ASX 200 drops, Magellan (ASX:MFG) and Breville (ASX:BRG) sink after FY21 results on Tuesday 17 August 2021 fool.com.au - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from fool.com.au Daily Mail and Mail on Sunday newspapers.
Why the Magellan High Conviction Trust (ASX:MHH) share price is soaring
A transition to an ETF structure is sending the Magellan High Conviction Trust share price higher.
Tristan Harrison has been a contributor to The Motley Fool since October 2016. He has an advanced diploma from the Association of Accounting Technicians (UK) and is currently studying to be a Chartered Institute Management Accountant. Tristan s goal is to help Australians learn about the great businesses listed on the ASX that will help grow their portfolio, wealth and confidence about investments over the long term. He s a keen tennis fan and can t wait for the next Australian Open to roll around.
Magellan High Conviction to move to active ETF moneymanagement.com.au - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from moneymanagement.com.au Daily Mail and Mail on Sunday newspapers.
CEO Brett Cairns explained a product design that essentially formalises a basic investment strategy – setting aside a cash reserve "to help support income in fall-back positions". Investors will be blocked from retrieving their contribution to the cash bucket, however.
The fund had only two access points, either via the traditional application and redemption process or via stock exchange Chi-X, but the firm hoped to have it added to platforms in the future.
Managed by Paddy McCrudden, Magellan head of retirement solutions and data science, the expected annual yield was 4.24%, with a management fee of 1% pa and no performance fee.
Brett Cairns, Magellan chief executive, said being able to offer this on an exchange was important for the fund.
“When you sell something on exchange, you’re transferring the unit to someone and not redeeming it, so those reserves and the benefit of those reserves carries with it [to the next holder],” Cairns said.