Ann: MGF Fund Update - February 2021, page-481

All well known points.

The size of MGF is only $2.5B. Magellan's overall FUM is 45B$. What would outflows be on MGF if it merged into open class ETF tomorrow? Maybe $1B?

The current open class ETF MGOC.asx has $7.5B FUM.

The persistent discount on MGF is not worth all of the investor relations drama.

Management would accept a $1B FUM drop given,

1. It is the ethically right thing to do
2. It allows 'trapped' investors to leave (this isn't a healthy relationship in which to build long-term clients)
3. It would have a positive impact of Magellan's now damaged image
4. They wouldn't have to allocate resources to investor relations specific to dealing with client discount concerns
5. The fund could be a target for another manager (eg. Wilson, Regal etc.). Having $1.5B FUM ($2.5B current MGF FUM less the $1B outflow on conversion) is better than zero.

I am certain of either one of the below happening in 2024 (once options expire):
1. The discount will be minimal
2. The fund will convert to an open class ETF (they will just merge MGF with MGOC).

Hotcopper should introduce a bet feature where users can take public, direct positions against each other.