To achieve attractive risk-adjusted investment returns over the medium to long term.
To preserve capital and reduce downside volatility.
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 Global Equity Strategy 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 Global Equity Strategy’s investment process is designed to generate an unconstrained, concentrated portfolio of high-quality companies.
Magellan believes that an appropriately structured portfolio of 20 to 40 investments can provide sufficient diversification to ensure that investors are not overly correlated to any single company, industry-specific or macroeconomic risk.
The Magellan Global strategy typically invests in companies with market capitalizations in excess of $US 10 billion.
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 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.
Separately Managed Account
Investors can access the MFG Global Equity Fund via a separately managed account (subject to conditions being met) or via the following investment vehicle.
MFG Global Equity Fund
MFG Asset Management acts as the sub-adviser to the Frontier MFG Global Equity Fund. For more information regarding this fund please contact Frontier Funds.
|Global Equity Annual Investor Report – June 2023
|Global Equity Annual Investor Report – June 2022
|Global Equity Annual Investor Report – June 2021
|Global Equity Annual Investor Report – June 2020
|Global Equity Annual Investor Report – June 2019
|Global Equity Annual Investor Report – June 2018
|Global Equity Annual Investor Report – June 2017
|Global Equity Annual Investor Report – June 2016
|Global Equity Half Yearly Investor Report – December 2015
|Global Equity Yearly Investor Report – June 2015
|Global Equity Half Yearly Investor Report – December 2014