 Index (ASX: XJO) is down by 0.51% at the time of writing.
As a funds management business, two of the leading influencers on the company's funds under management (FUM) are market movements and fund flows.
Overnight, there was a decline in the global tech share names, including some of the biggest positions in the Magellan global equity portfolios.
For example, the Microsoft Corporation (NASDAQ: MSFT) share price fell 1.3%. The Alphabet Inc Class A (NASDAQ: GOOGL) share price dropped 1.7%.
In the last few months, the Magellan share price has also suffered as FUM inflows turned into outflows.
FUM declines
The latest fall of FUM that investors have seen was the update on 14 March 2022. The company said that as of 11 March 2022, it had FUM of approximately $69.1 billion. That compares to $93.5 billion on 31 January 2022.
Magellan explained that the decline in FUM comprised market movements (including foreign exchange and reflecting market volatility), net outflows and notifications of intention to redeem since the recent update on 25 February 2022.
Since 25 February 2022, Magellan has experienced net outflows of approximately $5 billion. That comprises $4.7 billion of net institutional outflows and retail net outflows of $300 million. Since 25 February 2022, Magellan has received notifications of intention to redeem $1 billion, which has been reflected in the above FUM figures.
Is the Magellan share price going to turn around?
Morgans, one of the brokers most optimistic about the fund manager, has a hold rating with a price target of $16.73. Despite increasing its profit expectations a little for the near term, the broker thinks Magellan will continue to see sizeable FUM exit the business.
One of the most negative brokers is Morgan Stanley, which has a price target of $12 on the business. It warns that more FUM loss will result in reduced profitability of the company because of the lost operating leverage.
