Magellan is a one trick pony fund manager. They have been and continue to be overweight Tech. They have some consumer brands, but the FUM was mainly gathered through false advertising (we are like Buffett, we protect the downside, etc). Magellan is continuing to pay the price for promises they couldn’t keep.
GQG is more an all weather equity portfolio manager, March 2020 moved to overweight Tech and now this time funds are overweight Energy mainly.
The fund performance issues aren’t limited to Magellan. Different strategies that are not agnostic are suffering, ARK in US, Hyperion in Australia, etc.
Another thing impacting Fund Managers other than GQG is portfolio rotation. Psychologically it is difficult, Fund Analysts and Portfolio Managers have invested all this time in selecting a stock, why would they sell quickly? GQG is ruthless on this, no ego (as you said humble). Magellan should have sold BABA, Netflix, FB, etc as soon they fell 5% from highs - this is easier said than done, however GQG has clearly demonstrated that they can do this at the right time. I suspect being US based helps in this instance as most US Funds had exited BABa a long time before Magellan sold.
Similarly, Passive Index Funds are not protecting investors capital. Investors are losing money and the one key tenant of Active Management should always be to protect capital through better stock selection. GQG demonstrates the better performance expected of an Active Manager, there are a few similar in the US and is very rare in Australia.
In all, a good quality growth investment that should see us improve our retirement funds over the longer term.
Best of Luck Lost
GQG Price at posting:
$1.74 Sentiment: Buy Disclosure: Held
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