Magellan (ASX:MFG) launches new ETF offerings

Magellan Financial Group (ASX: MFG) has just launched a new range of 'Core' ETFs. Here's a breakdown of the new funds and their structure.

| More on:
Block letters 'ETF' on yellow/orange background with pink piggy bank

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Magellan Financial Group Ltd (ASX: MFG) is one of, if not the, most successful Australian fund managers on the ASX (or off it, for that matter). Just last week, Magellan told the markets it has close to $103 billion (specifically $102.996 billion) in assets under management, which included net inflows of $26 million for the month. That's a lot of money to be taking a clip from every year.

Over the past two years or so, Magellan shares have appreciated by almost 120%, turning Magellan co-founder and chief investment officer Hamish Douglass into a billionaire.

Magellan has successfully tapped into an appetite in the Australian investor for access to some of the best companies in the world outside the ASX.

Magellan's flagship Global Fund has returned an average of 15.67% per annum over the past decade. That has clearly turned heads given that this fund (across both its listed and unlisted offerings) has more than $15 billion in assets under management alone.

But Magellan has been busy in recent months. It has just completed an amalgamation of some of its listed and unlisted funds into single entities. That's why investors can now choose to buy open-ended managed fund units directly from Magellan or on the ASX, or closed-ended shares just on the ASX. As an example, the Global Fund now trades on the share market as Magellan Global Fund (ASX: MGF), as well as Magellan Global Fund Open Class (ASX: MGOC).

Magellan launches new 'Core' ETFs

But we got some more exciting news from Magellan today. The company has announced it is launching a new series of exchange-traded funds (ETFs), most of them under a new 'Core' brand. These funds aren't listed on the ASX, but rather on Chi-X, an alternative share market to the ASX in Australia.

These new funds (and ticker symbols) are as follows;

  • MFG Core International Fund (CXA: MCSG)
  • MFG Core ESG Fund (CXA: MCSE)
  • MFG Core Infrastructure Fund (CXA: MCSI)
  • Magellan Sustainable Fund (CXA: MSUF)

You might notice that the last one stands out. The Magellan Sustainable Fund is not part of this 'Core' series, but rather an actively managed fund dedicated to ethical investing. It will set investors back with a management fee of 1.35% per annum.

But turning back to this 'Core' series, the idea is that these ETFs provide a broader and less 'active' approach than Magellan's existing funds. For one, instead of Magellan's standard fee of 1.35% per annum (which applies to the Global Fund), these ETFs will only charge 0.5% per annum.

Additionally, each fund will reportedly hold between 70 and 90 companies (70 to 100 for the Infrastructure Fund). By comparison, the Global Fund aims for between 20 and 40, and Magellan's High Conviction Trust (ASX: MHH) holds just 8 to 12. The Global Fund also has the mandate to keep between 0% and 20% of its value in cash (the High Conviction Trust aims for between 0% to 50%). Meanwhile, the Core funds have a maximum of 10% cash (5% for the Infrastructure Fund), with "an aim to be fully invested".

Why this new range?

The reason for this new range? Magellan CEO Brett Cairns had this to say:

The MFG Core Series has been under development for several years and extends the successful approach that has been applied by our institutional Core Infrastructure Fund and mandates for the past 10 years. This approach actively constructs diversified portfolios of high-quality companies leveraging Magellan's research, and manages them using a proprietary process…

We believe the series provides an attractive lower cost alternative for those wishing to gain an exposure to Magellan's research and investment expertise but are not necessarily seeking our full actively managed portfolio services. We have also had considerable interest from retail investors and advisers in making our sustainable investment strategy available to the retail market in Australia.

Should you invest $1,000 in Magellan Financial Group right now?

Before you buy Magellan Financial Group shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Magellan Financial Group wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys...

See The 5 Stocks *Returns as of 7 February 2025

Motley Fool contributor Sebastian Bowen owns shares of Magellan High Conviction Trust. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Market News

ASX shares Business man marking buy on board and underlining it
Broker Notes

Top brokers name 3 ASX shares to buy next week

Brokers gave buy ratings to these ASX shares last week. Why are they bullish?

Read more »

I young woman takes a bite out of a burrito n the street outside a Mexican fast-food establishment.
Opinions

As the Guzman y Gomez share price drops 14% on results, what should investors do?

Is the Mexican restaurant stock’s valuation still too spicy?

Read more »

A woman sits in a cafe wearing a polka dotted shirt and holding a latte in one hand while reading something on a laptop that is sitting on the table in front of her
Share Market News

Bank stocks tanked and telcos rose amid the ASX 200 losing 3% last week

Why did ASX 200 financial shares fall 7.49% while communications shares lifted 1.62%?

Read more »

Smiling couple looking at a phone at a bargain opportunity.
Opinions

Near 52-week lows, are these ASX 300 shares now unmissable bargains?

Are these stocks at valuations that are too good to ignore?

Read more »

A businessman hugs his computer and smiles.
Opinions

If I could only buy and hold a single ASX stock right now, this would be it

This business has a lot of positives.

Read more »

A woman walks along the street holding an oversized box wrapped as a gift.
Best Shares

Top ASX shares to buy following earnings surprises

Who doesn't love a surprise?

Read more »

A runner high-fives as he crosses the finish line in pole position
Share Gainers

Here are the top 10 ASX 200 shares today

It was a woeful end to a woeful week this Friday for ASX investors.

Read more »

Investor looking at falling ASX share price on computer screen
Earnings Results

2 ASX All Ords shares crashing 16%+ on earnings updates

It's a red day for the market on Friday.

Read more »