Magellan Funds Group is in the process of securing inclusion on the new Australian Securities Exchange (ASX) mFund Settlement Service as a means of attracting fund flows from the SMSF sector.
“We are working on an ASX-listed version of the Magellan Global Fund,” Magellan managing director Hamish Douglass said at a recent investor briefing.
“This almost would look like an actively managed exchange-traded fund and it’s kind of the holy grail for fund managers in the world, and it really doesn’t exist in the world and the reason it doesn’t exist is that it’s really difficult to do.”
Douglass said the process had been challenging from a regulatory perspective, but he was confident Magellan was making progress to achieve its goal, which should provide very lucrative fund flows to the manager.
“If we’re successful, we believe we are in a hugely privileged position to go after that [the SMSF] market with the stockbroker community and with the direct channels such as CommSec and Etrade and others,” he said.
“We think we have a brand advantage [and] I think we have a distribution capability to open up that market, but we have to have a form factor that works.
“The problem is these investors simply will not use an unlisted managed fund. It is a completely foreign concept [to them].
“They trade in shares and they want to close the trade in live markets.
“We need a form factor that actually meets their needs and if we have something that meets their needs, the opportunity is absolutely enormous for Magellan.”
The funds management group was keen to make inroads into the SMSF market because currently it was not gaining any benefit from the sector at all, he said.
“We virtually have no share of that market and potentially it’s the fastest-growing and largest segment in the market,” he said.
The mFund initiative, coupled with stronger ties to advisory channels, should result in a significant boost to Magellan’s inflows in the immediate future, he said.
