Magellan High Conviction Fund

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

  • Unlisted
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  • Alibaba
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  • Facebook
  • VISA

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 $665.1 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 June 2020.

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 June 2020

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 June 2020
Performance 3 Months 6 Months 1 Year 3 Years
(% PA)
5 Years
(% PA)
7 Years
(% PA)
Since Inception
(% PA)
Magellan High Conviction Fund 5.88% - 4.79% 6.09% 12.60% 11.23% 14.69% 14.69%

** 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
14/07/2020 1.9944 1.9958 1.9930
13/07/2020 1.9925 1.9939 1.9911
10/07/2020 2.0249 2.0263 2.0235
09/07/2020 2.0249 2.0263 2.0235
08/07/2020 2.0123 2.0137 2.0109
07/07/2020 1.9674 1.9688 1.9660
06/07/2020 1.9807 1.9821 1.9793
03/07/2020 1.9519 1.9533 1.9505
02/07/2020 1.9563 1.9577 1.9549
01/07/2020 1.9296 1.9310 1.9282
30/06/2020 (ex) 1.9250 1.9263 1.9237
30/06/2020 1.9850 1.9864 1.9836
29/06/2020 1.9688 1.9702 1.9674
26/06/2020 1.9546 1.9560 1.9532
25/06/2020 1.9980 1.9994 1.9966
24/06/2020 1.9873 1.9887 1.9859
23/06/2020 2.0098 2.0112 2.0084
22/06/2020 1.9967 1.9981 1.9953
19/06/2020 1.9846 1.9860 1.9832
18/06/2020 1.9906 1.9920 1.9892
17/06/2020 1.9764 1.9778 1.9750
16/06/2020 1.9887 1.9901 1.9873
15/06/2020 1.9530 1.9544 1.9516
12/06/2020 1.9550 1.9564 1.9536
11/06/2020 1.9244 1.9257 1.9231
10/06/2020 1.9755 1.9769 1.9741
09/06/2020 1.9681 1.9695 1.9667
05/06/2020 1.9568 1.9582 1.9554
04/06/2020 1.9314 1.9328 1.9300
03/06/2020 1.9525 1.9539 1.9511
02/06/2020 1.9497 1.9511 1.9483
01/06/2020 1.9544 1.9558 1.9530
29/05/2020 1.9749 1.9763 1.9735
28/05/2020 1.9522 1.9536 1.9508
27/05/2020 1.9795 1.9809 1.9781
26/05/2020 1.9608 1.9622 1.9594
25/05/2020 1.9776 1.9790 1.9762
22/05/2020 1.9759 1.9773 1.9745
21/05/2020 1.9877 1.9891 1.9863
20/05/2020 1.9965 1.9979 1.9951
19/05/2020 1.9717 1.9731 1.9703
18/05/2020 1.9859 1.9873 1.9845
15/05/2020 1.9673 1.9687 1.9659
14/05/2020 1.9521 1.9535 1.9507
13/05/2020 1.9326 1.9340 1.9312
12/05/2020 1.9424 1.9438 1.9410
11/05/2020 1.9750 1.9764 1.9736
08/05/2020 1.9536 1.9550 1.9522
07/05/2020 1.9521 1.9535 1.9507
06/05/2020 1.9370 1.9384 1.9356

Distribution history

Date Distribution per unit Reinvestment price  
June 2020 6.0000 cents $1.9250 Magellan Annual Fund Distributions 2020
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 June 2020

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 June 2020
Performance 3 Months 6 Months 1 Year Since Inception
(% PA)
Magellan High Conviction Fund - Class B 6.10% - 4.55% 6.07% 10.09%

** 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
14/07/2020 1.2187 1.2196 1.2178
13/07/2020 1.2176 1.2185 1.2167
10/07/2020 1.2337 1.2346 1.2328
09/07/2020 1.2337 1.2346 1.2328
08/07/2020 1.2295 1.2304 1.2286
07/07/2020 1.2020 1.2028 1.2012
06/07/2020 1.2102 1.2110 1.2094
03/07/2020 1.1925 1.1933 1.1917
02/07/2020 1.1951 1.1959 1.1943
01/07/2020 1.1788 1.1796 1.1780
30/06/2020 (ex) 1.1759 1.1767 1.1751
30/06/2020 1.2109 1.2117 1.2101
29/06/2020 1.2011 1.2019 1.2003
26/06/2020 1.1923 1.1931 1.1915
25/06/2020 1.2188 1.2197 1.2179
24/06/2020 1.2123 1.2131 1.2115
23/06/2020 1.2259 1.2268 1.2250
22/06/2020 1.2179 1.2188 1.2170
19/06/2020 1.2105 1.2113 1.2097
18/06/2020 1.2141 1.2149 1.2133
17/06/2020 1.2054 1.2062 1.2046
16/06/2020 1.2129 1.2137 1.2121
15/06/2020 1.1911 1.1919 1.1903
12/06/2020 1.1923 1.1931 1.1915
11/06/2020 1.1736 1.1744 1.1728
10/06/2020 1.2047 1.2055 1.2039
09/06/2020 1.2002 1.2010 1.1994
05/06/2020 1.1932 1.1940 1.1924
04/06/2020 1.1776 1.1784 1.1768
03/06/2020 1.1904 1.1912 1.1896
02/06/2020 1.1887 1.1895 1.1879
01/06/2020 1.1916 1.1924 1.1908
29/05/2020 1.2040 1.2048 1.2032
28/05/2020 1.1900 1.1908 1.1892
27/05/2020 1.2066 1.2074 1.2058
26/05/2020 1.1952 1.1960 1.1944
25/05/2020 1.2054 1.2062 1.2046
22/05/2020 1.2043 1.2051 1.2035
21/05/2020 1.2115 1.2123 1.2107
20/05/2020 1.2168 1.2177 1.2159
19/05/2020 1.2017 1.2025 1.2009
18/05/2020 1.2103 1.2111 1.2095
15/05/2020 1.1989 1.1997 1.1981
14/05/2020 1.1896 1.1904 1.1888
13/05/2020 1.1777 1.1785 1.1769
12/05/2020 1.1837 1.1845 1.1829
11/05/2020 1.2035 1.2043 1.2027
08/05/2020 1.1904 1.1912 1.1896
07/05/2020 1.1894 1.1902 1.1886
06/05/2020 1.1802 1.1810 1.1794

Distribution history

Date Distribution per unit Reinvestment price  
June 2020 3.5000 cents $1.1759 Magellan Annual Fund Distributions 2020
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

    Or Email the application form to magellanfunds@mainstreamgroup.com

    Temporary processes available during COVID-19

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

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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)