Magellan High Conviction Fund

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

  • Unlisted
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Reports

Invest in the world's best

  • Alphabet
  • Apple
  • Facebook
  • Kraft Heinz
  • 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 $574.5 million
Management & Administration 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
0.10%/0.10% 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 August 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 August 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 August 2018
Performance 3 Months 6 Months 1 Year 3 Years
(% PA)
5 Years
(% PA)
Since Inception
(% PA)
Magellan High Conviction Fund 8.21% 10.49% 23.02% 13.99% 17.32% 17.73%
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
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
06/09/2018 1.7806 1.7824 1.7788
05/09/2018 1.7907 1.7925 1.7889
04/09/2018 1.8039 1.8057 1.8021
03/09/2018 1.8075 1.8093 1.8057
31/08/2018 1.8059 1.8077 1.8041
30/08/2018 1.7975 1.7993 1.7957
29/08/2018 1.8015 1.8033 1.7997
28/08/2018 1.7844 1.7862 1.7826
27/08/2018 1.7877 1.7895 1.7859
24/08/2018 1.7790 1.7808 1.7772
23/08/2018 1.7779 1.7797 1.7761
22/08/2018 1.7694 1.7712 1.7676
21/08/2018 1.7644 1.7662 1.7626
20/08/2018 1.7728 1.7746 1.7710
17/08/2018 1.7763 1.7781 1.7745
16/08/2018 1.7701 1.7719 1.7683
15/08/2018 1.7732 1.7750 1.7714
14/08/2018 1.7785 1.7803 1.7767
13/08/2018 1.7655 1.7673 1.7637
10/08/2018 1.7631 1.7649 1.7613
09/08/2018 1.7623 1.7641 1.7605
08/08/2018 1.7589 1.7607 1.7571
07/08/2018 1.7586 1.7604 1.7568
06/08/2018 1.7640 1.7658 1.7622
03/08/2018 1.7599 1.7617 1.7581
02/08/2018 1.7423 1.7440 1.7406
01/08/2018 1.7264 1.7281 1.7247
31/07/2018 1.7202 1.7219 1.7185
30/07/2018 1.7218 1.7235 1.7201
27/07/2018 1.7345 1.7362 1.7328
26/07/2018 1.7462 1.7479 1.7445
25/07/2018 1.7781 1.7799 1.7763
24/07/2018 1.7588 1.7606 1.7570
23/07/2018 1.7548 1.7566 1.7530
20/07/2018 1.7452 1.7469 1.7435
19/07/2018 1.7538 1.7556 1.7520
18/07/2018 1.7519 1.7537 1.7501
17/07/2018 1.7546 1.7564 1.7528

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 August 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 August 2018
Performance 3 Months 6 Months Since Inception
(% PA)
Magellan High Conviction Fund - Class B 7.85% 10.28% 13.96%
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
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
06/09/2018 1.0827 1.0838 1.0816
05/09/2018 1.0881 1.0892 1.0870
04/09/2018 1.0952 1.0963 1.0941
03/09/2018 1.0971 1.0982 1.0960
31/08/2018 1.0961 1.0972 1.0950
30/08/2018 1.0915 1.0926 1.0904
29/08/2018 1.0936 1.0947 1.0925
28/08/2018 1.0843 1.0854 1.0832
27/08/2018 1.0861 1.0872 1.0850
24/08/2018 1.0812 1.0823 1.0801
23/08/2018 1.0805 1.0816 1.0794
22/08/2018 1.0759 1.0770 1.0748
21/08/2018 1.0731 1.0742 1.0720
20/08/2018 1.0777 1.0788 1.0766
17/08/2018 1.0794 1.0805 1.0783
16/08/2018 1.0760 1.0771 1.0749
15/08/2018 1.0776 1.0787 1.0765
14/08/2018 1.0804 1.0815 1.0793
13/08/2018 1.0733 1.0744 1.0722
10/08/2018 1.0719 1.0730 1.0708
09/08/2018 1.0714 1.0725 1.0703
08/08/2018 1.0695 1.0706 1.0684
07/08/2018 1.0693 1.0704 1.0682
06/08/2018 1.0721 1.0732 1.0710
03/08/2018 1.0698 1.0709 1.0687
02/08/2018 1.0602 1.0613 1.0591
01/08/2018 1.0513 1.0524 1.0502
31/07/2018 1.0479 1.0489 1.0469
30/07/2018 1.0487 1.0497 1.0477
27/07/2018 1.0556 1.0567 1.0545
26/07/2018 1.0620 1.0631 1.0609
25/07/2018 1.0792 1.0803 1.0781
24/07/2018 1.0687 1.0698 1.0676
23/07/2018 1.0665 1.0676 1.0654
20/07/2018 1.0612 1.0623 1.0601
19/07/2018 1.0658 1.0669 1.0647
18/07/2018 1.0647 1.0658 1.0636
17/07/2018 1.0661 1.0672 1.0650

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. Read the appropriate Product Disclosure Statement:

    Magellan High Conviction Fund
    Magellan High Conviction Fund Class B

  2. Complete the appropriate Application Form below & CRS Form(s) (if applicable)
    You will be guided by the Application Form as to which CRS form(s) to complete.

    Magellan High Conviction Fund
    Magellan High Conviction Fund Class B

  3. Send application form to Mainstream Fund Services
    Mainstream Fund Services - Unit Registry
    GPO Box 4968
    Sydney NSW 2001

Or
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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)