MFF - MFF Capital Investments

[nikkothescorpio]

Hi,

Just wondered if anyone has any thoughts on this LIC. They listed in DEC 2006 at $1 and are currently around $0.80 per unit.

Headed up by a couple of very high profile lads, the former head of one of UBS's big areas and another similar guy - had a lot of 'name' money being invested with them - including James Packer, the Turnbulls and a number of others.

COMPANY HOMEPAGE

My interest in them revolves around having a conservative foreign investment exposure in my portfolio - apparently these guys are trying to have a 'Value-Buffett' type approach to their investment selections.

NTA is around $1 or so.

Had a fairly poor 1st year due to the $AUS and a few other things.

But interested to see if anyone else has any thoughts on them at all.

Much thanks in advance

 

[Rainmaker2000]

Re: MFF - Magellan Flagship Fund Limited

Interesting pickup......I'm no fan of LIC but when they are especially cheap......I can't add much just to say that my Fav. investor Peter Lynch made Magellan famous with his adept combination of value and growth investing.......'One up on Wall Street'......one of the most insightful reads ever

 

[shinobi346]

Re: MFF - Magellan Flagship Fund Limited

Hi,

Just wondered if anyone has any thoughts on this LIC. They listed in DEC 2006 at $1 and are currently around $0.80 per unit.

Headed up by a couple of very high profile lads, the former head of one of UBS's big areas and another similar guy - had a lot of 'name' money being invested with them - including James Packer, the Turnbulls and a number of others.

COMPANY HOMEPAGE

My interest in them revolves around having a conservative foreign investment exposure in my portfolio - apparently these guys are trying to have a 'Value-Buffett' type approach to their investment selections.

NTA is around $1 or so.

Had a fairly poor 1st year due to the $AUS and a few other things.

But interested to see if anyone else has any thoughts on them at all.

Much thanks in advance

Thanks for the heads up. Always good to be made aware of something you might have missed otherwise.

My initial concern is, if the currency exchange rate has held the performance back, what steps have been taken to mitigate this as most analysts expect our dollar to stay high? This sounds like a medium-long termish type of fund. (nothing wrong with that)

 

[nikkothescorpio]

Re: MFF - Magellan Flagship Fund

Cheers for the replies.

Yes well I too am not a huge fan of LIC's but would like some kind of OS exposure in my portfolio and can't be stuffed buying direct into OS shares - on top of the domestic ones!

I looked at these guys and to a degree thought well if there is 'smart money' heading into them then maybe there's something there.....also their value investing approach is appealing - even though their first year results were anything BUT.

20% down on the SP and no dividend paid. I can imagine that James Packer and the Turnbulls would have been making one or two ph calls for reassurance.

Have seen a number of thngs recently too with the average PE ratios of Australian top stocks vs rest of the world and we're well above them now - which may lead people to believe that if you are looking for VALUE then you can find it OS more easily.

This was also reinforced by how we bounced back much further much faster after the recent correction.

Anyway I will keep an eye on them - am also quite happy to keep the 50% or so of my portfolio in cash at present...so watch this space.

 

[cbacamden]

Re: MFF - Magellan Flagship Fund

Everytime these fall im buying more. They are well under Net Assets, and while I dont expect huge agains I think they are a good thing to be in a portfolio.

I recon its good to see they are currently buying back their shares. Can only make their asset position better

 

[Bluebeard]

Re: MFF - Magellan Flagship Fund

This company continues to buy back its own shares. They seem to have put together an international portfolio with decent names ie. Coca Cola, Proctor & Gamble, Unilever, Google, Nestle, Pepsico, Visa, Mastercard etc.

Trading now around 59cents. And judging by there announcements to the ASX they are trading at a discount to NTA. Im interested in these guys as a long term investment. And having exposure to the big names listed above cant be a bad thing IMHO. The AUD is a problem, and could continue to be a drag on performance but in the bigger scheme of things, this is an interesting way of getting international exposure into your portfolio and longer term the AUD may come back anyway to more reasonable levels.

Note: I hold MFF.

 

[catfish]

Re: MFF - Magellan Flagship Fund

Can someone explain why MFF trades at such a discount to NTA? Price has caught up I little recently although discount remains. I understand why a regular company may trade at a discount to NTA, but MFF releases weekly NTA announcements. Market is well informed and still chooses to pay less.

Thanks

 

[RottenValue]

Re: MFF - Magellan Flagship Fund

Can someone explain why MFF trades at such a PREMIUM to NTA? NTA has caught up I little recently although PREMIUM remains. I understand why a regular company may trade at a PREMIUM to NTA, but MFF releases weekly NTA announcements. Market is well informed and still chooses to pay MORE.



