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$2.21 magellan global fund.

Ann: MGF Fund Update - February 2021, page-133

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sansh1510

1,177 Posts.

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04/06/21

23:43

Post #: 53662435
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Originally posted by Jaythesail: ↑

Arpeebee, by 'misalignment' I am just referring to how the funds under management being captive. In contrast to the open class, investors can vote with their feet by leaving the fund.
If I were a fund manager and wanted to drive the price higher:
Open class: Need to manage the underlying assets, to drive up NAV. Long term value.
Closed class: Underlying NAV still important, but can also market the fund more and talk it up.

I realised that this is somewhat simplified exaggeration but still feel there is enough truth to it to influence behaviour.

Thanks Cutty for your comment - that the gap should decrease as performance increases. I tend to agree.
And SnowSigma, I think technically (i.e. my emotion removed) you are correct. The discount allows me to buy the same assets for cheaper. And the issue of having to then sell at a discount is countered by being a long term buy. i.e. At some point in the future the gap will close and I can reallocate back to open class. I think if MGOC didn't exist I wouldn't have any problem.

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”At some point in the future the gap will close”- like in 2030?

MGF Price at posting: $1.67 Sentiment: None Disclosure: Held
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