Reduction of performance fees as a result of moderation of MSFT, FB, Google etc from latter part of 2020 to Feb 2021 has resulted in moderation of high PE given to MFG. Current PE around 19 , when it portfolio shares are in high twenties seems ok to me. However Market has not re rated on higher management fee MFG can expect now on higher FUM. I reckon FUM will be touching $110B as at end of April 2021. This increase of on top of March increase will hopefully change the market perception very soon. Market will need to start valuing MFG EPS around 2.80 very soon. I don’t expect it to go back to mid sixties soon, mid fifties has to be around the corner. This scenario is based on no contribution from principal investments and retirement product Hamish talks about.
MFG Price at posting:
$48.50 Sentiment: Buy Disclosure: Held
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