Magellan Update
Magellan is one of Australia's preeminent International Equities Fund managers.
On Monday morning (7/2/2022) Magellan announced to the ASX that effective immediately, Hamish Douglas, their Chairman, and Head of Investments, will take a medical leave of absence to prioritise his health.
His departure follows a well-documented period of intense pressure and focuses on his professional and personal life.
Chris Mackay, Magellan's co-founder, will step in and oversee the portfolio management of Magellan's global equity retail funds and global equity institutional mandates. Chris is highly experienced with global equities.
In addition, Nikki Thomas has re-joined Magellan as a Co-portfolio manager of Magellan's global equity strategies. Nikki was due to commence in March; however, due to this announcement has brought forward the start date.
Chris Mackay will be working with Deputy CIO Dom Giuliano, Nikki Thomas, Arvid Streimann, and Chris Wheldon in respect of the co-management of the global equity and high conviction retail funds and institutional mandates.
Following this announcement, the share price of the Magellan Financial Group Ltd (MFG.ASX) parent company was down approximately 11% (since regained by mid-week).
It is imperative to highlight the distinction of investment in the parent Magellan Financial Group Ltd shares versus their underlying investment vehicles. For example, their High Conviction Fund (Class B) has returned 12.41% over the 12 months to 31 January 2022, and the Magellan Global Fund has returned 16.81% over the same period. While these numbers have lagged the relevant MSCI world index over that period, they should not be confused with the heavy falls in the parent MFG share price.
I believe there is no reason for short-term concern regarding the underlying assets of the Magellan funds. The understandable question will be over what this means for longer-term performance.
This week's news is a substantial development as we do not have clarity regarding the leave of absence time frame. Any robust investment process should be reviewing the various investment managers on an ongoing basis, and as part of this process, Magellan should also be under review along with the broader international equity asset class in the current quarter. Decisions should not be based on this news in isolation but considered in conjunction with the ongoing performance of the Magellan Funds.
Written by Cris Abellar, THE EXPATRIATE Financial Planning Specialist, Principal Financial Advisor Stanford Brown.
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