Global equities inflows the 'tip of the iceberg'

Global equities inflows the 'tip of the iceberg'

Magellan Financial Group has attracted 12,000 new investors via its two ASX-listed exchange-traded global equities funds – a majority of whom are self-directed.


Speaking to InvestorDaily, Magellan chief executive Hamish Douglass said $623 million in mostly self-directed funds has flowed into the ASX-listed versions of the flagship Magellan Global Fund in just over one year.

Magellan launched an ASX-quoted version of the Magellan Global Fund on 2 March 2015, followed by a currency-hedged version of the fund in August 2015.

The update on the ASX-listed funds came as part of Magellan's full-year result, which saw the fund manager report a net profit after tax of $198 million (up 14 per cent on the previous year) and total funds under management (FUM) of $40.5 billion.

Commenting on the ASX-quoted funds, Mr Douglass said they have attracted something of a new self-directed investor base to Magellan.

"This is a completely new product and pull factor that never existed before, and I would say we’re at the tip of the iceberg," Mr Douglass said.

"In terms of that market of people who are self-directed investors, whether it’s self-directed or investment assets, we’re talking tens of billions of dollars [that could be redirected to global equities]," he said.

Because self-directed investors simply do not invest in unlisted funds, Magellan came up with the ASX-quoted fund last year to attract more of the sector to global equities, he added.

Speaking about the retail arm of the Magellan Financial Group, which has a total of $12 billion in FUM, Mr Douglass said the firm has three main "building blocks".

The first is the fund manager's "deep relationships" with 500 non-aligned advice firms.

Second is the strategic relationships with four of the six institutions (CBA/Colonial First State, Westpac/BT, IOOF and AMP) which run replica versions of the Magellan Global Fund with $2 billion in FUM, Mr Douglass said.

Finally, he pointed to the educational material Magellan publishes to inform investors about the benefits of global equities.

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