Couldn't resist - market swings and roundabouts.

 

[Valued]

Re: MFF - Magellan Flagship Fund

I don't know anything about this company but a company's NTA is a poor way of valuing it unless you suspect it may be going insolvent. Some companies have a very high NTA because they have so many assets but are not worth much at all. Reasons may be that the assets may not be able to be sold easily or at all on the open market, they have so many shares that the assets are split between too many shareholders, the company makes a poor return on those assets or the company has a lot of debt etc. A company may be worth a lot with very few assets e.g. a company that provides professional services such as a law firm. In a lot of cases, a company's assets arn't linked directly to their earnings power.

 

[rcm617]

Re: MFF - Magellan Flagship Fund

Can someone explain why MFF trades at such a discount to NTA? Price has caught up I little recently although discount remains. I understand why a regular company may trade at a discount to NTA, but MFF releases weekly NTA announcements. Market is well informed and still chooses to pay less.

Thanks

Can someone explain why MFF trades at such a PREMIUM to NTA? NTA has caught up I little recently although PREMIUM remains. I understand why a regular company may trade at a PREMIUM to NTA, but MFF releases weekly NTA announcements. Market is well informed and still chooses to pay MORE.



Couldn't resist - market swings and roundabouts.

LOL, and who said the market was always right. Nobody wants to buy when the shares are cheap, but everyman and his dog jump on when they become expensive.

 

[piggybank]

Re: MFF - Magellan Flagship Fund

Important Information for Macquarie Group Limited (ASX:MQG) Shareholders

13 December 2013

On Thursday, 12 December 2013, Macquarie Group Limited (MQG) announced that it has received shareholder approval to undertake a consolidation of its shares and distribution of Sydney Airport stapled securities (SYD).

The consolidation will involve the conversion of every one share into 0.9438 ordinary shares in the company (shares will be rounded up to the next whole number). The distribution of shares will involve a distribution of 1 Sydney Airport stapled security (SYD) for every MQG share held on the record date as at 7pm (AEDT) Monday, 20 December 2013. Eligible shareholders will be allocated SYD securities on Monday, 13 January 2014. From Monday, 16 December 2013, MQG shares commence trading on a deferred settlement basis (ASX code: MQGDA). On Thursday, 2 January 2014 normal T+3 trading (Three ASX settlement days after the trade) will resume (ASX Code: MQG). For further details, please refer to the Company's announcement lodged with ASX.

 

[piggybank]

Re: MFF - Magellan Flagship Fund

 

[coolcup]

Re: MFF - Magellan Flagship Fund

Important Information for Macquarie Group Limited (ASX:MQG) Shareholders

13 December 2013

On Thursday, 12 December 2013, Macquarie Group Limited (MQG) announced that it has received shareholder approval to undertake a consolidation of its shares and distribution of Sydney Airport stapled securities (SYD).

The consolidation will involve the conversion of every one share into 0.9438 ordinary shares in the company (shares will be rounded up to the next whole number). The distribution of shares will involve a distribution of 1 Sydney Airport stapled security (SYD) for every MQG share held on the record date as at 7pm (AEDT) Monday, 20 December 2013. Eligible shareholders will be allocated SYD securities on Monday, 13 January 2014. From Monday, 16 December 2013, MQG shares commence trading on a deferred settlement basis (ASX code: MQGDA). On Thursday, 2 January 2014 normal T+3 trading (Three ASX settlement days after the trade) will resume (ASX Code: MQG). For further details, please refer to the Company's announcement lodged with ASX.

What is the relevance of this to MFF?

 

[piggybank]

Re: MFF - Magellan Flagship Fund

 

[System]

On November 4th, 2016, Magellan Flagship Fund Limited changed its name to MFF Capital Investments Limited.

 

[rcm617]

Interesting that Chris Mackay has bought just short of one and a half million shares and over one and a half million options in the last two months. Must be confident of the US market going up or very pessimistic on the $Aus.

 

[kahuna1]

well ... up at its peaks 50% .... from the last post, one might say the call was correct.

I note, Chris adds and adds and is the largest shareholder by far. He also is the second largest holder of MFG shares the Magellan now managing 70 odd billion. Over the years, in fact now over 10, if one strips out the bonus shares and options at vast discounts to the NTA this fund has outperformed the index by a fair margin ... 5-8% each and every year for the last decade.

Not that this is correctly worked out by Morningstar .... who well is hopeless but the two other fund followers who cover Listed investments BOTH have this correctly covered.

Given from public announcements weekly of NTA, monthly of actual holdings and NTA ... one has a very good idea via commentary of what one of the LEADING .... GLOBALLY fund mangers is thinking. He is, despite the drubbing the USA got past few months into Dec not down MUCH v the index having a cow around 8%. I note end of Dec 2018, he is leveraged and buying these dips.

