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 manager Structure Fund size **
Hamish Douglass
Hamish Douglass
Global Equity Fund, $AUD AUD $512.1 million
Management & Administration fee Distribution Frequency ARSN
1.50% p.a. Annually 164 285 947
Buy / Sell Spread APIR Code
0.10%/0.10% MGE0005AU
Performance Fee

10.0% of the excess return of the units of the Fund above the Absolute Return performance hurdle (10% per annum). Additionally, the Performance Fees are subject to a high water mark.

All management costs described above are inclusive of the estimated net effect of GST.
** As at 30 June 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
30 June 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.

30 June 2018
Performance 3 Months 6 Months 1 Year 3 Years
(% PA)
5 Years
(% PA)
Since Inception
(% PA)
Magellan High Conviction Fund 6.74% 6.32% 18.99% 12.38% 16.81% 16.81%
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
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
16/07/2018 1.7411 1.7428 1.7394
13/07/2018 1.7457 1.7474 1.7440
12/07/2018 1.7408 1.7425 1.7391
11/07/2018 1.7267 1.7284 1.7250
10/07/2018 1.7230 1.7247 1.7213
09/07/2018 1.7196 1.7213 1.7179
06/07/2018 1.7128 1.7145 1.7111
05/07/2018 1.7018 1.7035 1.7001
04/07/2018 1.6871 1.6888 1.6854
03/07/2018 1.6873 1.6890 1.6856
02/07/2018 1.7055 1.7072 1.7038
30/06/2018 (ex) 1.6903 1.6920 1.6886
30/06/2018 1.8338 1.8356 1.8320
29/06/2018 1.8338 1.8356 1.8320
28/06/2018 1.8378 1.8396 1.8360
27/06/2018 1.8321 1.8339 1.8303
26/06/2018 1.8460 1.8478 1.8442
25/06/2018 1.8397 1.8415 1.8379
22/06/2018 1.8598 1.8617 1.8579
21/06/2018 1.8619 1.8638 1.8600
20/06/2018 1.8712 1.8731 1.8693
19/06/2018 1.8793 1.8812 1.8774
18/06/2018 1.8763 1.8782 1.8744
15/06/2018 1.8660 1.8679 1.8641
14/06/2018 1.8545 1.8564 1.8526
13/06/2018 1.8402 1.8420 1.8384
12/06/2018 1.8437 1.8455 1.8419
08/06/2018 1.8335 1.8353 1.8317
07/06/2018 1.8263 1.8281 1.8245
06/06/2018 1.8298 1.8316 1.8280
05/06/2018 1.8294 1.8312 1.8276
04/06/2018 1.8270 1.8288 1.8252
01/06/2018 1.8277 1.8295 1.8259
31/05/2018 1.8107 1.8125 1.8089
30/05/2018 1.8159 1.8177 1.8141
29/05/2018 1.8055 1.8073 1.8037
28/05/2018 1.8143 1.8161 1.8125
25/05/2018 1.8135 1.8153 1.8117
24/05/2018 1.8118 1.8136 1.8100
23/05/2018 1.8148 1.8166 1.8130
22/05/2018 1.7879 1.7897 1.7861
21/05/2018 1.7978 1.7996 1.7960
18/05/2018 1.7925 1.7943 1.7907
17/05/2018 1.8009 1.8027 1.7991
16/05/2018 1.8076 1.8094 1.8058
15/05/2018 1.8078 1.8096 1.8060
14/05/2018 1.8074 1.8092 1.8056
  
Date Net Asset Value Entry Exit
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
16/07/2018 1.0588 1.0599 1.0577
13/07/2018 1.0611 1.0622 1.0600
12/07/2018 1.0583 1.0594 1.0572
11/07/2018 1.0506 1.0517 1.0495
10/07/2018 1.0485 1.0495 1.0475
09/07/2018 1.0466 1.0476 1.0456
06/07/2018 1.0428 1.0438 1.0418
05/07/2018 1.0368 1.0378 1.0358
04/07/2018 1.0284 1.0294 1.0274
03/07/2018 1.0285 1.0295 1.0275
02/07/2018 1.0386 1.0396 1.0376
30/06/2018 (ex) 1.0303 1.0313 1.0293
30/06/2018 1.0712 1.0723 1.0701
29/06/2018 1.0712 1.0723 1.0701
28/06/2018 1.0738 1.0749 1.0727
27/06/2018 1.0701 1.0712 1.0690
26/06/2018 1.0789 1.0800 1.0778
25/06/2018 1.0751 1.0762 1.0740
22/06/2018 1.0858 1.0869 1.0847
21/06/2018 1.0869 1.0880 1.0858
20/06/2018 1.0917 1.0928 1.0906
19/06/2018 1.0958 1.0969 1.0947
18/06/2018 1.0942 1.0953 1.0931
15/06/2018 1.0887 1.0898 1.0876
14/06/2018 1.0827 1.0838 1.0816
13/06/2018 1.0752 1.0763 1.0741
12/06/2018 1.0770 1.0781 1.0759
08/06/2018 1.0714 1.0725 1.0703
07/06/2018 1.0667 1.0678 1.0656
06/06/2018 1.0691 1.0702 1.0680
05/06/2018 1.0687 1.0698 1.0676
04/06/2018 1.0672 1.0683 1.0661
01/06/2018 1.0677 1.0688 1.0666
31/05/2018 1.0567 1.0578 1.0556
30/05/2018 1.0601 1.0612 1.0590
29/05/2018 1.0534 1.0545 1.0523
28/05/2018 1.0591 1.0602 1.0580
25/05/2018 1.0586 1.0597 1.0575
24/05/2018 1.0575 1.0586 1.0564
23/05/2018 1.0594 1.0605 1.0583
22/05/2018 1.0423 1.0433 1.0413
21/05/2018 1.0485 1.0495 1.0475
18/05/2018 1.0450 1.0460 1.0440
17/05/2018 1.0505 1.0516 1.0494
16/05/2018 1.0548 1.0559 1.0537
15/05/2018 1.0550 1.0561 1.0539
14/05/2018 1.0547 1.0558 1.0536

Distribution history

Date Distribution per unit Reinvestment price  
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

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.

    To receive an Application Form for the Magellan High Conviction Fund – Class B Units, please email clientservices@magellangroup.com.au

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

Or
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FAQs

A minimum initial investment of $10,000 and minimum subsequent investment of $5,000 applies to each of Magellan’s unlisted funds.

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)