MFG in the BUY zone, page-53

If your an advisor, recommending the Magellan flagship fund is a safe bet. It has brand recognition and the safety that goes with that recognition. Sure there is an excess in performance/management fees, but the adviser is taking a risk if he recommends some obscure CFS or Pendal fund. For example, if you had to recommend one stock, it would be a safe bet to say CBA or BHP, certainly more safe than saying Appen or Afterpay. If your advisor had to buy one stock for you, and it was Apple, and it halved in value, you could accept the loss. But if he/she bought an obscure stock and it halved in value, you would be livid.

Hamish buys the global leaders even at high multiples but avoids the extremes such as Telsa. I think the fund will marginally outperform the benchmark over the long term, underperform in sharp climbs, out perform in sell offs. Especially when the fund is roughly 6-7% cash.

I dont think he is doing anything amazing in terms of stock picking (he is no Michael Burry thats for sure), but he has established this fund and marketed it to the point it is the most popular fund in Australia and a safe choice.

Also Magellan's current multiple in my opinion is between 16-17. Relative to other companies its better value even if it grows its EPS Only marginally. Commbank cant keep going up and Magellan going down. Eventually the cash will flow out of the bank with a 20+ multiple that barely does 10% ROE and into the cheaper priced stock that doesn't need to raise capital for growth.