Magellan Shares Frozen In ASX Trading Halt On Bumper Profit
Magellan Financial Group Ltd (ASX: MFG) shares remained frozen in a trading halt this morning following its FY19 profit result update to the market this morning.
Magellan Financial is a funds management business that largely invests in international shares like Google and Visa. It was set up in 2006 by Hamish Douglass and Chris Mackay. Since inception, Magellan claims it has been one of the most consistent market outperformers after fees.
The following video comes from The Australian Investors Podcast and features Magellan’s Hamish Douglass:
Magellan’s 2019 Financial Report
Magellan reported its average funds under management (FUM) grew by 28% to $75.8 billion during its financial year, thanks to a strong performance by Magellan’s various funds and it also attracted a lot of new inflows because of the performance.
Due to the rise in the FUM, Magellan achieved a 22% increase of management and service fees to $472.5 million and a 35% increase in ‘adjusted’ net profit after tax to $364.2 million.
Net profit came in at $376.9 million, whereas the market was expecting $338.7 million according to CommSec and Bloomberg. That means, Magellan investors could be happy with this result. Due to the strong performance, Magellan decided to up the dividend by 38% to 185.2 cents per share.
Magellan’s High Conviction Trust To Be ASX-Listed
Magellan also announced the initial public offering (IPO) of the Magellan High Conviction Trust. It’s a fund/trust which aims to invest in the best 8-to-12 best stock ideas from the Magellan investment team. The trust will have a yearly management fee of 1.5% per year plus a performance fee of 10% over a single hurdle of 10% per year total return after management fees.
Magellan said its unlisted strategy had returned 16.6% per year net of fees since it started in July 2013. You can read more about the Magellan High Conviction Trust in this Best ETFs Australia article.
Time To Buy Magellan Shares?
Magellan continues to impress and I believe its strategy of launching ASX-listed trusts is a good way to lock in funds under management (FUM), as long as the underlying performance continues to do well. The Magellan share price has run up strongly, so I’m not jumping to buy shares today. Having said that I think it is the best fund manager to own on the ASX.
Want to know the name and ticker code of our #1 ASX ETF for 2019? Click here to access our free investing report, including the name, ticker code and a full analysis of our favourite ETF.
Legal disclaimer: Chances are, the information you read on the BESTETFS website may contain a mix of factual information and general financial advice. Any information/advice on this website is limited to general financial/investment advice only. The information has not taken into account your specific needs, goals or objectives, so please consider consulting a licenced and trusted adviser before acting on the information. Please read The Rask Group’s Financial Services Guide (FSG) for more information and NEVER INVEST IN AN ETF OR MANAGED FUND BEFORE READING THE PRODUCT DISCLOSURE STATEMENT (PDS). If you don't read the PDS you're practically flying blind with one arm tied behind your back. This article is authorised by Owen Raszkiewicz of The Rask Group, which is a corporate authorised representative No. 1264179 of Strawman Pty Ltd (ACN: 610 908 211) (AFSL: 501 223).
At the time of publishing, Jaz does not have a financial interest in any of the companies mentioned.
Check out our ETF Strategy + portfolio for ‘no fuss’ investing!