MHH - Magellan High Conviction Trust

[System]

The Magellan High Conviction Fund seeks to invest in outstanding companies at attractive prices, while exercising a deep understanding of the macroeconomic environment to manage investment risk.

Magellan perceives outstanding companies to be those that are able to sustainably exploit competitive advantages in order to continually earn returns on capital that are materially in excess of their cost of capital.

Magellan focuses on risk-adjusted returns, rather than benchmark-relative returns. As a result, the Magellan High Conviction Fund's investment process is designed to generate an unconstrained, highly-concentrated portfolio of high-quality companies.

The Magellan High Conviction Fund will comprise of 8 to 12 investments, with the portfolio weighted towards Magellan's highest-conviction ideas. The Fund may also hedge some, or all, of the capital component of its foreign currency exposure arising from investments in overseas markets back to Australian dollars.

It is anticipated that MHH will list on the ASX during October 2019.

https://www.magellangroup.com.au

 

[willy1111]

@kahuna1 I'd be interested to hear your thoughts on this one, I believe you have some admiration for some of the Magellan crew.

Anybody else like the Magellan crew? Most of us on here prefer to pick our own stocks rather than invest in funds, MFG has been a stellar performer in my portfolio.

 

[kahuna1]

Hmm ...
Well ... MFG was a fan, old team, but not so much now.
Long explanation and a bit of work on my part to present it.
Whilst MFG also has been a great stock and FUM also via the rise of the USA side also a plus, the current mixture of the portfolio is not something that amuses me.

Stock recently had a cow v the highs up at $62.. one side congratulations and the dividend is more than the shares cost .... and that's just 6 months worth.
This however is the trust fund and its selections and concentrations leave me less than amused in the current trade scenario and USA is destroying its own markets forever. Not just China but most nations who have a spine and are preparing to charge tax to the likes of Google and FB and Amazon.



Will have a good look and get back.
Might be a while, off to annoy Donald ...

 

[kahuna1]

...
I really cant write what I was about to.

I took the time to listen to Hamish and his quaint absurd macro views.
Examined current holdings.

Listened to even the head of research who seemed to think Tesco rallied and the share halved and never has recovered.

Buying at all time highs and INCREASING risk ? Buying hand grenades at that .... tech stocks which covered past, very poor choices. such as Tesco IBM Kraft and so on.

6.7% of Facebook ? Are you serious ?

I cannot recommend this stock. It frankly scares me.

Whilst not predicting anything, holding 33% of extremely high PE stocks of NON TAX paying outright crooks like Google, Facebook, Microsoft and so on in today's environment is either brave or stupid.

Since my Blackbury still works and so too my old Motorola phone, I wonder if Hamish Douglass and his ego are in fact larger than a mustard colored person who tweets at all hours.

NOT a fan sadly.

 

[So_Cynical]

Morgans posted this 2nd Sept 2019: Chris Wheldon, Portfolio Manager of Magellan High Conviction Fund talks stock selection and global outlook etc.
~

 

[kahuna1]

Interesting speech ....

Historically holding 20% cash ... and an overweight tech position which outperformed the market was downside protection ....

This person .... thing ... is an imbecile sales person .... what I just said is they ABANDONED the cash holding they held since 2013 ... EMBRACED the hand grenade section of the market ... did so at all time highs .. and went massively overweight things that will give them the OPPOSITE protection to what they had in the past ... and covered loosing massive amounts on say Tesco shares which halved ... Kraft shares which lost 66% of value ...

Now if you like say Trump believe the market already up 60% in recent times and the AUD USD at 10 year lows ... goes lower .... and that say China with 4 times the population a vibrant middle class with ACTUAL ASSETS where the USA middle class the lower 80% holds a mere 7% of all the wealth ...

Your delusional.
Hamish Douglass is the CEO and Fund Manager ... and to have such a delusional outlook on the macro side and abandon all risk as I said is either stupid ... or brilliant. I strongly suspect the former for a lot of reasons and the USA and its trade war, its America first policy may have worked when the USA was actually something about 100 years ago. Today with in reality only 100 million with any real consumer capacity, a healthcare system that drains all wealth, wages for the lower 80% have an average income of $32,000- and debt of 22.5 trillion and rising ... 106% of GDP hitting 1 trillion in 2019 and sadly due to massive NON fundi0n0g o0f p0ensions, no medical restraints ... the best estimate is a debt to GDP ratio worse than any EU nation by 2023 and they collect 30% of GDP verses 40% of GDP tax collected by most EU nations and ourselves up there at 38/% including Super ...

USA has not a hope in hell .... Macro economically

What sort of egotistical imbecile would abandon a lower risk and downside protected portfolio and at all time highs in equity prices ?

