On Thursday, MFG was the second strongest stock on the local bourse, gaining +6.1% after announcing flat flows for June, made up of $200mn inflows from institutions and $200mn outflows from retail. This is an encouraging result, as June is a big month of outflows for retail, given pension requirements. Also, MFG announced they would receive performance fees of around $19mn.
No one likes MFG and we can understand why, it’s been a storied demise, however, investing is about the future, not the past and when we value the sum of the parts, we get a number a long way above where it’s trading. To realise that value, they need to maintain, and ideally grow FUM, which relies on good performance. There are early signs that FUM and performance are improving, hence yesterday’s pop. We think there is plenty of upside for this recovery play.
- We remain positive towards MFG targeting the $11-12 area—MM is long MFG in our Active Growth and Active Income Portfolios.