Magellan High Conviction Fund

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

  • Unlisted
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  • Alphabet
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  • 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 $542.0 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 31 December 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 December 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 December 2018
Performance 3 Months 6 Months 1 Year 3 Years
(% PA)
5 Years
(% PA)
Since Inception
(% PA)
Magellan High Conviction Fund - 8.80% - 2.75% 3.40% 9.68% 12.43% 14.59%
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
21/01/2019 1.7123 1.7135 1.7111
18/01/2019 1.7094 1.7106 1.7082
17/01/2019 1.6989 1.7001 1.6977
16/01/2019 1.6904 1.6916 1.6892
15/01/2019 1.6903 1.6915 1.6891
14/01/2019 1.6708 1.6720 1.6696
11/01/2019 1.6750 1.6762 1.6738
10/01/2019 1.6814 1.6826 1.6802
09/01/2019 1.6829 1.6841 1.6817
08/01/2019 1.6786 1.6798 1.6774
07/01/2019 1.6627 1.6639 1.6615
04/01/2019 1.6577 1.6589 1.6565
03/01/2019 1.6148 1.6159 1.6137
02/01/2019 1.6555 1.6567 1.6543
31/12/2018 1.6434 1.6446 1.6422
28/12/2018 1.6399 1.6410 1.6388
27/12/2018 1.6469 1.6481 1.6457
24/12/2018 1.5649 1.5660 1.5638
21/12/2018 1.5881 1.5892 1.5870
20/12/2018 1.6251 1.6262 1.6240
19/12/2018 1.6368 1.6379 1.6357
18/12/2018 1.6623 1.6635 1.6611
17/12/2018 1.6491 1.6503 1.6479
14/12/2018 1.6800 1.6812 1.6788
13/12/2018 1.7040 1.7052 1.7028
12/12/2018 1.6947 1.6959 1.6935
11/12/2018 1.6859 1.6871 1.6847
10/12/2018 1.6862 1.6874 1.6850
07/12/2018 1.6732 1.6744 1.6720
06/12/2018 1.7063 1.7075 1.7051
05/12/2018 1.6969 1.6981 1.6957
04/12/2018 1.6854 1.6866 1.6842
03/12/2018 1.7292 1.7304 1.7280
30/11/2018 1.7201 1.7213 1.7189
29/11/2018 1.7103 1.7115 1.7091
28/11/2018 1.7244 1.7256 1.7232
27/11/2018 1.6916 1.6928 1.6904
26/11/2018 1.6858 1.6870 1.6846
23/11/2018 1.6674 1.6686 1.6662
22/11/2018 1.6780 1.6792 1.6768
21/11/2018 1.6761 1.6773 1.6749
20/11/2018 1.6687 1.6699 1.6675
19/11/2018 1.6797 1.6809 1.6785
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

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 December 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 December 2018
Performance 3 Months 6 Months 1 Year Since Inception
(% PA)
Magellan High Conviction Fund - Class B - 8.38% - 2.56% 3.33% 3.87%
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
21/01/2019 1.0420 1.0427 1.0413
18/01/2019 1.0403 1.0410 1.0396
17/01/2019 1.0346 1.0353 1.0339
16/01/2019 1.0299 1.0306 1.0292
15/01/2019 1.0289 1.0296 1.0282
14/01/2019 1.0180 1.0187 1.0173
11/01/2019 1.0199 1.0206 1.0192
10/01/2019 1.0229 1.0236 1.0222
09/01/2019 1.0236 1.0243 1.0229
08/01/2019 1.0214 1.0221 1.0207
07/01/2019 1.0135 1.0142 1.0128
04/01/2019 1.0109 1.0116 1.0102
03/01/2019 0.9862 0.9869 0.9855
02/01/2019 1.0097 1.0104 1.0090
31/12/2018 1.0036 1.0043 1.0029
28/12/2018 1.0014 1.0021 1.0007
27/12/2018 1.0057 1.0064 1.0050
24/12/2018 0.9555 0.9562 0.9548
21/12/2018 0.9696 0.9703 0.9689
20/12/2018 0.9922 0.9929 0.9915
19/12/2018 0.9993 1.0000 0.9986
18/12/2018 1.0149 1.0156 1.0142
17/12/2018 1.0068 1.0075 1.0061
14/12/2018 1.0256 1.0263 1.0249
13/12/2018 1.0402 1.0409 1.0395
12/12/2018 1.0345 1.0352 1.0338
11/12/2018 1.0292 1.0299 1.0285
10/12/2018 1.0293 1.0300 1.0286
07/12/2018 1.0213 1.0220 1.0206
06/12/2018 1.0415 1.0422 1.0408
05/12/2018 1.0357 1.0364 1.0350
04/12/2018 1.0286 1.0293 1.0279
03/12/2018 1.0554 1.0561 1.0547
30/11/2018 1.0498 1.0505 1.0491
29/11/2018 1.0438 1.0445 1.0431
28/11/2018 1.0523 1.0530 1.0516
27/11/2018 1.0323 1.0330 1.0316
26/11/2018 1.0288 1.0295 1.0281
23/11/2018 1.0174 1.0181 1.0167
22/11/2018 1.0239 1.0246 1.0232
21/11/2018 1.0228 1.0235 1.0221
20/11/2018 1.0182 1.0189 1.0175
19/11/2018 1.0249 1.0256 1.0242
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

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

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    Our global fund returns
  • 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)