The Magellan Global Fund has been issued a “5 IP” rating by Research IP, with a score of 4.43/5.
The Fund aims to achieve attractive risk-adjusted returns over the medium to long-term, while reducing the risk of permanent capital loss. The Fund offers investors an opportunity to invest in a specialised and focused global equity fund. The Fund primarily invests in the securities of companies listed on stock exchanges around the world, but will also have some exposure to cash. The Fund can use foreign exchange contracts to facilitate settlement of stock purchases and to mitigate currency risk on specific investments within the portfolio, but is unhedged.
What is the Fund’s competitive advantage?
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https://platform.research-ip.com/funds/65098877
Research IP says
“The Magellan Global Fund (“the Fund”) invests in outstanding global companies, which is defined as 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.“
“Research IP notes that portfolio performance can be somewhat different to peers and the benchmark over periods less than 12 months. This is largely due to the Manager’s process and investment philosophy, looking for quality companies with long term sustainable franchises, and the active cash position. The Fund’s performance from one out to ten years has been consistently higher than the peer sector average.“
“Research IP notes that the flexible allocation to cash is used and the fund will not remain fully invested through all market cycles. At times the Fund has held 20% cash.“
“The Fund’s funds under management (FUM), is significant at >$11B, and the strategy has over $54B FUM. This requires the Manager to have strong risk controls in place, as position changes are meaningful in dollar terms. Research IP believes the Manager has a strong understanding of the portfolio and ramification of changes to the portfolio.“
“Research IP considers key person risk in Douglass to be relatively high, having significant responsibility as both the Chairman, Chief Investment Officer (CIO), and Portfolio Manager (PM) for this fund, although there is assistance and oversight from other members of the investment team. Douglass is also a very key component of the Fund’s marketing drive and message.“
“Research IP notes that the base fee (1.35%) is high and while better structures can be applied in an individual account, the performance fee (10%) structure is best in class for a pooled fund (with absolute and relative hurdles).”
Research IP, 20 August 2020
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