Douglass’ fears over potential Sanders nominee
Magellan fund manager Hamish Douglass has warned he is worried about the possibility of a ‘worrying’ win for Democrat candidate Bernie Sanders and its possible ramifications on markets.
Sanders was vying for the Democratic presidential nominee against former Vice President Joe Biden to compete in the 2020 Presidential election against Donald Trump in November.
A Democratic socialist, Sanders believed in increasing the minimum wage, raising capital gains tax and lowering it for the lower and middle class, increasing the top tax rate from 40% to 65% and breaking up the biggest financial institutions.
Speaking at a Magellan conference in Sydney, Douglass said: “As an investor and fiduciary of other people’s money, I would not want Sanders to win from a market perspective. I am indifferent between Trump or Biden but a win for Sanders would be worrying and deeply inflationary.
“We are watching the election very closely, not just at a presidential level, but to see if we can spot a change in policy direction.”
He said he would ‘have no hesitation’ in raising the Magellan Global fund's cash levels if inflation started to rise. The fund had the ability to raise cash levels to a maximum of 20% and was currently at about 5%- 6%.
The Magellan Global fund had around 44% allocated to the US via companies such as Apple, Facebook and Visa.
Over one year to 28 February, 2020, the Magellan Global fund returned 23%, according to FE Analytics, versus returns of 15% by its MSCI World benchmark.
Performance of Magellan Global versus MSCI World over one year to 28 February, 2020
AUTHOR
Laura Dew
Recommended for you
Clime Investment Management has faced shareholder backlash around “unsatisfactory” financial results and is enacting cost reductions to return the business to profitability by Q1 2025.
Amid a growing appetite for alternatives, investment executives have shared questions advisers should consider when selecting a private markets product compared to their listed counterparts.
Chief executive Maria Lykouras is set to exit JBWere as the bank confirms it is “evolving” its operations for high-net-worth clients.
Bennelong Funds Management chief executive John Burke has told Money Management that the firm is seeking to invest in boutiques in two specific asset classes as it identifies gaps in its product range.
