The ASX-listed Magellan Global Trust (ASX: MGG) provided a monthly update today to reveal it's outperformed its benchmark the MSCI World Net Total Return Index by 3.4% net of fees over the last 12 months.
In total it has returned 15.7% to investors over the past year, which is a pretty decent performance as it rides the tailwinds of owning some of the world's best tech companies.
Its top 10 holdings include household names such as Facebook, MasterCard, Starbucks, Alphabet, Visa and Apple, which means investors in the fund get some excellent exposure to blue-chip tech shares.
The $2.13 billion fund's outperformance is also a positive for investors in its effective holding company Magellan Financial Group Ltd (ASX: MFG) as it takes performance fees as a fixed percentage of its funds' outperformance of their benchmark.
Performance fees are extremely popular with money managers as they're lucrative and pretty much pure profit, with the Magellan share price printing a record high of $39.80 this morning in response to strong U.S. markets and the increasing likelihood of a significant final dividend as a result of performance fees earned.
For more conservative investors the Magellan Global Fund and its respectable outperformance net of fees also offers a generous 5% discount price on reinvested dividends. This incentive is in part because Magellan wants to manage more money so it would rather dividends are reinvested rather than paid out the door as cash.
Magellan the fund manager also remains a good investment option in my opinion as it continues to win institutional and retail business via a sound strategy of investing in high-quality U.S. companies.
This kind of buy-to-hold blue-chip strategy has made Warren Buffett into the world's richest money manager and it's also making Hamish Douglass into Australia's richest money manager. Moreover, Magellan may have a steady if unspectacular growth runway ahead of it yet.