That in plain English is what has been done.
Either brilliant or stupid.
Either like Mr Trump you relive the current state of affairs of tax theft on a global scale goes on ... the world will ignore the Fiscal situation of the USA when say Germany has taken its debt to GDP ratio in the past few years from 80% to 60% DOWN 20% where the USA has raised its debt to GDP to near Italian levels BUT Italy and say France ... collect 40% of GDP in tax have a healthcare system that costs 30% the USA one and provides 150% the service and care than the USA one and they NOW have their pensions FUNDED .

USA is paying pensions on its bloody credit card ...
USA is going one way .... threatening all others even France for actually saying ... hey ... Google you collected 10 billion and avoided even sales tax on a lot of that ... paid NO income tax ...

Hilarious how a fund manager who well ... Hamish ... if you have followed him ... smart boy ... but recently thinks he is god, ME ... I am a nobody.

I just am a meat an potatoes look at the wider world which drives the overall equity side of the equation.

On one hand Hamish agrees that things are likely going to have lower returns in coming years given the rises .... so WHY ... WHY the hell would he embrace a massively overweight tech side which has and is overpriced and priced on Tax theft globally and a tax paid in the USA which has become a joke and cannot be sustained ... USA must reverse its tax cuts or fiscally implode. Simple as that.

Even a student can work that one out. Not this fund. IT believes in its own reflection which is SAD ... SAD because for so long it did so well ... so disciplined and whilst a lot of duds ... Tesco and Kraft and a lot of others ... which not as spectacular losses but just as poor selections in an ultra bull market post 2010 ... in an ultra bull market as they hold mainly USA assets ... and the AUD USD exchange rate peaked long ago at $1.10 .... and its now 67 cents ... LIKELY closer to a low ...

If I go to the 3 main tech holdings I dislike in this portfolio ... Google Microsoft and Facebook ... and in 2017 1 st July Australia introduced GST for ALL transactions over the internet ...
The above 3 had and have sales of 10 billion combined in Australia.
The tax office supplies summaries of tax paid and CLAIMED turnover and corporate tax paid.

The issue was ... PRE 2017 a lot of income AVOIDED GST ... illegal .. criminal ...'
The turnover number for them of 10 billion verified 3 ways ,,.. even senate testimony. ..

So in2018 tax year ... in Australia ... Combined they declared sales of a mere 3.05 billion.. this if from ATO tax summary a missing 7 billion AVOIDED and EVADED 10% GST ... 3 companies decided between them, USA based ... USA protected by a tyrant .,, not to pay 700 million in GST ...

Brilliant ,... buy crooks ?

THEY despite ignoring the law pre 2017 ... Decided to IGNORE it yet again in the 2018 tax year. .... NO GST for them .,... it was clear pre 2017 .... CRYSTAL CLEAR post 1 st July 2017 .... we stole 700 million in GST and are ABOVE Australian law.

This behavior is global ... and no Australian company can ever hope to compete when the other sells its product MISSING GST .... 10% ahead.

Now profits ... do we get a share ? Overall One makes 27% on sales Facebook makes near 44% after all costs ... all R+D on sales ... so 10 billion sales ... let be conservative and use a mere 30% profit margin on actual sales so 3 BILLION was earnt NET profit ... by operations IN AUSTRALIA ... do we get a share at 30% tax ... so 900 million Corporate tax.

What did we share out of 900 million tax after all costs .., all R+D deducted .... well Google paid 33.5 million tax here ... Microsoft paid 65.4 million and Facebook paid 12.5 million.

Thats a total of 111.3 million Paid .... when somewhere between 900 million and 1 billion tax was owing.

We get .... 3.5% tax paid ? 700 million STOLEN in GST because they refuse to follow the law ?

Morrison out PM is a schmuck and sadly globally these cretins cannot endure .

Do we get HALF share of global profits they get to keep say 85% of it ? NO ... they violate us ... steal 700 million in unpaid GST and then slap us in the face ...

This is a macro perspective of the trade war and how corrupt the USA has become.
Facebook for the record pay bugger all tax in the USA as well. IT CLAIMS it -pays 1 billion in overseas tax and since Australia is not huge .,.. but say 5% of global sales outside the USA a 12.5 million tax bill for this so under 10 million USD l.. is a rate of less than 200 million ACTUAL tax paid overseas.

Being curious ... I went to UK ,.. then 5 EU nations which represent with Australia well over 50% of all NON USA sales and supposedly Facebook PAID 1 billion int ax overseas according to its USA reports, I sadly found LESS >>> LESS than 100 million paid. Where did they pay this tax ? Not to the UK their share was worse than the pennies we were thrown, France well it got even less, Germany .... oh my ,,, on and on it went.

