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
Recommended for you
The alternative investment manager has signalled its intentions to repackage an existing fund into a second private equity vehicle, targeting both listed and unlisted opportunities.
The acquisition of Mason Stevens by Adamantem Capital has reached completion, as the wealth platform looks to increase investment into its services for Australian wealth practices.
Platinum Asset Management and VanEck have both announced name changes to multiple of their ETFs to clarify their complexity.
Active ETFs are gaining traction in Asia-Pacific as wealth managers seek to blend the low-cost fees of passive with active management.