It's fascinating how much many people are making out of the recent underperformance.

In my view, it's not the worst thing as it demonstrates that they are actually making bets and not index hugging. From what I can work out, it's been caused by:

1. A bet on Chinese Tech that went sour - I do think they got this one wrong, but I can't blame them for wanting exposure to this.
2. A focus on capital preservation generally - if we get a bear market, I'd expect to see outperformance.
3. Related to 2, holding more cash when the market went up crazily last year, which is a bet they got wrong, but one that I don't think was unwise to make.

Basically, long term I don't think that anything really affects their strategy.

• One significant risk I see is that some of their holdings seem weighted to big tech, which are at quite elevated prices, though, potentially not on a very long term basis.
• I do think the key person risk is more elevated now.

Disc - I've added a small holding IRL and on Strawman. May increase it if the price drops further.

Hi All

Re MFG watch the flows from now on. that si the real risk, flows usually follow performance with a lag. MFG need to stem this flow, to state the obvious, before negative operating leverage becomes a big issue.

flows have been negative, which is bad, but have not been horrendous so far. MFG are a first class marketing machine, thsi will be a big test for them.

i have bought a few recently, as a div play, so a backhanded compliment i suppose. i am watching the flows esp retail-high margin

I agree people are making bit too much of it and if this were an LIC where your only exposure was to their funds holdings I would be tempted to buy as the market threw it out.

However being a management business you have direct exposure to investors acting irrationally and withdrawing their money via outflows. Unlike other plays this is not the sort of thing I would buy while sentiment is bad.

Currently sitting at a 43% capital loss and it definitely takes courage to average down. However, if you flip this and think of it as a once-in-a-lifetime bargain opportunity for a 7% divvy yield, almost a no-brainer.