Definitely [over the past 12 months] the exposure in the portfolio has been tilted towards large multinational technology companies, including eBay, Google, Oracle and Microsoft.
Transparency and a long-term focus are key to the continued success of international shares category winner Magellan Financial Group.
“Our investment management discipline is all about focusing on the quality of the company we’re looking to purchase,” Magellan head of distribution Frank Casarotti says.
“We want to invest in companies we have a high level of conviction in that will deliver results over many, many years.”
“We’re not about going for a quick trend or fad; we want to be transparent [with our investment strategy].”
This transparency has helped Magellan establish itself as a key player in the international investment sector, heavily targeting global equities and global listed infrastructure companies.
Alongside these two staple sectors, multinational technology firms, wireless payment methods and emerging market consumer assets are helping to make up the bulk of Magellan’s portfolio.
“Definitely [over the past 12 months] the exposure in the portfolio has been tilted towards large multinational technology companies, including eBay, Google, Oracle and Microsoft,” Casarotti says.
“We’re also believers that people will use less cash [for future transactions], so we have MasterCard and Visa in the portfolio and another one around emerging market consumer growth.
“As income grows, emerging markets will consume more – it’s a long-term theme and a multi-decade evolution.”
Magellan credits the portfolio’s build and the quality of the businesses contained within it to the success of its investment strategy.
“We’re investing in truly outstanding global businesses.,” Casarotti says.
“Our investment discipline is around the objective to preserve capital and to achieve a 9 per cent targeted return over the medium to long term.”
With investment options available in both hedged and unhedged versions “we’ve got a range of funds that should suit [different] investor [risk] appetites”, he added.
Magellan is currently working to expand its offerings with a listed vehicle that would use the same principles currently in development.
“The plan is to have a global equity vehicle listed on the Australian Securities Exchange (ASX), with the same strategy and same investment discipline [as our current offerings],” Casarotti says.
Focusing on its strengths, the company will continue to service the SMSF market by offering global equities, which allow investors to diversify their portfolios.
“There’s a general awareness most SMSFs are underweight in high-quality global equities, and there are a number of advisers who believe we can deliver good value [in this area] over many, many years.”
Indeed, many SMSFs have begun to include international equities in their portfolios as they would domestic property and domestic shares, he says.
“We are very specialised in international equities and global listed infrastructure,” he adds.
“We’re not going to diversify into asset classes we have no expertise in.
“[We will] continue to manage assets in a similar fashion to what we’ve done over the last seven years.”
This is the second year Magellan has been awarded the top prize for international shares in the adviser category.
Award winners
- Class Super: SMSF accounting software/administration
- Cromwell: Property
- Macquarie: Cash and term deposits
- FIIG Securities: Fixed income
- Westpac: Residential property loans
- CommSec: Australian shares
- TAL: Insurance
- BT Wrap: Investment platform
- Magellan: International shares
