Speaking to InvestorDaily, ASX senior manager for funds and investment products, Marcus Christoe, said the new product would be admitted as a ‘traded’ or ‘quoted’ managed fund on the AQUA platform on 5 March 2015.
“At the moment there have been six previous products that have been admitted as managed funds,” Mr Christoe said.
“BetaShares have five products that are managed funds and Aurora Funds Management has one,” he said.
“Within the subset of products within that managed fund class, [Magellan] are unique in terms of the way they are set up,” Mr Christoe said.
Magellan chief executive Hamish Douglass said the launch had become possible by changes to disclosure requirements.
Existing disclosure rules were adapted by the ASX and ASIC to address concerns about the intellectual property of exchange traded managed fund (ETMF) managers, Mr Douglass said.
“The new disclosure regime involves full disclosure of the fund’s portfolio on a quarterly basis compared with the daily disclosure required for ETFs in most jurisdictions,” he said.
“This is a significant breakthrough and puts Australia at the forefront of the development of ETMFs globally.”
In addition, Magellan will publish a daily net asset value, intra-day indicative net asset value and monthly and quarterly reports for the ETMF.
Mr Douglass said the fund would also include an internal ‘market-making’ function as opposed to using external market-makers.
“The fund will issue the net units bought by investors each day or redeem the net units sold,” he said.
He indicated that Magellan had been in discussions with regulators for “over a year” over the set-up of the new fund.
Mr Douglass said ETMFs are growing in popularity globally, but this structure is not possible in all jurisdictions.
“ETMFs have been regarded as the ‘holy grail’ by fund managers globally who have watched the rapid growth of ETFs but have not been able to participate due to regulatory obstacles,” he said.
“ETMFs are currently less than one per cent of global ETFs, with the vast majority of these being fixed income.”
He pointed to the benefits for ETMFs, including efficient pricing and higher liquidity than traditional managed funds.
“The fund overcomes the administrative complexities of investing in an unlisted fund,” he said.
“It enables them to transact in the same way, and with the same ease, as an ASX listed security.”
The Magellan Global Equities Fund will have the same portfolio as Magellan’s unlisted global fund, which currently holds funds under management of more than AUD$7 billion, Mr Douglass said.
