Global Equities (Broad Cap): Cautious approach yields results for Magellan
A focus on truly outstanding companies is the reason behind the success of Magellan Asset Management’s Global Fund, according to the fund portfolio manager and chairman of Magellan Hamish Douglass.
Magellan is this year’s winner of the Global Equities (Broad Cap) category for its Global Fund.
Douglass said the fund took a very cautious stance based on its view there was likely to be a synchronised global recession. He believes its focus on outstanding companies that would withstand a recession was responsible for the fund’s success.
“We ran, on average, 25 per cent cash — that attributed to part of the return, but three-quarters to 80 per cent [of the] return actually came from where we went on the stocks,” he said. Relative to the market, the fund has performed strongly, down 2.6 per cent to December last year, Douglass said.
Part of the reason for the good return is that the fund went underweight in financials and sold out of nearly every bank investment it held following the collapse of Lehman Brothers last year, taking up a heavy exposure to defensive assets, Douglass said.
Walter Scott (Macquarie Professional Series) was a finalist for its Global Equity Fund.
Adrian Stewart, head of distribution at Macquarie, said the fund was sitting at -6 per cent compared to the market average of -24.5 per cent.
BNP Paribas Investment Partners’ MFS Global Equity Trust was the other finalist in the category.
BNP chief executive Rob Harrison said that consistent managers who had the ability to perform to their objectives was the reason behind the fund’s success.
Recommended for you
Clime Investment Management has welcomed an independent director to its board, which follows a series of recent appointments at the company.
Ethical investment manager Australian Ethical has cited the ongoing challenging market environment for its modest decrease in assets over the latest quarter.
Commentators have said Australian fund managers are less knowledgeable compared with overseas peers when it comes to expanding their range with ETFs and underestimating the competition from passive strategies.
VanEck is to list two ETFs on the ASX next week, one investing in residential mortgage-backed securities and the other in Indian companies.