He has, unlike 99.99% of the 10,000 other fund mangers in this sector supreme discipline and turning out NOISE and extreme capital management that, well, built MFG and its fund and now he owns, not the 61.5 million shares he did in April 2018, but as of last ... 63.2 million and has been adding all during 2018. There are 541 million shares so ... a mere 12% or so . Similar ideas with MFG and putting their money where their ... interest were, and in this case, fairly low pay and no bonus structure if he beats the market, given he already has a large pile their .... one could do a lot worse.

So of the 10,000 pr so funds, listed and unlisted with similar long only ... and decent discretion, less than HALF after costs even hit the index. Sure second half to Dec will NOT be a positive one given the shellacking the USA side got, but, its tiny v the index and since then, of course ... well the magic rallies off the lows and the AUD had a cow for a day below 70 cents. how many of the 5,000 beat the index evne by any margin year in year out ? less than 20% . Ones that exceed it by 2% are well under 5% and 4% 1% so a mere 100 out of 10,000. Not many if any ... I could find with, well 5% plus, those I did were highly leveraged ... 100% or so ... and that was only one which still was beaten ... by this guy.

Got to love him ..

 

[rcm617]

Another close to 50% rise since the last post so Chris is keeping up the good performance. Has been a great way to have overseas exposure.
Mostly invested in Mastercard and Visa with some exposure to the US hardware market and US banking. Very little exposure to the internet stocks apart from Google and small stakes in Microsoft and Facebook. There has been very little change in the portfolio over the last year. If it is working why change and pay CGT.

 

[kahuna1]

For the record ....
He returned 47% including dividends verses the index ... which he and MFG use which was around 26% up in AUD terms year on year.

Whilst MFG did ok and Hamish Douglass is a fair investor ... FAIR ... the MFG two global funds returned 27% and 28% .... verses MFF at 37%.

Yet again MFF ... one of the founders of MFG and still associated working out of the same office but no management role in MFG ..... MFF beat MFG ... by around 10% this year.

The average the MFF fund manager, Chris Mackay has beaten MFG which itself is no slouch by over the past decade is now close to 8% each year .... basically a doubling of ones funds if compounded.

Whilst Mackay prefers no press, does not even bother with results and bench-marking, others do. He is in the top 50 fund mangers on performance over the last decade. This is out of 10,000 fund managers.

An astounding result and a low key manager who, well .... just does it. Buffett has not even beaten the index over the past 10 years despite amazing tax ripoffs he has gotten via his companies .... tax that the USA healthcare and education system needed, but Warren .... needed more.

Ahh ... still of the view USA side eventually tops out. What did occur in 2019 was that the tax paid by USA corporates halved .... hence the 30% rally. Tax paid overseas by USA companies is now optional and if you complain .... USA will impose tariffs as France just found out and India to its regret in 2017.

Whilst impeachment is unlikely, the corrupt nature of the system is exposed. Globally no other nation can or will trust USA in any deal for decades irrespective of 2020. Any trade deal when say a govt changes likely to be torn up, as for defence or Non nuclear .... NATO and Iran deal torn up spring to mind. China trade deal, a problem created by USA, achieved ZERO ... other than China declaring no USA software can be used and NON CHINESE made computers are banned in all levels of Govt from 2024 which includes Federal state local which are in effect the same and govt owned enterprises ... which are MASSIVE.

USA for now has ignored this total and permanent destruction of a market. Why ? Well buried in the corrupt USA budget the taxing of overseas operations of USA based multinationals became even more a joke with Mnuchin allowing loans ... non audited loans to tax havens with no penalty for 7 years, which will totally eliminate any tax burden not paid overseas in bringing the money back to the USA.

Hence the rally .... basically ... things like Facebook claims to pay 1,000 million in overseas tax in 2018 ... when you add it up, it comes to less than 100 million. Basically a fiction. Totally a fiction. Largest income source in Asia is Japan with 1.58 billion USD income and overall 40% plus margin on sales profit wise ... Japan in 2018 got paid 200 million Yen or less than 2 million USD in tax on what clearly was 650 million in profits. So under 1% .... tax paid to Japan and the rest stolen. Australia fared slightly and I mean slightly better. Facebook sales here just over 990 million USA or 1.455 Billion AUD so a profit at 41.6% margin on sales WAS 605 million NET profit PRE TAX ... we got paid from memory insteead of 180 million tax, a mere 16 million.

We despite Japan having 25 million very high income facebook users ... and Australia 15 million, Australia collected 8 times more tax ... than Japan and ... well instead of paying 30% tax here ... or even sharing say 50/50 ... despite the fact we proportionately pay for R+D and gave done so for years .... we got paid at 2.6% tax rate instead of the 30% one.

