Magellan High Conviction Fund

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

  • Unlisted
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Invest in the world's best

  • Alphabet
  • Facebook
  • Kraft Heinz
  • Starbucks
  • 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 $580.9 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 2018.

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
31 October 2018

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 2018
Performance 3 Months 6 Months 1 Year 3 Years
(% PA)
5 Years
(% PA)
Since Inception
(% PA)
Magellan High Conviction Fund 1.81% 9.48% 12.75% 11.28% 16.52% 16.45%
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
16/11/2018 1.7166 1.7178 1.7154
15/11/2018 1.7257 1.7269 1.7245
14/11/2018 1.7204 1.7216 1.7192
13/11/2018 1.7263 1.7275 1.7251
12/11/2018 1.7303 1.7315 1.7291
09/11/2018 1.7529 1.7541 1.7517
08/11/2018 1.7553 1.7565 1.7541
07/11/2018 1.7610 1.7622 1.7598
06/11/2018 1.7364 1.7376 1.7352
05/11/2018 1.7240 1.7252 1.7228
02/11/2018 1.7266 1.7283 1.7249
01/11/2018 1.7455 1.7472 1.7438
31/10/2018 1.7514 1.7532 1.7496
30/10/2018 1.7239 1.7256 1.7222
29/10/2018 1.7093 1.7110 1.7076
26/10/2018 1.7274 1.7291 1.7257
25/10/2018 1.7542 1.7560 1.7524
24/10/2018 1.7242 1.7259 1.7225
23/10/2018 1.7687 1.7705 1.7669
22/10/2018 1.7660 1.7678 1.7642
19/10/2018 1.7632 1.7650 1.7614
18/10/2018 1.7578 1.7596 1.7560
17/10/2018 1.7841 1.7859 1.7823
16/10/2018 1.7777 1.7795 1.7759
15/10/2018 1.7468 1.7485 1.7451
12/10/2018 1.7566 1.7584 1.7548
11/10/2018 1.7319 1.7336 1.7302
10/10/2018 1.7500 1.7518 1.7482
09/10/2018 1.7986 1.8004 1.7968
08/10/2018 1.7989 1.8007 1.7971
05/10/2018 1.7985 1.8003 1.7967
04/10/2018 1.8022 1.8040 1.8004
03/10/2018 1.8065 1.8083 1.8047
02/10/2018 1.7968 1.7986 1.7950
28/09/2018 1.8025 1.8043 1.8007
27/09/2018 1.8089 1.8107 1.8071
26/09/2018 1.7956 1.7974 1.7938
25/09/2018 1.7971 1.7989 1.7953
24/09/2018 1.7926 1.7944 1.7908
21/09/2018 1.7904 1.7922 1.7886
20/09/2018 1.7963 1.7981 1.7945
19/09/2018 1.7824 1.7842 1.7806
18/09/2018 1.7836 1.7854 1.7818
17/09/2018 1.7837 1.7855 1.7819
14/09/2018 1.7964 1.7982 1.7946
13/09/2018 1.7975 1.7993 1.7957
12/09/2018 1.7999 1.8017 1.7981
11/09/2018 1.8111 1.8129 1.8093
10/09/2018 1.7970 1.7988 1.7952
07/09/2018 1.7874 1.7892 1.7856

Distribution history

Date Distribution per unit Reinvestment price  
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
31 October 2018

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 2018
Performance 3 Months 6 Months Since Inception
(% PA)
Magellan High Conviction Fund - Class B 1.89% 9.77% 11.01%
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
16/11/2018 1.0473 1.0480 1.0466
15/11/2018 1.0529 1.0536 1.0522
14/11/2018 1.0496 1.0503 1.0489
13/11/2018 1.0532 1.0539 1.0525
12/11/2018 1.0556 1.0563 1.0549
09/11/2018 1.0689 1.0696 1.0682
08/11/2018 1.0703 1.0710 1.0696
07/11/2018 1.0736 1.0744 1.0728
06/11/2018 1.0592 1.0599 1.0585
05/11/2018 1.0516 1.0523 1.0509
02/11/2018 1.0533 1.0544 1.0522
01/11/2018 1.0645 1.0656 1.0634
31/10/2018 1.0678 1.0689 1.0667
30/10/2018 1.0515 1.0526 1.0504
29/10/2018 1.0426 1.0436 1.0416
26/10/2018 1.0536 1.0547 1.0525
25/10/2018 1.0692 1.0703 1.0681
24/10/2018 1.0516 1.0527 1.0505
23/10/2018 1.0777 1.0788 1.0766
22/10/2018 1.0761 1.0772 1.0750
19/10/2018 1.0743 1.0754 1.0732
18/10/2018 1.0712 1.0723 1.0701
17/10/2018 1.0864 1.0875 1.0853
16/10/2018 1.0826 1.0837 1.0815
15/10/2018 1.0647 1.0658 1.0636
12/10/2018 1.0703 1.0714 1.0692
11/10/2018 1.0561 1.0572 1.0550
10/10/2018 1.0664 1.0675 1.0653
09/10/2018 1.0942 1.0953 1.0931
08/10/2018 1.0943 1.0954 1.0932
05/10/2018 1.0940 1.0951 1.0929
04/10/2018 1.0958 1.0969 1.0947
03/10/2018 1.0981 1.0992 1.0970
02/10/2018 1.0928 1.0939 1.0917
28/09/2018 1.0957 1.0968 1.0946
27/09/2018 1.0991 1.1002 1.0980
26/09/2018 1.0918 1.0929 1.0907
25/09/2018 1.0926 1.0937 1.0915
24/09/2018 1.0901 1.0912 1.0890
21/09/2018 1.0888 1.0899 1.0877
20/09/2018 1.0919 1.0930 1.0908
19/09/2018 1.0844 1.0855 1.0833
18/09/2018 1.0849 1.0860 1.0838
17/09/2018 1.0850 1.0861 1.0839
14/09/2018 1.0917 1.0928 1.0906
13/09/2018 1.0922 1.0933 1.0911
12/09/2018 1.0935 1.0946 1.0924
11/09/2018 1.0995 1.1006 1.0984
10/09/2018 1.0918 1.0929 1.0907
07/09/2018 1.0865 1.0876 1.0854

Distribution history

Date Distribution per unit Reinvestment price  
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).

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  • Delivering outstanding results

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  • Why global?

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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)