Brilliant or stupid .... I strongly suspect globally USA will fiscally implode without dramatic action to stem this theft inside the USA. Its budget is out of control. Let alone Social Security and healthcare system. As for the rest of the world, are we allowed to charge GST ? Apparently NOT.

Australia ... and the rest of the worlds faces a tyrant protecting Oligarchy billionaires who pay no tax anywhere ... and our very future and way of life is at threat.

We and this is just 3 companies ... there is NO doubt about 700 million in GST ... and they should be charging the heads of these companies and criminally for tax theft. The law is clear .... Morrison our PM is a gutless twat !!

As to what share ... we get of the NET profit ... we have paid our share of R+D in developing their product ... IT IS NOT >.. wholly USA or company owed. We have allowed deductions for R+D ignoring past tax theft and NON payment of any tax in some cases EVER .... so the fable that we cannot or should not charge TAX for it here ? For something that is more a personal service like advertising on FB or Google ?

Really ....
The bottom line is ... 30 billion is NOT paid in Australia in tax each year, half of it IS NON debatable and whist the ATO is doing its best, its dealing with a spinless twat and in incompetent Treasurer Friendenburg ... who appear to be on the payroll.

Globally multiply this 20 times and the USA equity side is well ... supported by hot air, and unsustainable debt and unfunded pensions medical care and so on.

Not a time to abandon RISK ... as this fund has done.
Not a time to embrace the likes of the worlds largest ever tax thieves.
If I stole 1.5 billion a year, I would expect to be jailed, so WHY ... is Australia not acting ? Enforcing even GST ? Because its SCARED and our PM seems to lack a spine.

700 million missing in GST is a big deal l...

Oh and there are WORSE examples such as Apple and its non payment of tax anywhere ... it does however comply MORE with GST ... or Chevron on the Oil and gas side.

The more I look and think about things and assets this fund holds, its current policy and where and only where things can go ....

I am afraid ... but maybe I am stupid because Hamish Douglass just told me he is brilliant.

Maybe he is. As I said, either brilliant or stupid. Tide is actually out and I like many times in the past look at the naked shriveled ... Hamish reminds me of the uttering s of Andy Kovell of AWA and his telling everyone it was easy and they were stiupid. AWA ... well ... is history.

 

[Miner]

Interesting discussions and then realised I got a priority offer of the MHH IPO because my super is BT Super Wrap. So I started reading stuff more intensely including the posts on this thread.
1.5% per NAV (why not on price then there is a drive).
There is a lot to read but this fee structure is interesting. I am asking the fellow ASF folks to advise if the performance fee 10% for 6 months or 20% per annum payable 6 monthly.
" What fees will Magellan receive? Management Costs Management fees Magellan is entitled to receive management fees of 1.50% (exclusive of GST) per annum of the NAV (before fees) of the Trust. The management fees are calculated daily based on the NAV (before fees) of the Trust on that Business Day. An estimate is accrued daily in the NAV per Unit and the fees are payable monthly in arrears. Performance fee Magellan may be entitled to a performance fee of 10% (exclusive of GST) of the Excess Return of the Trust above the Absolute Return Performance Hurdle (10% per annum) over each six-month period ending 30 June and 31 December in each year (“Calculation Period”). Performance fees are accrued daily in the NAV. Performance fees are paid subject to the performance hurdles and the High Water Mark being met for the relevant Calculation Period

 

[kahuna1]

I have no issue with the fees.

Whilst not having read this one ... threw it out with the other 28 page thing with 19 photo's of Hamish the fund manager.

The fee's are are around 1.5% PLUS a bonus ONLY if the beet the index and the bonus is 10% of what they beet the index by. So if the index goes up 10% and they only make 10% NO bonus fee. If they make 15% and the benchmark makes 10%, they have out performed by 5% ... so they get 10% of the 5% out performance ... basically 0.5% so your return is 14.5%. Gives them incentive to BEAT the index and they only really make a bigger return if they beat it.

Basically you get to keep MOST of the funds return .... even when they do very well.

I note .... Donald is talking new tax cuts, threatening the USA fed unless they lower rates to zero and hey presto we are back at 3,000 S+P. Oh and China issue ... more hot air out of the Orange Orangutan

Apparently a 1.1 trillion deficit or 5.1% of GDP does not matter.
Similar ... to be running it 10 years AFTER the GFC ...
Health services and pensions being slashed ... but that's those outside the top 1% ...
Corporate tax in the USA in 2000 collected 205 billion, in 2019 when one takes out the tax being brought back from OVERSEAS tax stolen ... the USA collected 189 billion corporate tax ...

