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Update on Magellan products by Zenith

by | Feb 15, 2022 | Latest news

Zenith client release – Magellan Asset Management

Update on Magellan products

Following our decision to place Magellan Asset Management’s (Magellan) global equities suite of products under review, Zenith has met with key executives and senior investment personnel to discuss the implications of Hamish Douglass’ indefinite medical leave of absence.
 
Chris Mackay, co-founder of Magellan, will oversee the management of Magellan’s retail and institutional global equities mandates. Mackay will co-manage the following products with Nikki Thomas and Arvid Streimann:

  • Magellan Global Equities Fund (Currency Hedged) (ASX: MHG)
  • Magellan Global Fund (Hedged) (APIR: MGE0007AU)
  • Magellan Global Fund (Open Class) (APIR: MGE0001AU)
  • Magellan Global Fund (Open Class) (Quoted) (ASX: MGOC)
  • Magellan Global Fund Closed Class (ASX: MGF)

Thomas will be returning after having previously worked as an analyst, portfolio manager and head of research at Magellan from 2007 until 2017, when she left to work as portfolio manager of the Alphinity Global Equity Fund.
 
Streimann joined Magellan in 2014 and was appointed head of macro research at Magellan in 2017. Streimann has been co-portfolio manager of the global equities strategies since 2020.
 
In addition, Mackay will assume portfolio management responsibilities of the following products with Chris Wheldon:

  • Magellan High Conviction Fund – Class A (APIR: MGE0005AU)
  • Magellan High Conviction Fund – Class B (APIR: MGE9885AU)
  • Magellan High Conviction Trust (ASX: MHHT)

Wheldon has over 19 years investment experience, having joined Magellan in 2007. He has been a portfolio manager at Magellan since 2018.
 
The portfolio management responsibilities of the following products remain unchanged:

  • Magellan Sustainable Fund (APIR: MGE4669AU)
  • Magellan Sustainable Fund (Quoted) (ASX: MSUF)
  • MFG Core ESG Fund (APIR: MGE8722AU)
  • MFG Core ESG Fund (Quoted) (ASX: MCSE)
  • MFG Core International Fund (APIR: MGE3851AU)
  • MFG Core International Fund (Quoted) (ASX: MCSG)

As it relates to Magellan’s staff retention mechanisms which have been reported in the press of late, including staff equity plans and loan initiatives, Zenith understands that these are currently under review. However, no immediate changes have been communicated to date.

Zenith’s view

Zenith believes Mackay is an impressive investor who is supported by a well-resourced and experienced investment team, as such we retain comfort that Mackay is appropriately suited to take on the aforementioned roles. Zenith also maintains confidence in Thomas, Streimann and Wheldon as portfolio managers, having met with and reviewed each of them on several occasions.
 
However, given our high regard for Douglass, we consider his leave of absence to be a material loss for Magellan’s global equities suite and overall business.
 
In addition, we will closely monitor the actions and potential movements of the executive and investment team going forward. Specifically, we will focus on the appointment of the CEO, staff equity plans and initiatives.
 
Whilst business stability continues to be an area of focus, Magellan remains a highly profitable business with $A 93.5 billion in FUM as at 31 January 2022.

Although Zenith retains strong conviction in the underlying products, we have prudently made the following ratings changes:

Affected funds

NameAPIRPrevious ratingNew ratingRI classification
Magellan Global Equities Fund (Currency Hedged)ASX:MHGHighly RecommendedRecommendedIntegrated
Magellan Global Fund (Hedged)MGE0007AUHighly RecommendedRecommendedIntegrated
Magellan Global Fund (Open Class)MGE0001AUHighly RecommendedRecommendedIntegrated
Magellan Global Fund (Open Class) (Quoted)ASX:MGOCHighly RecommendedRecommendedIntegrated
Magellan Global Fund Closed ClassASX:MGFHighly RecommendedRecommendedIntegrated
Magellan High Conviction Fund – Class AMGE0005AURecommendedRecommendedIntegrated
Magellan High Conviction Fund – Class BMGE9885AURecommendedRecommendedIntegrated
Magellan High Conviction TrustASX:MHHTRecommendedRecommendedIntegrated
Magellan Sustainable FundMGE4669AURecommendedRecommendedIntegrated
Magellan Sustainable Fund (Quoted)CXA:MSUFRecommendedRecommendedIntegrated
MFG Core ESG FundMGE8722AURecommendedRecommendedIntegrated
MFG Core ESG Fund (Quoted)CXA:MCSERecommendedRecommendedIntegrated
MFG Core International FundMGE3851AURecommendedRecommendedIntegrated
MFG Core International Fund (Quoted)CXA:MCSGRecommendedRecommendedIntegrated

If you have any questions or would like further information about this release, please call Greg Ryan on 0419 144 155.

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ClockTower Financial Planning ABN 98 625 085 743 Level 11, 65 York Street, Sydney, NSW 2000 Corporate Authorised Representative No. 126314. Greg Ryan Corporate Authorised Representative No. 1006415 of Futuro Financial Services AFSL No. 238478 ABN 30 085 870 015 Level 6, 200 Creek Street, Brisbane QLD 4001 This information may be regarded as general advice. That is, your personal objectives, needs or financial situations were not taken into account when preparing this information. Accordingly, you should consider the appropriateness of any general advice we have given you, having regard to your own objectives, financial situation and needs before acting on it.