Magellan High Conviction

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

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.

Invest in the world's best

  • Alibaba
  • Alphabet
  • Microsoft
  • Tencent
  • Facebook

Choose from two unique access points

Investors can access the Magellan High Conviction Strategy either as an unlisted managed fund or as a Listed Investment Trust listed on the ASX. These funds offer investors the same global equities investment strategy, but with individual choice about how to access the strategy:

 Unlisted units in the managed fund are available for purchase and redemption with the fund itself via an application form. Just complete an application form and deliver to the fund’s registry.

Listed units are listed on the ASX (ASX:MHH) as a closed ended Listed Investment Trust and can be purchased and sold via either a stockbroker or an online share trading platform. Closed ended units can trade at a premium or discount to the Net Asset Value. If you participate in the Distribution Reinvestment Plan (DRP) you can reinvest your distributions with a 5% discount to the Net Asset Value.

 

To find out more about your preferred method of access, and for information on how to invest, please select either the unlisted or listed toggle below.

 

Fund facts

Portfolio managers Structure Fund size **
Hamish Douglass & Chris Wheldon, CFA
Hamish Douglass
Chris Wheldon, CFA
Global Equity Fund, $AUD AUD $734.9 million
Management fee Distribution Frequency ARSN
1.50% p.a.
0.78% p.a. Class B
Bi-annual 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 31 October 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.

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
31 October 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.

31 October 2020
Performance 3 Months 6 Months 1 Year 3 Years
(% PA)
5 Years
(% PA)
7 Years
(% PA)
Since Inception**
(% PA)
Magellan High Conviction Fund 5.08% 10.05% 8.30% 11.85% 11.33% 15.04% 15.05%

** 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
01/12/2020 2.0689 2.0703 2.0675
30/11/2020 2.0395 2.0409 2.0381
27/11/2020 2.0578 2.0592 2.0564
26/11/2020 2.0587 2.0601 2.0573
25/11/2020 2.0568 2.0582 2.0554
24/11/2020 2.0609 2.0623 2.0595
23/11/2020 2.0453 2.0467 2.0439
20/11/2020 2.0444 2.0458 2.0430
19/11/2020 2.0452 2.0466 2.0438
18/11/2020 2.0286 2.0300 2.0272
17/11/2020 2.0418 2.0432 2.0404
16/11/2020 2.0498 2.0512 2.0484
13/11/2020 2.0646 2.0660 2.0632
12/11/2020 2.0465 2.0479 2.0451
11/11/2020 2.0502 2.0516 2.0488
10/11/2020 2.0449 2.0463 2.0435
09/11/2020 2.0864 2.0879 2.0849
06/11/2020 2.1051 2.1066 2.1036
05/11/2020 2.0951 2.0966 2.0936
04/11/2020 2.0906 2.0921 2.0891
03/11/2020 2.0358 2.0372 2.0344
02/11/2020 2.0709 2.0723 2.0695
30/10/2020 2.0631 2.0645 2.0617
29/10/2020 2.0984 2.0999 2.0969
28/10/2020 2.0526 2.0540 2.0512
27/10/2020 2.0913 2.0928 2.0898
26/10/2020 2.0709 2.0723 2.0695
23/10/2020 2.1202 2.1217 2.1187
22/10/2020 2.1035 2.1050 2.1020
21/10/2020 2.1006 2.1021 2.0991
20/10/2020 2.1143 2.1158 2.1128
19/10/2020 2.0927 2.0942 2.0912
16/10/2020 2.1155 2.1170 2.1140
15/10/2020 2.1062 2.1077 2.1047
14/10/2020 2.1015 2.1030 2.1000
13/10/2020 2.1176 2.1191 2.1161
12/10/2020 2.1044 2.1059 2.1029
09/10/2020 2.0690 2.0704 2.0676
08/10/2020 2.0701 2.0715 2.0687
07/10/2020 2.0603 2.0617 2.0589
06/10/2020 2.0343 2.0357 2.0329
02/10/2020 2.0262 2.0276 2.0248
01/10/2020 2.0440 2.0454 2.0426
30/09/2020 2.0349 2.0363 2.0335
29/09/2020 2.0241 2.0255 2.0227
28/09/2020 2.0337 2.0351 2.0323
25/09/2020 2.0249 2.0263 2.0235
24/09/2020 2.0075 2.0089 2.0061
23/09/2020 1.9893 1.9907 1.9879
22/09/2020 2.0018 2.0032 2.0004

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

24 September 2020 – Distribution Policy Update - click here.

Performance

Growth of AUD $100,000
31 October 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.

