Magellan High Conviction Fund

A concentrated portfolio invested in 8 to 12 of the world’s best global stocks

  • Unlisted
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Investment objectives

To achieve attractive risk-adjusted returns over the medium to long-term through investment in a concentrated portfolio (8-12 securities) of high-quality companies.

Fund facts

Portfolio managers Structure Fund size **
Hamish Douglass & Chris Wheldon, CFA
Hamish Douglass
Chris Wheldon, CFA
Global Equity Fund, $AUD AUD $582.9 million
Management fee Distribution Frequency ARSN
1.50% p.a.
0.78% p.a. Class B
Annually 164 285 947
Buy / Sell Spread APIR Code Initial Minimum Investment
0.07%/0.07% MGE0005AU
MGE9885AU Class B
$10,000
$100,000 Class B
Performance Fee

10% (20% for Class B units) of the excess return above the Absolute Return performance hurdle of 10% per annum. Additionally, Performance Fees are subject to a high water mark. For further details on Performance Fees, please read the relevant PDS and the Additional Information Booklet.

All management costs described above are inclusive of the estimated net effect of GST.
** As at 30 September 2019.

Investment philosophy

The Magellan High Conviction Fund seeks to invest in outstanding companies at attractive prices, while exercising a deep understanding of the macroeconomic environment to manage investment risk.

Magellan perceives outstanding companies to be those that are able to sustainably exploit competitive advantages in order to continually earn returns on capital that are materially in excess of their cost of capital.

While Magellan is extremely focused on fundamental business value, it is not a typical ’value’ investor. The Magellan High Conviction Fund will invest in companies that have relatively high price-to-earnings and price-to-book multiples, provided that their businesses are outstanding and their shares are trading at an appropriate discount to their assessed intrinsic value. Equities that appear undervalued on the basis of a low price-to-earnings or price-to-book multiples will often prove to be poor investments if the underlying business is fundamentally weak and exhibits poor returns on capital.

Magellan focuses on risk-adjusted returns, rather than benchmark-relative returns. As a result, the Magellan High Conviction Fund’s investment process is designed to generate an unconstrained, highly-concentrated portfolio of high-quality companies.

The Magellan High Conviction Fund’s will comprise of 8 to 12 investments, with the portfolio weighted towards Magellan’s highest-conviction ideas. The Fund may also hedge some, or all, of the capital component of its foreign currency exposure arising from investments in overseas markets back to Australian dollars.

Portfolio construction

The Magellan High Conviction Fund leverages off the Magellan Global Fund’s investment process, which integrates three key disciplines:

Intensive bottom-up stock analysis and industry research is undertaken in order to identify outstanding companies. This involves the assessment of potential investments against key quality criteria, as well as assessments of their intrinsic value. Magellan uses a proprietary ranking tool, the Magellan Conviction Scoring Matrix, to rank these companies based on these factors. This process enables the portfolio to be weighted towards higher conviction ideas (on a risk-adjusted basis).

Magellan’s detailed macroeconomic analysis is overlayed during portfolio construction, alongside the application of both fixed and dynamic risk limits. This process ensures that the portfolio is not overly exposed to aggregation risk (risk which arises from correlated portfolio positions) or macroeconomic event risk. Macroeconomic event risk can be a significant source of negative returns for investors. Magellan will make significant changes to the portfolio if it believes that macroeconomic events could lead to significant and sustained loss in value for investors. Such events would include a financial crisis, a sustained oil price shock, a global pandemic or a major global conflict.

Performance

Growth of AUD $10,000
30 September 2019

Calculations are based on exit price with distributions reinvested, after ongoing fees and expenses but excluding individual tax, member fees and entry fees (if applicable). Fund Inception 1 July 2013.

30 September 2019
Performance 3 Months 6 Months 1 Year 3 Years
(% PA)
5 Years
(% PA)
Since Inception
(% PA)
Magellan High Conviction Fund 1.13% 6.95% 7.26% 16.18% 14.69% 15.70%
Benchmark* - - - - - -
Out/Under Performance - - - - - -

** Inception date 01 July 2013

Important Information: Calculations are based on exit price with distributions reinvested, after ongoing fees and expenses but excluding individual tax, member fees and entry fees (if applicable). For the ASX Quoted Funds calculations are based on NAVs, published in the ASX announcements for the relevant ASX Quoted Funds, with distributions reinvested, after ongoing fees and expenses but excluding individual tax, member fees and entry fees (if applicable).