Its basically now 37% of 1980 levels.
Corporate donations work .... donate as a group 1.5 billion in lobbyists .... then the same under the table and save 300 billion in non pad corporate tax ... 300 billion in non paid income tax ... and 450 billion in NOT paid social security tax ... payroll tax ... so 1.050 trillion the top say 10% DO not pay v 1980 ... for a mere 3 billion each year.

Wow ... that's 300 to one each year.

Of course things go on ... till they dont.
EU lowered debt to GDP by 6% last 4 years.
EU collects tax at 39% of GDP ....
Health cover is close to perfect at 100%.

USA RAISED debt to GDP by 6% last 4 years.
USA now only collects 30% of debt to GDP ... it used to be 36%
USA pays 20% of GDP for medical which merely covers 65% of the USA ... forget those with non white skin .... they are not at my country club.
In effect USA healthcare costs 30% of GDP ....
Life expectancy in the USA is crashing ... even the official highly manipulated number is shocking.
For the lower 80% in the USA they live less than the people in Sudan. Mexicans live ON AVERAGE longer than the USA !!

USA debt to GDP will pass even the worse EU nation of Greece ... in short order ... but by 2023 it is expected to be 29 trillion .... WITHOUT ta cuts .... well over 120% of GDP ... and the orange moron thinks USA bonds should be negative like Germany who has taken its debt to GDP from 80% down to 60% ....

Hamish the fund manager ... Hamish Douglass ... whilst a self made man ... along with his co founder ... who now runs another fund not this one, I admire their work .... till one listens to the drivel they are speaking of late. Basically pure Trumpian swill. Whilst I suppose one can be critical from the cheap seats, to have a delusional view that inflation was some option up till early 2019 ... from 2012 ... and NOW it not ? NOT TO BE AWARE THE GROUND ... under their feet is crumbling is an absurd view of the world.

Delusional. One which ... like most things has a finite shelf life. At what stage does the world STOP buying USA bonds ? At what point does the USA itself change goverment and insist on universal healthcare ? The carnage of super profits being generated inside the USA for death of non white colored people is astounding. Pew and Kaiser research have some astounding common stories about operations and healthcare for the common person and being charged 4-100 times the price for various things.

On one must go .... Facebook paying tax at 14% ... overall ... but of the 1 billion supposed paid overseas .... I can only find UNDER 100 million. Basically fantasy tax paid. Oh and 5 billion allowed for tax deductions for shares issued to the management of the company.

I am not in the habit of investing with fools. Contrast between say EU and Australian monetary and fiscal policy .... mainly FISCAL .... and USA is totally opposite.

Tax enforcement .... again different.

When you have a fund ... attracted by larger profits made from tax theft globally as your main holds .... its not hard to say the return will have NOTHING to do with the underlying market longer term. Will say Google be allowed to steal 500 million GST from Australia forever ? How about the same from France and its 20% sales tax ?

Is the market pricing these stocks with TAX not paid .... right now ? What would occur if the USA said no more ... and collected tax at say 2010 levels ? Profits would slide at 2000 levels on company tax ...and profits would fall 25% and at 1980 levels they would HALVE.

Only the US has gone down this track ... at the cost of crumbling bridges ... education that is poor and costs double ... healthcare which costs triple and bankrupts the lower 80% with 80 million prior to departing on Medicaid emergency health insurance.

i listened to all the presentations by the fund-manger ... Hamish Douglass and his view is neo liberal right wing ... delusional as Trumps. It is not anti rich ... but when you have the insane USA with Bezos and his sham, its never paid tax, NOT ever ... never paid a dividend and it hit one trillion in value ? Basically a P/E with no tax paid of 100 .... is there something wrong ?

Can say an Australian Facebook compete paying 30% cor[orate tax when Facebook pays 2% ? a\Can it compete when one only pays or charges GST on 30% of its sales ?

MOrrison or fathead PM has appointed the accountants of the crooks the two big accounting firms to look into this .... basically a Trump like move. I wonder what job his relations will get ?

As to this fund ... well its likely to outperform the market when things are going up .... but in what is an inevitable correction if not crash of these greedy arse head types of Bezos and Facebook creep and Microsoft still doing even worse with Gates pulling the strings ... In a correction of change of the world TAX policy in relation to outright theft, these stocks will be worth 20% or so of current levels and their founders jailed as they should be.

I am not sure, even knowing this, if I would be too invested in any of them. Sadly, delusional Douglass the fund manger is oblivious to any of this and hence my horror at this fund and how some person can be so .... delusional.