Magellan fund restructure brings $13.5b to ETF industry

The conversion of the Magellan Global fund into an ‘open class’ structure has brought $13.5 billion to the exchange traded fund (ETF) industry, bringing the total industry funds under management (FUM) to $92.3 billion.

In an update from BetaShares, the newly-structured fund was now the largest product in the Australian ETF industry, pushing out Vanguard Australian Shares Index ETF which was $6.8 billion.

“A notable event this month was the conversion of Magellan’s Global fund into an ‘open class’ structure (which permits applications and redemptions both on and off market). As a result of this change, the entire $13.5 billion of FUM in that strategy has been ‘ported’ across to the ETF industry data,” it said.

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“Including this conversion, the industry’s market cap is now $92.3 billion, although, even without it, the industry rose to a record high of $78.7 billion.”

Announcing the planned change to the Australian Securities Exchange (ASX) in August, Magellan chairman, Hamish Douglass, said combining three global equity products into one unified trust would lead to simplification and efficiencies for shareholders. The change was enacted on 27 November, 2020.

“We believe that combining three core global equities trusts into a single, unified trust with a listed open class unit, which can also be transacted off-market, and a listed closed class unit is a ground-breaking innovation. We expect it will lead to simplification and efficiencies for unitholders and importantly should improve the trading price of closed class units,” Douglass said.

As well as the Magellan strategy, there were two other active ETFs launched in November; Loftus Peak Global Disruption and Munro Global Growth (long/short strategy).

The best-performing fund during the month was BetaShares Geared US Shares which rose 28% versus returns by the North American equity sector of 5.6%.

Performance of BetaShares Geared US Shares versus North American equity sector during November

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