Hi
@noomxxThe portfolio tracks the performance to see if the business will turn around. Performance compared to peers is a key pillar to Magellan gaining FUM on a monthly basis, it is simple but effective. An investor in Funds has a list of Fund Managers to choose from, if one is performing poorly they will not invest. Magellan attracted so much money leading into 2020 because they were beating indexes into 2018, then it all collapsed because they didn’t perform over time.
Look at detail of the investments and there is one pick made in the last 12 months that has done well - Chipotle.
FYI, to effectively hedge against Magellan would be to invest in a high performing peer. A business that is growing FUM for investors and knows how to invest in today’s market. There is only one listed on the ASX doing that at the moment.
With performance not doing well on a monthly basis and continuous leakage of FUM, Magellan has the potential to become a value trap for the unwary investor.
Best of Luck
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