Unit Prices

  
Date Net Asset Value Entry Exit
21/10/2019 1.9353 1.9367 1.9339
18/10/2019 1.9209 1.9222 1.9196
17/10/2019 1.9429 1.9443 1.9415
16/10/2019 1.9481 1.9495 1.9467
15/10/2019 1.9456 1.9470 1.9442
14/10/2019 1.9223 1.9236 1.9210
11/10/2019 1.9234 1.9247 1.9221
10/10/2019 1.8933 1.8946 1.8920
09/10/2019 1.8838 1.8851 1.8825
08/10/2019 1.8591 1.8604 1.8578
04/10/2019 1.8873 1.8886 1.8860
03/10/2019 1.8651 1.8664 1.8638
02/10/2019 1.8476 1.8489 1.8463
01/10/2019 1.8801 1.8814 1.8788
30/09/2019 1.8922 1.8935 1.8909
27/09/2019 1.8816 1.8829 1.8803
26/09/2019 1.9073 1.9086 1.9060
25/09/2019 1.9168 1.9181 1.9155
24/09/2019 1.8977 1.8990 1.8964
23/09/2019 1.9228 1.9241 1.9215
20/09/2019 1.9325 1.9339 1.9311
19/09/2019 1.9403 1.9417 1.9389
18/09/2019 1.9260 1.9273 1.9247
17/09/2019 1.9201 1.9214 1.9188
16/09/2019 1.9145 1.9158 1.9132
13/09/2019 1.9260 1.9273 1.9247
12/09/2019 1.9302 1.9316 1.9288
11/09/2019 1.9244 1.9257 1.9231
10/09/2019 1.9104 1.9117 1.9091
09/09/2019 1.9236 1.9249 1.9223
06/09/2019 1.9293 1.9307 1.9279
05/09/2019 1.9388 1.9402 1.9374
04/09/2019 1.9103 1.9116 1.9090
03/09/2019 1.8894 1.8907 1.8881
02/09/2019 1.9128 1.9141 1.9115
30/08/2019 1.9126 1.9139 1.9113
29/08/2019 1.9149 1.9162 1.9136
28/08/2019 1.8843 1.8856 1.8830
27/08/2019 1.8774 1.8787 1.8761
26/08/2019 1.8767 1.8780 1.8754
23/08/2019 1.8563 1.8576 1.8550
22/08/2019 1.9069 1.9082 1.9056
21/08/2019 1.9173 1.9186 1.9160
20/08/2019 1.9060 1.9073 1.9047
19/08/2019 1.9207 1.9220 1.9194
16/08/2019 1.8995 1.9008 1.8982
15/08/2019 1.8769 1.8782 1.8756
14/08/2019 1.8691 1.8704 1.8678
13/08/2019 1.9146 1.9159 1.9133
12/08/2019 1.8873 1.8886 1.8860

Distribution history

Date Distribution per unit Reinvestment price  
June 2019 4.0000 cents $1.8711 Magellan Annual Fund Distributions 2019
June 2018 14.3420 cents $1.6903 Magellan Annual Fund Distributions 2018
June 2017 3.5000 cents $1.5412 Magellan Annual Fund Distributions 2017
June 2016 10.4415 cents $1.3047 Magellan Annual Fund Distributions 2016
June 2015 6.7959 cents $1.4274 Magellan Annual Fund Distributions 2015
June 2014 2.8258 cents $1.1333 Magellan Annual Fund Distributions 2014

Performance

Growth of AUD $100,000
30 September 2019

Calculations are based on exit price with distributions reinvested, after ongoing fees and expenses but excluding individual tax, member fees and entry fees (if applicable). Class B Fund Inception 15 November 2017.

30 September 2019
Performance 3 Months 6 Months 1 Year Since Inception
(% PA)
Magellan High Conviction Fund - Class B 1.26% 7.42% 7.86% 11.62%
Benchmark* - - - -
Out/Under Performance - - - -

** Inception date 15 November 2017. Returns greater than one year are annualised.

Important Information: Calculations are based on exit price with distributions reinvested, after ongoing fees and expenses but excluding individual tax, member fees and entry fees (if applicable). For the ASX Quoted Funds calculations are based on NAVs, published in the ASX announcements for the relevant ASX Quoted Funds, with distributions reinvested, after ongoing fees and expenses but excluding individual tax, member fees and entry fees (if applicable).

