Do you have an updated view on MFG?

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Question asked 28/01/2023

Do you have an updated view on MFG?

Hi James and MM team, Happy new year! I know you don't have any interest in MFG currently but as a previous holder and with your deep insights, I would like to hear your opinion on a few things. 1. Usually MFG share price is correlated to the Nasdaq but last week or so it seems to not have embraced nasdaq gains, is something astray? 2. Over the next year or two, If outflows continue at similar rates and possible management fees are lowered. What would be the expected outcome? Would and could they go bankrupt or would earnings just continue contracting and the P/E accordingly. Thanks, Chris

Answer

Hi Chris,

As you say MFG has been closely correlated to the NASDAQ over recent years due to its investment bias towards US growth & tech stocks however this has eased slightly, in December 2022 the High Conviction Trust (Managed Fund) top 5 holdings were:

Alphabet (GOOGL US), Intercontinental Exchange (ICE US), Microsoft (MSFT US), Visa In (V US) and Yum! Brands Inc (YUM US).

The stock will move more in line with its holdings as opposed to a specific sector because performance is what this stock needs to get back on track. However if outflows continue at similar rates and possible management fees are lowered in an attempt to maintain FUM we think the stock will simply continue to slide lower.

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Magellan Financial Group (MFG)

LAST UPDATED 27/01/2023 17:27

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