Worse and more disgraceful is Facebook one of Australia's largest tax avoiders booked over half its sales via low tax tax havens and GST was avoided ... to the tune of 80 million.
]
One company stole 250 million in a single year from Australia, Google was far worse, Apple ... even worse, Microsoft the king of thieves has been doing it for years and its sales near 5 billion AUD ... only half go through Australia and GST and Tax Microsoft and that scumbag Gates who now has exited into a tax haven called a charity ... they borrowed or stole close to a billion all by themselves.

USA market and this rally ... is based upon destruction inside the USA with tax in corporate side HALF the level in was say in 2006 ... HALF and an at best 15% of overseas paid v 2006.

Things may change ... most Americans outside the top 20% have NO stocks, they are being crushed by healthcare costs at 3 times anywhere else, and wages that ... are sadly a joke. For the record the top 10% own 84% of all stock.

If you go out the top 20% mainly white .... own 95% of all stock and in fact, shockingly the bottom 80% in the USA own NOTHING .... or a mere 7% of the overall wealth verses a number in Australia that is 4 times that !!

The official Median wealth in the USA is supposedly 60k .... this number was 7k until they changed how they measure it and included pensions which are private in the USA .... unfunded and crashing every day and benifits being cut often by 90% ... they included these fictional assets in the numbers.

A change ... of leadership in the USA.... is possible and it will ... well ... reverse what is an abomination there. Australia and the rest of the world cannot survive . UK recently commented Google in a single year stole enough tax to pay 60,000 nurses in the UK.

If the USA were to have say Warren or Sanders elected who merely will make the bloody companies pay tax, the stock market which since 2015 has nearly doubled ... 1,800 to 3,330 in the S+P I suspect the fall will be dramatic. The PROFITS and RECORDS Trump touts about are fictions. USA inequality hit all time lows, healthcare, life expectancy ... Job Quality index is at 50 year lows, participation rate in the USA is near 40 year lows verses rest of the world at near all time highs ....

This 2020 is going to be fun. If its Trump for another 4 years, which given the impeachment was never going to evict him, I suspect he wins a battle on that one, but Lev Parnas and even moderate Republicans want healthcare ... and exposing the corruption domestically will I suspect be telling.

Amusing ... MFF ... prefer them ... with above caveats ...

 

[Dona Ferentes]

Magellan Financial Group co-founder, Chris Mackay, has quietly turned extremely bearish on equities, switching almost half the holdings in his $1.6 billion global equities fund, building a 46.4 per cent cash position as of May 29, mostly held in US dollars.

At the start of the year, the fund's cash levels were just 2.2 per cent, implying the manager sold nearly half his equities holdings over 2020. Through May, Mr Mackay's fund sold $192.8 million worth of assets with purchases of less than $1 million in a near all-in bet on another market correction.

He suggested the market was too optimistic over the likelihood of a COVID-19 vaccine.

"Business owners, political leaders and the general public appear to be more optimistic, around the world, as are recipients of fiscal payments travelling hundreds of miles to queue for hours for gaming venues reopening."

Mackay further justified the sale by arguing the virus will have long-term economic consequences.

"Heavily populated cities, globalisation and widespread global travel are crucial for ongoing economic growth and economic sufficiency for billions of people, but they are the fuel for future airborne viruses spreading. "Longer term, even if this pandemic is promptly brought under control, conditions for ready transmission remain."

He went on to attribute the shock rise in global equity markets over May, which included a 9.1 per cent return for the Nasdaq, partly to the rising influence of exchange traded funds (ETFs). "ETF trading is almost never associated with fundamental analysis of the underlying values compared with market prices of the individual components."

Mr Mackay also argued the unprecedented fiscal and monetary policy response to the pandemic may have long-term consequences that the short-term focused market has not priced in.

"Cyclicality may be disguised and underestimated during the heaviest phases of fiscal and monetary stimulus," he told investors. "Historically there have been eventual limits, for example to massive bond issuance, although relatively unconstrained issuance and central bank buying may go on for extended periods. "The implications for US markets are unknown if, for example, 10-year bond rates move to say 2 per cent from 0.6 per cent. The last 30 years in Japan do not support a favourable thesis for sustained economic earnings and market growth, although the economic and market differences between leading US companies and Japan are meaningful."

Under the fund's investment limits, no single investment in a company should exceed 10 per cent of the NAV, or 20 per cent given permission from the board. MFF Capital has not publicly disclosed any hard limits on cash holdings.

Mr Mackay told investors at the end of financial 2019 that higher market prices, and sustained low-interest rates, meant that his expectations for future medium-term returns were lower.