Magellan to develop MFG Core Series

Magellan, which has reported a 26% growth in funds under management (FUM) to $95.5 billion for FY2020, has announced the development of a series of diversified investment strategies for retail investors – the MFG Core Series. 

The MFG Core Series would initially comprise three funds: MFG Core International Fund, MFG Core ESG (environmental, social, and governance) Fund, and MFG Core Infrastructure Fund.  

In the announcement regarding its financial results for FY2020 made to the Australian Securities Exchange (ASX), the firm said it planned to make each of these open-ended funds available as an Active exchange traded funds (ETFs), accessible via the Chi-X exchange and by direct application, by the end of the year.   

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“We believe it provides an attractive lower cost investment alternative for those wishing to gain an expose to Magellan’s research and investment expertise but are not necessarily seeking our full actively managed portfolio services,” Magellan’s chief executive officer, Brett Cairns, said in his annual letter to shareholders 

At the same time, the group saw a 26% growth in average FUM over the previous corresponding period, to $95.5 billion (average FUM of $75.8 billion for the year ended 30 June 2019) and reported net profit after tax of $396.2 million, which represented a 5% rise over the previous corresponding period (pcp). 

Following this, revenues for the year ended 30 June went up by 20% to $674.8 million and was driven by an increase in total management fee revenues as a result of a 26% increase in average FUM over the period attributable to strong investment performance and net inflows. 

At the end of the FY20, the group’s FUM, which grew to $97.2 billion from $86.7 billion a year before, were split between global equities (77%), infrastructure equities (16%) and Australian equities (7%). 

“The increase in FUM was driven by investment performance of approximately $5.4 billion and net inflows of $5.7 billion less cash distributions (net of reinvestment) of approximately $0.7 billion. As we have previously noted, given the size of the group’s FUM, investment performance is the key driver of FUM movement,” Cairns said. 

The directors have declared total dividends of 214.9 cents per share for the year ended 30 June 2020 which translated into a 16% increase over the 2019 financial year.  

They said: “In respect of the six months to 30 June 2020, the directors have declared a total dividend of 122.0 cents per share, franked at 75% (111.4 cents per share, 75% franked, in 2019) which will be paid on 26 August 2020. The dividend comprises:  

• A final dividend of 91.6 cents per share; and  

• A performance fee dividend of 30.4 cents per share”. 

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