31 October 2020
Performance 3 Months 6 Months 1 Year Since Inception**
(% PA)
Magellan High Conviction Fund - Class B 4.80% 9.99% 8.04% 11.41%

** 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
01/12/2020 1.2629 1.2638 1.2620
30/11/2020 1.2467 1.2476 1.2458
27/11/2020 1.2567 1.2576 1.2558
26/11/2020 1.2570 1.2579 1.2561
25/11/2020 1.2560 1.2569 1.2551
24/11/2020 1.2582 1.2591 1.2573
23/11/2020 1.2496 1.2505 1.2487
20/11/2020 1.2490 1.2499 1.2481
19/11/2020 1.2493 1.2502 1.2484
18/11/2020 1.2399 1.2408 1.2390
17/11/2020 1.2474 1.2483 1.2465
16/11/2020 1.2516 1.2525 1.2507
13/11/2020 1.2595 1.2604 1.2586
12/11/2020 1.2496 1.2505 1.2487
11/11/2020 1.2516 1.2525 1.2507
10/11/2020 1.2486 1.2495 1.2477
09/11/2020 1.2711 1.2720 1.2702
06/11/2020 1.2812 1.2821 1.2803
05/11/2020 1.2756 1.2765 1.2747
04/11/2020 1.2731 1.2740 1.2722
03/11/2020 1.2432 1.2441 1.2423
02/11/2020 1.2623 1.2632 1.2614
30/10/2020 1.2579 1.2588 1.2570
29/10/2020 1.2770 1.2779 1.2761
28/10/2020 1.2521 1.2530 1.2512
27/10/2020 1.2731 1.2740 1.2722
26/10/2020 1.2619 1.2628 1.2610
23/10/2020 1.2919 1.2928 1.2910
22/10/2020 1.2807 1.2816 1.2798
21/10/2020 1.2788 1.2797 1.2779
20/10/2020 1.2880 1.2889 1.2871
19/10/2020 1.2735 1.2744 1.2726
16/10/2020 1.2889 1.2898 1.2880
15/10/2020 1.2827 1.2836 1.2818
14/10/2020 1.2797 1.2806 1.2788
13/10/2020 1.2905 1.2914 1.2896
12/10/2020 1.2818 1.2827 1.2809
09/10/2020 1.2599 1.2608 1.2590
08/10/2020 1.2605 1.2614 1.2596
07/10/2020 1.2551 1.2560 1.2542
06/10/2020 1.2409 1.2418 1.2400
02/10/2020 1.2362 1.2371 1.2353
01/10/2020 1.2459 1.2468 1.2450
30/09/2020 1.2409 1.2418 1.2400
29/09/2020 1.2337 1.2346 1.2328
28/09/2020 1.2401 1.2410 1.2392
25/09/2020 1.2337 1.2346 1.2328
24/09/2020 1.2282 1.2291 1.2273
23/09/2020 1.2170 1.2179 1.2161
22/09/2020 1.2246 1.2255 1.2237

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

24 September 2020 – Distribution Policy Update - click here.

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).

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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Investing with Magellan gives you easy access to outstanding global companies: Invest in the world's best.

Continuous Disclosure

25 November 2020 - Notification of change to currency hedging strategy

The Magellan High Conviction Fund (“Fund”) has historically exercised its ability to actively hedge the Fund’s foreign currency exposure arising from portfolio investments in foreign markets back to Australian dollars. The objective of this currency hedging strategy was to reduce the impact of foreign currency exposure when the Australian dollar traded outside its historical range.    The portfolio managers of the Fund have determined to change this currency hedging strategy. While retaining the flexibility to reduce the impact of foreign currency exposures associated with identified event risks, the Fund will otherwise adopt an unhedged approach to foreign currency exposures arising from portfolio investments in foreign markets.

 

24 September 2020 - Distribution Policy Update

On 24 September Magellan announced a distribution policy update for the funds for which it acts a responsible entity (‘Fund’ or ‘Funds’).

For each Fund, Magellan intends to target a specific cash distribution yield (“Target Cash Distribution”) and pay distributions semi-annually. Each Fund’s Target Cash Distribution per unit for each semi-annual period will be based on the average of the month-end net asset values per unit applicable to a Fund, or a Fund’s unit class, over a two year rolling period and will be announced at the beginning of each semi-annual distribution period.

This update harmonises the distribution policies across Magellan’s Funds and, Magellan believes, provides investors with greater certainty on the amount of upcoming cash distributions.

For further information and for the Target Cash Distribution per annum for each Fund, please click here.

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

Mainstream Fund Services

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)