The Magellan Financial Group Ltd (ASX: MFG) share price is crashing back down to earth on Friday morning.
At the time of writing, the struggling fund manager's shares are down 9% to $8.85.
As you can see below, this means the Magellan share price is now down over 50% since this time last year.
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Why is the Magellan share price sinking?
Judging by its gains in recent sessions, it appears that some investors were betting on a recovery from Magellan in 2023.
Unfortunately, they may have jumped the gun on that one and have been hitting the sell button this morning in response to another bleak funds under management update from Magellan.
According to the release, Magellan ended December with funds under management of $45.3 billion. This comprises $20.6 billion across global equities, $16.2 billion across infrastructure equities, and $8.5 billion across Australian equities.
As you might have guessed from the Magellan share price reaction, the company's funds have fallen hard since the end of last month. In fact, its funds under management of $45.3 billion represents a $4.9 billion or 10% reduction since the end of November.
Management advised that the company experienced net outflows of $2.6 billion during the month, which included net retail outflows of $0.6 billion and net institutional outflows of $2.0 billion. Unfavourable foreign exchange movements also weighed on the value of its funds.
All in all, this latest decline in the company's funds under management means that it averaged $53.8 billion in funds during the six months to 31 December. This is more than half what it averaged ($112.7 billion) in the prior corresponding period. How the mighty have fallen!
Performance fees update
Also potentially weighing on the Magellan share price is an update on its performance fees for the period.
Given the poor performance of its funds, the company's performance fees for the six months ended 31 December 2022 are not expected to be meaningful.
