An actively constructed, systematically managed and continuously monitored ESG-focused portfolio of 70-90 of the world’s best businesses, leveraging Magellan’s quality investment research capabilities, investment philosophy and proven ESG framework.Invest Now
A diversified global equities portfolio of 70-90 of the world’s best companies – those with sustainable competitive advantages and business models that meet our nuanced and proven ESG risk assessment process.
What does ESG and sustainable investing really mean? Read our new flyer 'Making sense of Sustainable and ESG investing'.Find out more (PDF)
These competitive advantages enable them to continually earn excess returns above their cost of capital. Constructed using Magellan’s long-standing proven investment process, the investment team conducts extensive fundamental research to assess a company’s economic moat, potential impacts of disruption, ESG risks and opportunities, value, and key risks and exposures. The portfolio is systematically rebalanced on a quarterly basis using these inputs. It is not the manager’s intention to hedge the foreign currency exposure of the Fund arising from investments in overseas markets.
The MFG Core ESG Fund seeks to achieve attractive risk-adjusted returns over the medium to long term through investment in a diversified portfolio of high quality companies. This objective incorporates consideration of environmental, social and governance risks and the application of a proprietary low carbon framework.
Meet the Portfolio Manager: Elisa Di Marco(viewing time: 9:26 mins)
Magellan has always had a consideration for ESG factors, with ESG embedded in its investment process since the start of the business in 2007.
From day one, we've invested in businesses based on quality and risk. ESG is a fundamental pillar of risk assessment, and a key part of how we invest. Over the last 5 years Magellan’s ESG team has further honed this investment philosophy and built a unique proprietary low carbon framework, designed from the ground up to solve for carbon and ESG risks. Our ESG philosophy is simple in idea, but nuanced and considered in execution. We seek to identify ESG risk factors that may have a material impact on cashflows or valuation.
ESG investing is a broad topic that encapsulates the Environmental, Social and Governance risks and opportunities that a company and industry is exposed to. There are many nuances and lenses through which ESG investing is defined and assessed as the requirements, technology and expectations differ by investor, company, sub-industry and geography.
At Magellan, we consider factors that may have a wide-ranging, long-term impact on our society. Our philosophy and process are not constrained by a checklist, or by ticking boxes. Instead, we focus on the future, by investing in companies we believe to have a sustainable competitive advantage and that do not have a detrimental impact on the environment or our lives.
The Magellan proprietary ESG risk framework, assesses the degree to which ESG factors have a material impact on cashflows. The approach is nuanced and thoughtful, acknowledging and engaging with the complexities of ESG investing.
ESG risk assessment
Bottom up approach to the assessment of ESG risk. Our approach is active, balanced and nuanced. Scores are forward looking, reviewed by the Investment Committee and actively monitored.
Low carbon framework
Exclusions based on carbon intensity and carbon exposure (e.g. high exposure to fossil fuels). This limits the explicit risk and exposure to decarbonisation.
ESG portfolio exclusions
We exclude companies in controversial industries that we view as higher risk to causing a detrimental impact on society, for example high-roller gambling, alcohol and tobacco.
Active engagement in proxy voting and engagement with companies on material ESG issues that are of concern to Magellan. Engagement on Governance reflects our explicit policies; Environmental and Social outreach is company and issue specific.
All management costs described above are inclusive of the estimated net effect of GST.
* As at 31 December 2020
** The iNAV reflects the estimated NAV per Unit updated for portfolio stocks or equivalent securities that have live market prices during the Trading Day. The iNAV will not be updated for market-based movements such as movements in stock market indices.
At Magellan, when investing we ask ourselves, what does the future look like?
We regard the identification of a business’s economic moat, or sustainable competitive advantage as key to investing with a long-term horizon. Identifying businesses with strong moats, sensible management, the ability to invest capital at high rates of return and with discernible tailwinds, means we are positioning our portfolio towards those businesses that are most likely to succeed and thus enabling better outcomes for our investors.
The investment process is predicated on building in-depth knowledge and expertise on the economics and key risk considerations of each business within our universe.
Born out of Magellan’s investment research DNA, the MFG Core ESG Fund focuses on five key factors when identifying the universe and assessing businesses, including our proprietary ESG risk assessment process.
Risk Assessment: Utilise sensible strategies to reduce exposure to material specific downside risks.
As the world is always changing, high quality companies may have their, competitive advantage eroded as a result of technology, evolving competitive threats, changes in consumer behaviour or other factors. As a result, the investment universe for the fund is comprised only of companies that meet our considered definitions. These definitions aim to identify companies that meet our definition of an acceptable ESG risk profile, the existence of an economic moat and resilience to disruption based on our proprietary research of each company. Via rigorous fundamental research, this forward-looking approach seeks to identify high quality companies with sustainable business practices and reduce ESG risk exposure.
Using our proprietary MFG Core Series scoring framework, stocks that qualify under our in-depth assessment of quality are scored on the basis of their competitive advantages and resilience to, or opportunities from, disruption.
Each company is then also scored on the basis of valuation, based on stock and industry specific considerations, including sustainable growth opportunities, returns on capital, cash generation and of course ESG risks. This is not a simple assessment of low vs high PE which on its own can often be a poor guide to the best investments on a forward-looking basis.
This process requires rigorous fundamental analysis of each business and industry and a qualitative assessment of key risks including those related to debt, valuation and idiosyncratic event risk.
These active portfolio construction inputs are then synthesized into a systematic portfolio management process where high scoring companies are included in the portfolio subject to considerations of geographic and industry exposure and specific risk assessments.
Elisa Di Marco joined Magellan in 2015 with responsibility for research coverage in the financials sector. In 2019, Elisa joined the Core Series team and in 2020 Elisa joined the ESG team and was appointed PM of the MFG core ESG fund. Prior to Magellan, Elisa spent two years as an analyst at APRA, primarily stress testing and supervising Australian financial institutions. Elisa also worked at Macquarie Group as an equity analyst covering banks and at NYSE Euronext Paris in surveillance and research.
Elisa holds a Bachelor of Commerce (Honours) from the University of Wollongong and a Doctor of Philosophy from the University of New South Wales.
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Note: Magellan accepts initial direct investments from individuals with a minimum of $10,000. You must be over 18 years of age.