In today’s daily we have covered stock research on  Magellan Financial  (HOLD).











 
The S&P 500 was up by 0.71points or 0.03% on Friday to 2031.92 points.  U.S. stocks closed little changed on Friday, pressured by renewed uncertainty in healthcare stocks and by Disney shares, even as October payrolls data pointed to a resilient economy in the face of sluggish global growth. Health insurers fell sharply after the U.S. Supreme Court agreed to hear a challenge to a key part of the Obamacare health law that, if successful, would limit the availability of federal health insurance subsidies for millions of Americans. 

Walt Disney Co fell 2.2 percent to $90 a day after earnings met expectations. The stock had closed Thursday at $92, a record high. Energy shares on the S&P 500 were the day's strongest performers, rising 1 percent. The sector is down 1.4 percent so far this year. Turbulence hit Russia’s rouble. It touched new lows against the dollar and the euro on concerns over the central bank’s softer policy on defending the currency aster it said on Wednesday that it would not spend more than $350m a day buying roubles to ease the currency’s slide.




Walt Disney Daily Chart (Source – Thomson Reuters)
S&P ASX 200was up by 43.0points or 0.78%on Friday and closed at 5549.1 points. CBA jumped 2.8 per cent to $82.76 over the week having delivered a record first-quarter profit of $9.5 billion on Thursday. Westpac Banking Corp, which handed down its full-year results on Monday, rose 0.2 per cent to $34.84. ANZ Banking Group fell 1.9 per cent to $32.88, and National Australia Bank slipped 5.1 per cent to $33.22, as both traded ex-dividend on Friday.
Gold stocks also came under pressure as the precious metal’s spot price dipped almost 3 per cent to a 4.5-year low at less than $US1135 per ounce. Australia’s biggest goldminer, Newcrest Mining, fell 5.7 per cent to $8.79. Junior gold producer Resolute Mining was the worst-performing stock in the ASX 200, dropping 13.5 per cent over the week to 22.5¢. Utilities and telecommunications were the strongest sectors over the week as investor sentiment turned defensive. 

Newcrest Mining Group Daily Chart (Source – Thomson Reuters)
 
Top Performers on the ASX 200 were :-


 
Stock of the day - Magellan Financial (HOLD)
Strong overall flows have continued in September 2014 although flows in the higher margin colonial retail product fell to less than A$100m the first time since Jan 2014 and well down on the A$159m seen in the previous corresponding period . Institutional flo9ws remain strong with A$301m seen in September 2014 bringing FY15YTD institutional flows to A$1.6bn. Across the listed fund managers in Australia MFG remains the preferred exposure given the expectation of continued FUM flows across both the retail and institutional channels and exposure to asset classes with less structural head winds than listed competitors.

Investment Performance (Source - Company Reports)

As at the end of September 2014, MFG has A$26.8bn in Funds Under Management (FUM) up significantly on the previous corresponding period. In September 2014 flows contributed A$401m of the A$1.6bn increase on the prior month with the appreciation of the USD over the month assisting performance and AUD denominated balance. While the Global Equity fund has underperformed over the last year, MFG has benefited to some degree that the index is up significantly over the time period.


Magellan Global Fund FUM (Source - Company Reports)


In the past one of the key attractions of MFG’s products was the significant outperformance the funds have enjoyed over a number of time periods with the Global Fund generating meaningful outperformance relative to the benchmark over most time periods since inception. Over the past couple of years the fund has underperformed the index which we view as a concern if the underperformance continues into outer years performance and the absolute level of market begins to slide.


Magellan Financial Group Daily Chart (Source - Thomson Reuters)
Magellan Financial Group (MFG) is a boutique funds management group specializing in global equities and global listed infrastructure strategies for high net worth, retail and institutional investors. The Australian industry is supported by mandated growth in the superannuation industry with contribution set to rise from 9% of gross salary currently to 12% by 2019. We put a HOLD recommendation on the stock at the current price of $14.64.


 
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