Unit Prices

  
Date Net Asset Value Entry Exit
21/10/2019 1.1824 1.1832 1.1816
18/10/2019 1.1741 1.1749 1.1733
17/10/2019 1.1864 1.1872 1.1856
16/10/2019 1.1892 1.1900 1.1884
15/10/2019 1.1878 1.1886 1.1870
14/10/2019 1.1748 1.1756 1.1740
11/10/2019 1.1752 1.1760 1.1744
10/10/2019 1.1571 1.1579 1.1563
09/10/2019 1.1513 1.1521 1.1505
08/10/2019 1.1361 1.1369 1.1353
04/10/2019 1.1532 1.1540 1.1524
03/10/2019 1.1396 1.1404 1.1388
02/10/2019 1.1289 1.1297 1.1281
01/10/2019 1.1487 1.1495 1.1479
30/09/2019 1.1561 1.1569 1.1553
27/09/2019 1.1497 1.1505 1.1489
26/09/2019 1.1654 1.1662 1.1646
25/09/2019 1.1708 1.1716 1.1700
24/09/2019 1.1595 1.1603 1.1587
23/09/2019 1.1741 1.1749 1.1733
20/09/2019 1.1795 1.1803 1.1787
19/09/2019 1.1836 1.1844 1.1828
18/09/2019 1.1757 1.1765 1.1749
17/09/2019 1.1724 1.1732 1.1716
16/09/2019 1.1692 1.1700 1.1684
13/09/2019 1.1755 1.1763 1.1747
12/09/2019 1.1778 1.1786 1.1770
11/09/2019 1.1745 1.1753 1.1737
10/09/2019 1.1666 1.1674 1.1658
09/09/2019 1.1740 1.1748 1.1732
06/09/2019 1.1770 1.1778 1.1762
05/09/2019 1.1820 1.1828 1.1812
04/09/2019 1.1663 1.1671 1.1655
03/09/2019 1.1540 1.1548 1.1532
02/09/2019 1.1676 1.1684 1.1668
30/08/2019 1.1673 1.1681 1.1665
29/08/2019 1.1685 1.1693 1.1677
28/08/2019 1.1508 1.1516 1.1500
27/08/2019 1.1466 1.1474 1.1458
26/08/2019 1.1461 1.1469 1.1453
23/08/2019 1.1336 1.1344 1.1328
22/08/2019 1.1637 1.1645 1.1629
21/08/2019 1.1694 1.1702 1.1686
20/08/2019 1.1631 1.1639 1.1623
19/08/2019 1.1712 1.1720 1.1704
16/08/2019 1.1594 1.1602 1.1586
15/08/2019 1.1460 1.1468 1.1452
14/08/2019 1.1413 1.1421 1.1405
13/08/2019 1.1675 1.1683 1.1667
12/08/2019 1.1523 1.1531 1.1515

Distribution history

Date Distribution per unit Reinvestment price  
June 2019 2.5000 cents $1.1417 Magellan Annual Fund Distributions 2019
June 2018 4.0835 cents $1.0303 Magellan Annual Fund Distributions 2018

Invest now in the Magellan High Conviction Fund

  1. Complete the Application Form & CRS Form(s) (if applicable)
    You will be guided by the Application Form as to which CRS form(s) to complete.

  2. Send application form to Mainstream Fund Services
    Mainstream Fund Services - Unit Registry
    GPO Box 143
    Sydney NSW 2001

Speak with your adviser/broker. To find an adviser, visit Financial Planning Association of Australia (FPA) or Association of Financial Advisers (AFA).

New to Investing? Learn more about our global equities

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  • Delivering outstanding results

    At Magellan, the key question we ask ourselves is: “What does the future look like?”. Our answer determines how we invest your money.

    Our global fund returns
  • Why global?

    The case for global investing rests largely on the belief that companies based outside Australia are expected to benefit the most from the key long-term shifts taking place all over the world.

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FAQs

If you have chosen to receive communication via email, you will receive confirmation of your investment within 3 business days from when our unit registry (Mainstream Fund Services) has received your correctly completed Application Form (or notice of additional investment) and cleared application monies. Please note that if you choose to invest by cheque or request us to process a direct debit, it may take up to two business days (in the case of a cheque) and three business days (in the case of a direct debit) for your application monies to clear. If you have chosen to receive communication via mail, please allow for postage time on top of the 3 business days from receipt of your correctly completed Application Form (or notice of additional investment) and cleared application monies

During distribution periods (at the start of July and the start of January for some funds) receipt of your confirmation statement may be delayed by 10-15 business days.

Important Information: Units in the fund(s) referred to herein are issued by Magellan Asset Management Limited (ABN 31 120 593 946, AFS Licence No 304 301). Past performance is not necessarily indicative of future results and no person guarantees the future performance of the fund(s), the amount or timing of any return from the fund(s), or that the investment objectives of the fund(s) will be achieved. This material has been provided for general information purposes and must not be construed as investment advice. It does not take into account the investment objectives, financial situation or particular needs of any particular person. Investors should consider obtaining professional investment advice tailored to their specific circumstances and should read the relevant Product Disclosure Statement (PDS) applicable to the fund(s) prior to making any investment decisions. The PDS for the fund(s) is available at www.magellangroup.com.au or can be obtained by calling 02 9235 4888. Any trademarks, logos, and service marks contained herein may be the registered and unregistered trademarks of their respective owners. Nothing contained herein should be construed as granting by implication, or otherwise, any licence or right to use any trademark displayed without the written permission of the owner. No part of this material may be reproduced or disclosed, in whole or in part, without the prior written consent of Magellan Asset Management Limited.

Unit Registry Enquiries

Unlisted Funds

Mainstream Fund Services provides a range of registry services including the processing of applications, redemptions and distributions as well as the maintenance of unitholder records.

Please contact Mainstream Fund Services directly for assistance with:

  • Applications or redemptions
  • Change of contact details
  • Change of bank account details

Telephone 1300 127 780 (in Australia) +61 2 8259 8566 (International) 0800 787 621 (New Zealand)