However, by the end of 2020, both firms had dropped out of the fund’s largest top five holdings and it now held no exposure.
In a webcast, chief investment officer, Nick Griffin, said: “Regulatory threats are going through in China and that is concerning.
“Alibaba was our largest position, we were very excited about the Ant Financial IPO and we also held Tencent. But we put a stop loss in place in February where we monitored the stocks for 30 days and every time we looked at it, we couldn’t say what would happen.
“We are not saying we dislike China but we will stick to the sidelines for now.”
“We expect to continue to reap the benefits of digitalisation, as our holdings in the digital enterprise, digital payments and e-commerce areas should continue to deliver a strong upcoming earnings results and provide bullish outlook statements. The habits formed in 2020 during the pandemic are likely to stick and lead to an acceleration of growth in many of these areas,” he said.
“There is a long growth runway for companies in the digital areas of interest and the runway’s visibility has become clearer because of the pandemic as we have seen growth rates accelerate and the size of market opportunities expand.”
“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.