Yes the funds management sector has lost sentiment. But sentiment will also
NEVER COME BACK.Active managers are having their carpets pulled from under their feet by the iShares and Vanguard's of the world, while investment platforms like Stake and SelfWealth are making it extremely cheap to buy international directly.
- Who needs an active manager when you can pay <10 bps for the S&P 500 and get better performance?
- Why even pay management fees when you can simply replicate a mega-cap tech portfolio yourself?
At the same time, the currents of how advisers and institutions allocate clients/members' money is rapidly changing. More and more are re-directing assets towards passive funds because of a combination of best-interest legal requirements, dealer groups wanting to do away with expensive research professionals, and large super funds seeking to lower fees so they can be competitive against their peers and attract more flows.
In parlance to property investors who buy fixer-uppers, this stock is nothing but a "money pit."
I expect relief rallies here and there, but I think we'll see $5 in the next 1-2 years. Magellan will never regain its glory, will continue to languish because beating the index is nearly impossible over time especially for larger and more bureaucratic companies like them, and once clients like St James's go they usually never come back.
I also note that the infrastructure strategy has started underperforming over 3 year periods. This must have been recent as I invested in it and got out during the COVID rally. Not good.
I would rather - and have - put money in government and corporate bonds, and stocks with sustainable dividends.
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