The Fund offers investors an opportunity to invest in the securities of companies listed on stock exchanges around the world but will also have some exposure to cash and cash equivalents

The investment objective of the Trust is to achieve attractive risk-adjusted returns over the medium to long-term.

Benefits of investing in the Magellan High Conviction Trust (Managed Fund)

Investing in the Trust offers investors a range of benefits, including:

• Access to the Investment Manager’s investment expertise and a professionally managed global equity portfolio;
• Exposure to a concentrated portfolio of high quality global companies weighted towards Magellan’s highest conviction ideas;
• An attractive Target Cash Distribution yield of 3% per annum; and
• Participation in any capital appreciation and income distributions of the Trust

An investment in the Trust may suit investors who are seeking a medium to long-term investment exposure to international equities. 

Significant Features

The Trust offers investors an opportunity to invest in a high conviction global equity fund. The Investment Manager aims to invest in companies that have sustainable competitive advantages which translate into returns on capital in excess of their cost of capital for a sustained period of time. The Investment Manager endeavors to acquire these companies at discounts to their assessed intrinsic value.

The Trust will typically comprise 10 to 20 investments, weighted towards Magellan’s highest conviction ideas, in companies listed on 
global securities exchanges and will also have some exposure to cash.

The Trust may, from time to time, hedge some or all of the capital component of the foreign currency exposure of the Trust arising from investments in overseas markets back to Australian Dollars. 

Investment philosophy

Magellan perceives outstanding companies to be those that are able to sustainably exploit competitive advantages in order to continually earn returns on capital that are materially in excess of their cost of capital.

While Magellan is extremely focused on fundamental business value, it is not a typical 'value' investor. The Magellan High Conviction Trust will invest in companies that have relatively high price-to-earnings and price-to-book multiples, provided that their businesses are outstanding and their shares are trading at an appropriate discount to their assessed intrinsic value. Equities that appear undervalued on the basis of a low price-to-earnings or price-to-book multiples will often prove to be poor investments if the underlying business is fundamentally weak and exhibits poor returns on capital.

Magellan focuses on risk-adjusted returns, rather than benchmark-relative returns. As a result, the Magellan High Conviction Trust investment process is designed to generate an unconstrained, highly-concentrated portfolio of high-quality companies.

How we invest your money

About the Trust

The Trust is a registered managed investment scheme. Units in the Trust have been admitted to quotation on the Securities Exchange under the Securities Exchange Rules. Units in the Trust are able to be traded on the Securities Exchange like any listed security.

The Trust primarily invests in securities of companies listed on stock exchanges around the world. The Trust’s portfolio will typically comprise 10 to 20 stocks at any one time but will also have some exposure to cash.

The Trust may, from time to time, hedge some or all of the capital component of the foreign currency exposure of the Trust arising from investments in overseas markets back to Australian Dollars

Investments held

The Fund primarily invests in the securities of companies listed on stock exchanges around the world, but will also have some exposure to cash & cash equivalents. The Fund can use foreign exchange contracts to facilitate settlement of stock purchases and to mitigate currency risk on specific investments within the portfolio. It is our intention to substantially hedge the capital component of the foreign currency exposure of the Fund arising from investments in overseas markets back to Australian Dollars.

Asset classes and allocation ranges

The Fund's assets are typically invested within the following asset allocation ranges:

• Global listed securities: 50% - 100%
• Cash and cash equivalents: 0% - 50%

Borrowing restrictions

The Trust may borrow against all or part of its investment portfolio, provided that, at the time any new borrowing is entered into, the aggregate of those new borrowings and any pre-existing borrowings does not exceed 5% of the Trust’s gross asset value.