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

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 April 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 April 2019
Performance 3 Months 6 Months 1 Year 3 Years
(% PA)
5 Years
(% PA)
Since Inception
(% PA)
Magellan High Conviction Fund 9.65% 8.57% 18.87% 16.88% 16.18% 16.59%
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
23/05/2019 1.8459 1.8472 1.8446
22/05/2019 1.8708 1.8721 1.8695
21/05/2019 1.8799 1.8812 1.8786
20/05/2019 1.8610 1.8623 1.8597
17/05/2019 1.8856 1.8869 1.8843
16/05/2019 1.8903 1.8916 1.8890
15/05/2019 1.8737 1.8750 1.8724
14/05/2019 1.8439 1.8452 1.8426
13/05/2019 1.8352 1.8365 1.8339
10/05/2019 1.8739 1.8752 1.8726
09/05/2019 1.8732 1.8745 1.8719
08/05/2019 1.8744 1.8757 1.8731
07/05/2019 1.8772 1.8785 1.8759
06/05/2019 1.9059 1.9072 1.9046
03/05/2019 1.9051 1.9064 1.9038
02/05/2019 1.8891 1.8904 1.8878
01/05/2019 1.8906 1.8919 1.8893
30/04/2019 1.9009 1.9022 1.8996
29/04/2019 1.9189 1.9202 1.9176
26/04/2019 1.9139 1.9152 1.9126
24/04/2019 1.8889 1.8902 1.8876
23/04/2019 1.8815 1.8828 1.8802
18/04/2019 1.8482 1.8495 1.8469
17/04/2019 1.8401 1.8414 1.8388
16/04/2019 1.8372 1.8385 1.8359
15/04/2019 1.8492 1.8505 1.8479
12/04/2019 1.8471 1.8484 1.8458
11/04/2019 1.8424 1.8437 1.8411
10/04/2019 1.8456 1.8469 1.8443
09/04/2019 1.8383 1.8396 1.8370
08/04/2019 1.8414 1.8427 1.8401
05/04/2019 1.8443 1.8456 1.8430
04/04/2019 1.8393 1.8406 1.8380
03/04/2019 1.8339 1.8352 1.8326
02/04/2019 1.8348 1.8361 1.8335
01/04/2019 1.8184 1.8197 1.8171
29/03/2019 1.8071 1.8084 1.8058
28/03/2019 1.7993 1.8006 1.7980
27/03/2019 1.7971 1.7984 1.7958
26/03/2019 1.7971 1.7984 1.7958
25/03/2019 1.7994 1.8007 1.7981
22/03/2019 1.8032 1.8045 1.8019
21/03/2019 1.8271 1.8284 1.8258
20/03/2019 1.8070 1.8083 1.8057
19/03/2019 1.7995 1.8008 1.7982
18/03/2019 1.7917 1.7930 1.7904
15/03/2019 1.7908 1.7921 1.7895
14/03/2019 1.7939 1.7952 1.7926
13/03/2019 1.7917 1.7930 1.7904
12/03/2019 1.7850 1.7862 1.7838

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
30 April 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 April 2019
Performance 3 Months 6 Months 1 Year Since Inception
(% PA)
Magellan High Conviction Fund - Class B 10.25% 8.88% 19.52% 13.91%
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
23/05/2019 1.1247 1.1255 1.1239
22/05/2019 1.1414 1.1422 1.1406
21/05/2019 1.1476 1.1484 1.1468
20/05/2019 1.1350 1.1358 1.1342
17/05/2019 1.1515 1.1523 1.1507
16/05/2019 1.1547 1.1555 1.1539
15/05/2019 1.1436 1.1444 1.1428
14/05/2019 1.1236 1.1244 1.1228
13/05/2019 1.1178 1.1186 1.1170
10/05/2019 1.1439 1.1447 1.1431
09/05/2019 1.1434 1.1442 1.1426
08/05/2019 1.1442 1.1450 1.1434
07/05/2019 1.1461 1.1469 1.1453
06/05/2019 1.1654 1.1662 1.1646
03/05/2019 1.1649 1.1657 1.1641
02/05/2019 1.1542 1.1550 1.1534
01/05/2019 1.1553 1.1561 1.1545
30/04/2019 1.1622 1.1630 1.1614
29/04/2019 1.1743 1.1751 1.1735
26/04/2019 1.1710 1.1718 1.1702
24/04/2019 1.1542 1.1550 1.1534
23/04/2019 1.1493 1.1501 1.1485
18/04/2019 1.1270 1.1278 1.1262
17/04/2019 1.1216 1.1224 1.1208
16/04/2019 1.1197 1.1205 1.1189
15/04/2019 1.1278 1.1286 1.1270
12/04/2019 1.1265 1.1273 1.1257
11/04/2019 1.1233 1.1241 1.1225
10/04/2019 1.1255 1.1263 1.1247
09/04/2019 1.1206 1.1214 1.1198
08/04/2019 1.1227 1.1235 1.1219
05/04/2019 1.1247 1.1255 1.1239
04/04/2019 1.1214 1.1222 1.1206
03/04/2019 1.1177 1.1185 1.1169
02/04/2019 1.1183 1.1191 1.1175
01/04/2019 1.1074 1.1082 1.1066
29/03/2019 1.0999 1.1007 1.0991
28/03/2019 1.0947 1.0955 1.0939
27/03/2019 1.0932 1.0940 1.0924
26/03/2019 1.0933 1.0941 1.0925
25/03/2019 1.0949 1.0957 1.0941
22/03/2019 1.0975 1.0983 1.0967
21/03/2019 1.1135 1.1143 1.1127
20/03/2019 1.1001 1.1009 1.0993
19/03/2019 1.0951 1.0959 1.0943
18/03/2019 1.0900 1.0908 1.0892
15/03/2019 1.0894 1.0902 1.0886
14/03/2019 1.0915 1.0923 1.0907
13/03/2019 1.0900 1.0908 1.0892
12/03/2019 1.0856 1.0864 1.0848

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).

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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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)