The Magellan Financial Group Ltd (ASX: MFG) share price is slumping 8.6% to $10.73 — an eight-year low — following an update from the wealth manager.
According to Magellan's latest monthly funds under management (FUM) statement, there has been yet another net outflow as nervous investors continue to pull their money out.
In September, investors withdrew a net $3.6 billion. About $3.2 billion of this was institutional money and $400 million was retail investors' money. Total FUM is now $50.9 billion.
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Magellan share price smashed after big FUM outflow
The September outflow is well above that of August when a $1.3 billion outflow reduced the total FUM to $60.2 billion.
Magellan has an explanation for part of the outflow last month.
As per the statement:
Approximately half of the institutional outflows relate to the liquidity requirements of a client impacted by global market volatility in late September.
The king is back
Magellan co-founder Hamish Douglass returned to work this week in a new consultancy role.
Earlier this year, Douglass was serving as the Chair and chief investment officer (essentially, the primary stock picker) at Magellan before taking a medical leave of absence in February.
The company later announced he would return as a consultant and a new CEO would be appointed.
That new CEO is David George, formerly the deputy chief investment officer for public markets for Australia's Future Fund. He commenced as CEO in August.
Douglass has been credited as the key to Magellan's long-term success since it began operations in 2006.
How's the share buyback going?
One might say Magellan is doing what every investor should do when the market is fearful. As the great Warren Buffett says, that's the time to be "greedy". To wit: Magellan is currently undertaking an on-market share buyback of up to 10 million shares.
And why wouldn't they? This time last year the Magellan share price was close to $29. That's almost three times higher than today's share price. Two years ago, it was about $55.
According to today's buyback update, Magellan has bought back 2,233,203 shares since announcing the program in April.
Over this period, Magellan has paid a maximum share price of $13.30 and a minimum of $10.93.
The buyback is scheduled to conclude in April 2023.
