Magellan’s adjusted net profit after tax grew by 20 per cent to $438.3 million. Average GUM was up 26 per cent to $95.5 billion, while management and service fee revenue was up 25 per cent to $591.6 million. Magellan will pay a final dividend of $1.22, with total dividends for 2020 up 16 per cent.
“This is not a time to throw caution into the wind,” said CEO Brett Cairns. “Despite this uneasy reality, Magellan’s business is well positioned, and we do not intend to stand still. Being cautious does not necessarily equate to inaction, particularly given it is in difficult times where many opportunities are born.”
Magellan will also launch the MFG Core Series – comprising the MFG Core International Fund, MFG Core ESG Fund and MFG Core Infrastructure Fund – priced at a management fee of 0.50 per cent in a bid to attract investors seeking lower-cost investment funds. The series will launch as active ETFs on Chi-X.
“This initiative has been under development for a number of years and is consistent with our approach to product development to think deeply about solving problems for our clients and leveraging our core competencies to address their needs,” said Magellan chairman and chief investment officer Hamish Douglass. “The MFG Core Series utilises our research process and aims to offer clients who are seeking [lower-cost] alternatives an attractive investment proposition that leverages Magellan’s expertise.”
There were no staff reductions at Magellan as a result of COVID-19, while bonus reductions were balanced by payout of previously earned, but deferred, bonus payments.
In mid-July, Mr Douglass said that Magellan “had no fear of missing out” on a rally in equity markets, warning that even if a vaccine against COVID-19 were discovered and widely distributed the recovery was not assured.
“We don’t know whether the world is on a bridge to recovery or on a bridge with a cliff at the other end,” Mr Douglass said. “As we don’t know, we will not speculate or gamble with our clients’ money. We understand the limits of our knowledge. We have no fear of missing out.”
