Ann: Funds Under Management - December 2021, page-28

I just thought I'd share my thoughts.

31 Dec FUM reported as $95.491B. If you add back the SJP and the net outflows ($25.1552) you get FUM of $120.6462B, up from $113.304 on 30 Sep. So an increase of $7.3422B over the 3 months independent of SJP and retail and institutional outflow. That's ~9+% return independent of the outflows.

The current share price of ~$20 indicates a full year dividend of $0.70 at the long-term average dividend yield of 3.5%. FUM would have to drop significantly to get to this level, and I mean in the order of > 50%. Do you think that is really likely to happen?

The just released FUM announcement and performance fee update indicate $416m payout plus $11m in performance fees, against $132m and $12m for FUM reported at 31 Dec 2020. The interim dividend then was $0.971 so I would be guessing that the dividend paid in Feb will be in excess of this. The full year results will be different but the SJP mandate was worth 6% going forward, the off-book costs at the end of last financial year were in the vicinity of 30%, so still ahead I think.

I'm a kind of glass half full type of guy, and a long-term holder prepared to wait out the volatility, but can't understand why you would sell, especially of you are sitting on a loss as I think it will turn. Magellan is now with FMG, RIO and other mining shares with 10+% dividend payout. Is it that risky? I see the share price slide but, really...I think if you are a seller you are nuts!

Interested in others thoughts.

All IMHO. DYOR.