Hi Plague, the two tables illustrate what happened to the...

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Chella

822 Posts.

148

13/12/21

08:20

Post #: 58246767
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Originally posted by Plague: ↑

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.

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Hi Plague, the two tables illustrate what happened to the markets.
The past is past MFG can’t do anything about the artificial incident to the market now. What it has to do is to compete again perform well.
The monthly numbers I gave in my previous post shows how that underperformance has been reduced gradually. The trend is definitely getting better.
If you look at the markets all over, it is at very high multiples. The economy too which had stimulus boost gradually world over coming back to normal rate of increases. In this environment without that free stimulus it is going to be very difficult show those growth rates indexes enjoyed. It is going to be certain selective stocks which will show growth. Difference between these stocks and the rest is not going to be much different like what we experienced during Covid stimulus boost.
MFG by selecting FAANG,SAP which are high growth and extremely profitable companies with technology and market advantages for at least next 7 to 10 years. Mcd,visa,Starbucks , yummy etc are companies always show growth over long periods, but at subdued rates. The other utilities will be safe and sound with slow growth. As tapering and interest rates start moving up remember there will be lot of these high flying companies struggling big time. Look at the Chinese construction companies which has been staved of that cash stimulus. The new normal environment is not easy without that government stimulus.
In my opinion those monthly number table shows it has moved to low growth environment the businesses are expecting.
VT index has hardly moved from early September to now cumulatively.
According to my calculations in November MGOC has out performed index marginally and month to date in December too. We will see when the actual numbers are out.
There won’t be much other places to put your money when the conditions I outline takes place over next to 6 to 12 months when tapering will be fully completed and Central banks are ready to increase rates.

MFG Price at posting: $29.12 Sentiment: Buy Disclosure: Held
3 Upvote

1 Great analysis

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