Ann: Funds Under Management - November 2021, page-134

Hi @Chella

You make a great point, this past year has been their worst relative year in their history, prior to the last year magellan has had a great run. Magellan's global portfolio which I posted a few weeks ago is very solid (with exception of Alibaba), however due to their cash weighting and defensive positioning (McDonalds, Pepsi, Nestle, Procter and gamble ect.) and with high fees (1.35% + 10% performance fees) it is difficult to see them outperforming the market unless there is a significant market decline. Even with the covid drawdown in March 2020, magellan failed to adapt to the vaccine data and position towards cyclicals, looking over a 3 year period the downside protection is invisible.

To illustrate,

MGOC performance following covid drawdown (Was trading as MGE before restructuring in November 2020)

Financial advisors and institutions were flowing money into magellan, strong outperformance, all was well.


April 2020 FUM update (following months FUM update from MFG).




Fast forward to last months report. October 2021 (November will be available next week I believe).


Financial advisors and institutions seeing this have started to rotate money to better managers, very hard to justify keeping money with an underperforming manager especially considering the fees they charge.




I'd hate to think what the next quarters flows will be considering the recent media attention, combined with continued weak performance...

Performance is to fund managers what oxygen is to us. Without it you won't survive.


Cheers,
Plague.