The Magellan Global Trust
The Magellan Global Trust will invest in a focused, global equities portfolio and aims to deliver investors a Target Cash Distribution yield of 4% per annum. The Trust is expected to be listed on the ASX on 18 October 2017 (ASX code: MGG).
The Trust will be managed by Hamish Douglass and Stefan Marcionetti and will apply the same investment philosophies and processes that Magellan has successfully employed for more than 10 years.
The Trust seeks to achieve attractive risk-adjusted returns over the medium to long term, while reducing the risk of permanent capital loss.
The launch date below refers to the date that the IPO opened.
Magellan Global Trust and global equities insights: Q&A with Hamish Douglass
- What are the objectives of the Magellan Global Trust?
The Trust has two main objectives. The first objective is capital preservation. The second is to generate attractive risk-adjusted returns over the medium to long term. We achieve this by investing in a high-quality portfolio of what we consider to be the world’s best businesses at prices that we believe are attractive for the long term. We believe that by doing this we will reduce the probability that our investors will experience a permanent capital loss, even if share markets go down from time to time, as inevitably they will.
- Why is Magellan launching the Trust?
Magellan is seeking to provide an attractive vehicle for investors making an investment in global equities in a form they are highly familiar with – an ASX-listed closed-ended vehicle. We think retail investors value regular cash distributions and these have been missing from many other global equity products. We think that a 4% cash yield differentiates the Trust.
There are a number of other distinguishing features of the offer. One is that Magellan will pay all the costs of the launch of the Trust, in cash, so that the opening cash net asset value per unit equals the application price of $1.50 per unit. The other is that we have put in place an attractive reinvestment plan that includes a 5% discount in respect of cash distributions. The amount of the discount will be paid for by Magellan to ensure that the holdings of those unit holders not participating won’t be diluted. We think this will be very attractive to investors.
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