The thing I like most about what Hamish has managed to hoodwink...

The thing I like most about what Hamish has managed to hoodwink many of you with is this notion that if markets crash, that somehow the Magellan global strategy will stand against the tide. It's a classic active manager sales strategy, where they put up a sales argument that goes something like this: "You really need an active manager in this market environment because there's so much uncertainty!!!!"

This could not be further from the truth. Or could it? What this theory implies is that:

• Markets don't move as one when there's a significant adverse event. The table below shows that every asset class bar cash and USD was punctured when COVID roiled markets in 2020. NOTHING in equities nor fixed income was spared - not even Uncle Sam's bonds. Yet people think the Magellan portfolio will be... impervious? What?
• Hamish will be able to perfectly call when markets crash, and time going into his max 20% cash allocation for the global strategy. Thus he will reduce drawdowns and look like a hero in your eyes because his strategy experienced a 20% drawdown while the market did 30% more.
• He would then be able to redeploy that cash right at the bottom, and correctly allocate that capital into the companies which will recover the fastest in order to recapture returns or not miss out on the rebound.
• That the S&P 500 is filled largely inferior companies. Yet it is the index that has delivered 20.36% annually over the last 10 years, while Magellan did 16.5% over the same time.
• Hamish and his team are such gifted stock pickers, that none of their portfolio positions will go awry - like, um, Alibaba, and Tencent, and Heinz. A hit to a concentrated portfolio is like breaking a limb whereas one broke company among 500 is hardly a scratch.

For full disclosure, I invest or have invested in Magellan's products including its infrastructure and Aussie equities strategy. But I just find these theories very fascinating because what most of you are doing is basically playing roulette by proxy.

You're punting against the odds that a) Magellan's global equity strategy sees a significant rebound by having a confluence of all of the above of what I said go correctly, so that, B) Magellan regains the trust of its large insto/adviser clients and that, C) It attracts substantial flows which it lost.

Just. Wow.