Doug Goodwille from Kayne Anderson speaks to Drew Meredith from The Inside Network on market thinkers.
While a surging gold price is on hold as the world adjusts to a Trump presidency, all the factors that saw its price rise more than 50 per during his first term in office – trade disputes, fiscal deficits and geopolitical tensions – are almost certainly guaranteed the second time around.
Big news sends Magellan shares lower
The Magellan Financial Group Ltd (ASX: MFG) share price will be on watch today after the funds management firm announced the resignation of Chief Executive Officer (CEO) Brett Cairns overnight.
It’s been a turbulent year for the Magellan share price, sinking 41% over 2021.
MFG share price
End to 14-years of service
Magellan cited personal reasons for Mr Cairns exit.
Current chief financial officer (CFO) Kirsten Morton, who has been the Magellan for eight years, will be appointed CEO on an interim basis.
Mr Cairns originally joined Magellan as a non-executive director in 2007. Subsequently, he joined the executive team in 2015.
He resumed the top job at Magellan in 2019 replacing founder Hamish Douglass who stepped into the executive chairman role.
Brett was instrumental in the development of Magellan’s exchange traded products and in the development of Magellan’s retirement product, FuturePay. On behalf of the Company, I would like to thank Brett for his extensive contribution to Magellan since 2007 and wish him all the very best in his future endeavours.” – Hamish Douglass
Rocky 2021
Magellan has been facing criticism over the past 18 months as its flagship global fund significantly underperformed its benchmark.
An outsized position in Chinese conglomerates and a cautious cash position weighed on performance as markets rallied.
Subsequently, the fund achieved just an 8.5% return over the past year, compared to 31.3% for the index.
As a result of the poor performance, the company’s track record across three- and five-year periods has also been dragged down.
Fees have also been a concern. Its 135 basis-point management fee is at the upper end of its peers.
Some analysts suggest a fee cut may be on the horizon or potential outflows, however, Mr Douglass has defended the firm:
“On fees. On the institutional business, which is $80 billion in funds under management. We haven’t seen any questions or pressures on fees whatsoever. We are highly, highly competitive there”.
“I haven’t found any sort of institutional investors who actually find any sort of concern about what’s going on” – Hamish Douglass
“But do we think our overall proposition is uncompetitive in the retail market? No, we don’t. We’re not about to slash fees. It’s not something that we’re hearing”.
To keep up to date on all the latest news regarding Magellan and the ASX, be sure to bookmark the Rask Media home page.
Information warning: The information in this article was published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169
