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 Sustainable Fund (Managed Fund)

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

• Access to the Investment Manager’s investment expertise and a professionally managed global equity portfolio;
• Access to attractive investment opportunities in offshore markets, excluding companies whose activities, as assessed by the Investment Manager, may have wide-ranging detrimental impacts on societies;
• Access to a global equity portfolio with meaningfully lower carbon intensity than broader equity markets;
• Prudent risk management; and
• Participation in any capital appreciation and income distributions of the Fund

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

Significant Features

The Investment Manager aims to invest in companies that have sustained competitive advantages which translate to 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 Investment Manager assesses a company’s ESG risks and opportunities as a core element of its detailed industry and company research. The Investment Manager believes that issues relating to labour standards and to environmental, social and ethical considerations have the potential to affect the business outcomes of the Fund’s investment companies. Accordingly, the Investment Manager reviews labour standards, environmental, social and ethical considerations as part of the risk assessment that is completed 
when reviewing the quality of a company and its risk exposures. The choice of relevant ESG factors for any company will vary by industry and company and are considered by the Investment Manager both prior to investment and on an on-going basis thereafter.

In addition to this assessment, the Investment Manager excludes companies whose activities, as assessed by the Investment Manager, may have wide-ranging detrimental impacts on society. Materiality is normally assessed as greater than 10% of a company’s revenues exposed to the exclusionary activity. If an existing investment is subsequently assessed as meeting the aforementioned exclusionary criteria, the Investment Manager will seek an orderly sale of that investment within three months.

The Investment Manager incorporates a proprietary low-carbon emissions overlay into portfolio construction. Globally agreed climate goals such as those defined in the 2015 Paris Agreement provide the guiding framework for the Fund.

In order to achieve the investment objectives of the Fund, the Responsible Entity may, from time to time, manage the foreign currency exposures of the Fund arising from investments in overseas markets to reduce currency risk in the Fund and may use exchange traded derivatives, in a limited manner, for risk management purposes. As a temporary measure during unusual economic or market conditions, we may take steps to reduce the Fund’s exposure to market risk through the use of futures contracts.

Investment philosophy

While Magellan is extremely focused on fundamental business value, it is not a typical 'value' investor. The Magellan Sustainable Fund 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 Sustainable Fund's investment process is designed to generate an unconstrained, concentrated portfolio of high-quality companies.

How we invest your money

About the Fund

The Magellan Sustainable Fund adopts a long-term investment approach by investing in outstanding companies at attractive prices within a framework that considers Environmental, Social and Governance risks and delivers very low carbon exposure, while exercising a deep understanding of the macroeconomic environment to manage investment risk.

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 and cash equivalents. The Fund can use foreign exchange contracts to manage currency exposure. The Fund may also use exchange traded derivatives, in a limited manner, for risk management purposes. As a temporary measure during unusual economic or market conditions, the Fund may take steps to reduce the Fund’s exposure to market risk through the use of futures contracts.

Asset classes and allocation ranges

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

• Global listed securities: 80% - 100%
• Cash and cash equivalents: 0% - 20%

Borrowing restrictions

The Fund 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 Fund’s gross asset value.