Gold Managers: Magellan Global Fund

Tim Wong  |  15/07/2016Text size  Decrease  Increase  |  

Tim Wong: Our confidence in Magellan has grown with each passing year. The investment team and the process have been tested over a sustained period of time now. Throughout this they faced a wide variety of market conditions and the team especially has demonstrated great research insight in understanding companies and also in assessing the risks in the market.

Another aspect to consider is that the portfolio manager Hamish Douglass has trained himself to be astute in understanding both micro-level company-specific issues as well as broader, bigger picture macroeconomic issues when looking to build his portfolio.

Given that it's a Gold-rated strategy we do believe that the team is very strong. For starters, it has grown quite dramatically over time and the firm has been able to attract some really top-notch individuals. Such growth can be problematic if it's not managed well, but we believe that Magellan has actually planned really well for their needs.

In addition, we have seen the team evolve over time. They have promoted some key individuals like Dom Giuliano and Nikki Thomas to deputy CIO and head of research, respectively. Those two individuals as well as other senior members make sure that the research process is thoroughly adhered to and implemented appropriately.

A large book of assets can be difficult to manage because it is easier to be more nimble when you are smaller. However, Magellan has traditionally stuck to relatively large high-quality companies when building its portfolio. It's also taken a relatively long-term timeframe when investing. This helps to offset concerns about size hampering how it actually is able to invest. Rising assets also require additional client servicing responsibilities for the investment team to manage. However, we believe Magellan has done a really good job in hiring associated sales, distribution staff, as well as broadening out its investment team to make sure that its key decision makers aren't overly burdened by these responsibilities.

Magellan Global is a relatively concentrated portfolio that takes meaningful stock-specific risks. As a result, mistakes can hurt. So we believe it's best for investors to use this in a supplementary capacity within a broader global equities portfolio.

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