Magellan Financial posts first monthly net outflow since 2018

Magellan Financial suffered its first monthly net outflows in two years after institutional investors withdrew $516m in April.

Magellan’s Hamish Douglass. Picture: Britta Campion

Magellan Financial has suffered its first monthly net outflows in two years after institutional investors whipped $516m from the fund in April.

While institutional investors pulled funds from the Hamish Douglass-led fund manager, retail investors helped to stem the outflows by pumping $228m into the fund in the month, for an overall net outflow of $288m.

It is the first time Magellan has suffered overall net outflows since May 2018, but investors looked through the news to push the share price above $60 in intraday trade, double the lows it hit in March when the market was in free fall.

Despite the outflows Magellan grew its funds under management in the month to $98.454bn, up from $96.973bn, as markets around the globe staged a recovery from the coronavirus-induced correction that began in late February.

The funds management giant saw its funds under management rise across Australian and global equities, as well as its institutional equity holdings.

It comes as the fund manager launched the Airlie Australian Share Fund on the ASX, with Magellan chief executive Brett Cairns saying it represented an evolution of active ETFs in Australia.

“This simplification eliminates the need to have two separate funds, one for investors who prefer using unlisted funds and another for those who prefer funds quoted on a stock exchange. Instead, investors, advisers and brokers will now be able to invest in a single, open-ended fund using the access point they prefer,” he said.

“Magellan has always focused on simplifying the investment process for our investors and reducing unnecessary frictions and costs. We intend to use these next generation open-ended funds to deliver effective investor solutions in the future.”

The Airlie Australian Share Fund, managed by Perpetual’s former head of equities Matt Williams, has returned 2.7 per cent per year since inception in June 2018 and has outperformed the Australian market by 0.9 per cent per year over that period.

Mr Williams said he was excited to make Airlie’s investing expertise accessible to investors through the ASX.

“Airlie’s approach to investing has been developed over 25 years and employs a conservative and robust process that weighs the financial strength, business quality, quality of management and valuation of each company,” he said.

Founded by John Sevior and David Cooper in 2012, Airlie was bought by Magellan in 2018. The Airlie Australian Share Fund is the fourth active ETF launched by the fund manager.