KEY POINTS:
What is it called and what sort of savings product is it?
Magellan Global Fund is an Australian unit trust investing in large capitalisation shares.
What is the company behind it?
Magellan is a boutique manager with an ASX-listed global fund and an infrastructure fund. Currently the company has a market capitalisation of about $150 million and $420m in funds under management.
Who is the target market?
Investors wanting to invest in a specialised and focused global equity fund.
What return does it offer?
No returns are promised. However, the managers aim to achieve superior risk-adjusted investment returns over the medium to long-term and to minimise the risk of permanent capital loss.
When was it launched?
June 2007.
What other products is it like or is it competing with?
There are plenty of international share funds available to investors. This one differentiates itself as unashamedly Magellan and models its investment approach on that of Warren Buffett, of Berkshire Hathaway fame.
Is it long term, short term or medium term?
Equity investments such as this should be held for the long term.
What is the unique selling point of this product?
The fund's investment approach is an appealing aspect of the fund for investors.
How strong a stomach do you need for it?
Since it's an equity fund, the risk is towards the higher end. However, it has been researched by Standard & Poors, which gives it a four-star rating. This means S&P has a high conviction that the manager will consistently generate risk-adjusted fund returns in excess of relevant investment objectives and relative to peers.
What's the hitch?
The key risks investors need to be aware of are the normal equity risks - that is the fund's value can fall as well as rise - and the changes in returns could be more noticeable as Magellan takes some large concentrated bets.
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