06-July-2023: Funds-Under-Management-and-Performance-Fee-Update--June-2023.PDF

Not what we wanted to see, in terms of further FUM outflows. However, the distribution amount and the performance fees earned are not too bad. Compare that to one year ago (the same notice for the FY ended June 30, 2022):

08-July-2022: Funds-Under-Management---June-2022.PDF

Comparisons:

June 30 FY23, vs June 30 FY22, movement (%):

Global Equities: $19.1 billion vs. $33.3 billion -42.6%

Infrastructure Equities: $16.1 billion vs. $20.1 billion -19.9%

Australian Equities: $ 4.5 billion vs. $ 7.9 billion -43.0%

Total FUM: $39.7 billion vs. $61.3 billion -35.2%

Note: Total FUM change (%) includes both flows (inflows and outflows) and investment performance.

July Distribution: $ 0.3 billion vs. $ 0.4 billion -25%

Performance Fees: $11 million vs. $11 million Same

Hopefully the columns above will survive in both the PC and App (mobile device) versions of Strawman.com.

My takeaway from this is that we should expect lower dividends than last year, even though the performance fees earned are the same, because the base management fees would be lower, because they are based on less FUM (funds under management). However, I'm happy to continue to hold MFG shares because I think they can still turn this around.

I don't think they're going back to $60/share any time soon, but I think they can get back closer to $20 than $10, given time.

The market does not like today's announcement, clearly, and that is to be expected, because after their outflows had slowed and their insto flows were flat in May, they saw $1.7 billion of insitutional outflows in June. Not what we want to see. It means the IT (investment thesis) could take longer than expected. Assuming it does play out.

They did have a little run-up recently, and the Sandon Capital (SNC) presentation would have been part of the reason behind that rally, but today's FUM, Fees & Distributions announcement provides a bit of a reality check, in terms of where they are now.

Note: The July Distributions ($0.3 billion this month) are to the unitholders of the funds that MFG manage, rather than MFG dividends. The MFG dividends will be declared later and will be based on fees earned (base fees plus performance fees) and their available cash (which is a significant amount of cash currently).

Disclosure: I hold MFG and SNC shares in real life, but not here on SM.