Magellan Financial Group Ltd · ASX:MFG
Magellan Financial — Investor Presentation (June 2021)
24 slides from Magellan Financial's investor presentation, Jun 1, 2021
Slide 1: Magellan FuturePay Launch Presentation
1 June 2021 ASX Limited For personal use only ASX Market Announcements Office Exchange Centre 20 Bridge Street Sydney NSW 2000 MAGELLAN FUTUREPAYTM LAUNCH PRESENTATION Further to the announcement made on 26 May 2021, please see attached a presentation relating to Magellan FuturePay (“FuturePay”) whi
Slide 2: A growing monthly income, now and into the future
For personal use only A growing monthly income, now and into the future June 2021 Brett Cairns, CEO
Slide 3: For personal use only
Units in the fund referred to herein are issued by Magellan Asset Management Limited ABN 31 120 593 946, AFS Licence No. 304 301 (‘Magellan’). This For personal use only material must not be construed as investment advice or as an investment recommendation. This material does not take into account y
Slide 4: The challenge
For personal use only The challenge Magellan FuturePay | 3
Slide 5: Investing for income and growth
Investing for income and growth For personal use only Once savings have been accumulated, many investors face a challenge: How do you maintain ready access to your savings and invest to receive a regular and predictable income that keeps pace with inflation, without eroding your capital base? • Numb
Slide 6: What do retirees look for from their savings?
What do retirees look for from their savings? For personal use only Regular income that Capital growth to ensure Ready access to savings keeps up with inflation it lasts into the future if required which can to meet their everyday which is unknown and provide peace of mind costs of living and enjoy
Slide 7: Why is this difficult to achieve?
Why is this difficult to achieve? Because the desired attributes result in competing goals For personal use only • Obtaining predictable income often means accepting lower income, with limited or no growth • Investing for growth, often means accepting less predictable income and increased risk • Ins
Slide 8: Source of the problem
Source of the problem For personal use only • At the heart of this problem is market volatility • When accumulating, volatility is your friend: − Adding regular amounts helps when prices are low − More invested, more compounding − Dollar Cost Averaging • When withdrawing, it’s the opposite – volatil
Slide 9: How to manage the problem: Portfolio
How to manage the problem Portfolio For personal use only Temptation is to remove volatility from the investments, but left with no little or no growth and eroding capital • So reducing volatility in the portfolio without sacrificing growth is a key step; and • A focus on downside protection in part
Slide 10: How to manage the problem: Structural
How to manage the problem Structural For personal use only • Bucketing – cash bucket sized in time • Reserving strategy – powerful risk management tool, but not easy to do: − When to reserve? − How much to reserve? − When to use reserves? How much? − Biases RP217 Magellan FuturePay | 9
Slide 11: The goal
The goal For personal use only To develop a single product that captures these risk management techniques and balances the competing objectives effectively and efficiently RP217 Magellan FuturePay | 10
Slide 12: Introducing Magellan FuturePay
For personal use only Introducing Magellan FuturePay Magellan FuturePay | 11
Slide 13: Magellan FuturePay
Magellan FuturePay An actively managed fund that aims to deliver… For personal use only A predictable monthly Driven by returns and Underpinned by a Together with daily income that grows with capital growth, with a reserving strategy and access to your capital inflation (fixed dollar focus on downsi
Slide 14: Solving for market volatility
Solving for market volatility FuturePay approaches the management of sequencing risk in two ways: For personal use only Low volatility investing Reserving strategy and income support • FuturePay utilises Magellan’s proven track • Building a pool of reserves that can provide record of investing in lo
Slide 15: How does it work? 1. When you invest in FuturePay
How does it work? 1. When you invest in FuturePay For personal use only • Upon direct investment, FuturePay will contribute a relatively small amount of capital to the Support Trust • Invests in a portfolio of high quality global equity and global listed infrastructure companies RP217 Magellan Futur
Slide 16: How does it work? 2. During your investment in FuturePay
How does it work? 2. During your investment in FuturePay For personal use only 2.03 cents 2.03 cents per unit per unit 15-Jul-21 15-Aug-21 15-Sep-21 15-Oct-21 15-Nov-21 15-Dec-21 15-Jan-22 15-Feb-22 During your investment, FuturePay aims to deliver you a predictable monthly income that grows with in
Slide 17: How does it work? 2. During your investment (cont'd)
How does it work? 2. During your investment in FuturePay (cont’d) For personal use only In rising markets In falling markets FuturePay will reserve some portion of its outperformance FuturePay may receive income support from the Support to the Support Trust Trust to assist FuturePay in delivering th
Slide 18: How does it work? 3. If you exit FuturePay
How does it work? 3. If you exit FuturePay For personal use only • If you choose to directly redeem your FuturePay holding, your exit price will generally reflect the value of FuturePay’s investment portfolio • You leave behind the value of the benefit provided by the Support Trust, which is retaine
Slide 19: The Support Trust
The Support Trust For personal use only • Discretionary Trust, with FuturePay as a beneficiary, MFG entity is trustee • Acts like a mutual fund – funded by investors in FuturePay and exists for the benefit of investors in FuturePay • Upfront contribution on investment • Ongoing contributions from in
Slide 20: Partnership with Magellan Financial Group
Partnership with Magellan Financial Group For personal use only • Building reserves over time is important, particularly at the beginning • Magellan Financial Group (MFG) recognises this and will commit its own capital to help kick start the Support Trust • MFG has set aside A$50 million to be incre
Slide 21: Distribution Facts
Distribution Facts For personal use only • Monthly Distribution • Ex date at the end of each month frequency • Paid on the 15th of each month, paid early if not a business day Target Monthly • 2.03 cents per unit at inception, growing at inflation quarterly Income • Current income yield ~4.25%1 p.a.
Slide 22: How to access FuturePay
How to access FuturePay An actively managed, listed fund (APIR: MGE9989AU / Ticker: FPAY) For personal use only • Like many of Magellan’s funds it has two access points: − Via application/redemption directly with the fund (through the unit registry) − Via the Chi-X securities exchange (Ticker: FPAY)
Slide 23: Summary
Summary The goal: To develop a single product that captures important portfolio and structural risk For personal use only management techniques and balances the competing objectives effectively and efficiently Magellan solution: FuturePay is an actively managed fund that aims to deliver: A predictab
Slide 24: Thank you – Q&A
Thank you – Q&A For personal use only www.magellanfuturepay.com.au Phone: +61 2 9235 4888
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