Morningstar cuts fair value on Australia’s Magellan on flagship fund's shifting ownership

Magellan Financial

05/05/2026 19:40

** Morningstar cuts Magellan Financial's MFG.AX fair value estimate after fund manager hands management of its flagship global equity funds to a lower-cost partner

** Cuts fair value to A$8 per share from A$8.65, saying change of ownership reflects rising competitive pressure

** Notes MFG is reducing fees on ~A$5 billion of assets, while giving up performance fees on those strategies

** Warns the changes limit near-term recovery; adds it does not expect earnings improvement as fee reductions directly compress margins and cost savings only partly offset the impact

** Vinva Investment Management may slow outflows over time due to its niche, systematic approach, but unlikely to reverse redemptions from MFG - Morningstar

** Morningstar lifts cost of capital assumption to better reflect structural headwinds; says market is underestimating pressure from cheaper passive alternatives

** YTD, MFG down 3.5% as of last close

(Reporting by Kumar Tanishk in Bengaluru)

((Tanishk.Kumar@thomsonreuters.com; X: @thatstanishk http://www.x.com/thatstanishk;))