ASX share review: Magellan Financial Group (ASX: MFG)

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Australian Finance Podcast 39 min 2 speakers 8 chapters transcribed 3 months ago
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What is the main topic discussed in this episode?

Owen Rask 0:00
Property investors often talk about using debt to build wealth. In the share market, that's called gearing. With the BetaShares WealthBuilder range, investors can access moderate gearing into shares, and with the newly launched GG-BL, That means exposure to a diversified portfolio of around 1,300 global companies excluding Australia, all with no loan applications, credit checks, or margin calls. Gearing magnifies both gains and losses, so it's only suitable for investors with a very high tolerance for risk. You can learn more about the WealthBuilder range of ETFs at the BetaShares website. And don't forget to read the PDS and TMD to decide if it's right for you. BetaShares Capital Limited is the issuer.
Owen Rask 0:45
Here's something worth knowing if you've been meaning to make the switch to a better broker. To celebrate their fifth birthday, Perla are offering three free trades a month for five months if you transfer your portfolio across with a minimum of $1,000.

What does Magellan Financial Group do?

Owen Rask 0:57
For anyone investing regularly, that's meaningful savings on brokerage that can stay invested instead. Perla is chess-sponsored, built specifically for long-term investors, and now has over $3 billion invested on the platform. If you've been with a platform that doesn't quite fit your strategy anymore, it might be time to take a look. You'll find all of the details at perla.com slash LP slash RASC. That's perla.com slash LP slash RASC. Hey there, here's a quick note. This podcast contains general financial advice only. That means it's not specific to you, your needs, goals or objectives. So don't act on the information until you've spoken with your financial advisor. You'll find our full disclosure, disclaimer and link to our financial services guide in the show notes.
Owen Rask 1:43
Kate Campbell, how are you today? I'm good, Owen. I'm surviving. Oh, that's very good of you. Surviving is probably a pretty low bar, but we'll take it. So today we're talking about Magellan Financial Group. This trades on the ASSEX under the ticker symbol MFG. It's a company you can buy shares in. So this is our shares episode. Tell us a little bit more about this episode.

What investment strategies does Magellan offer?

Owen Rask 2:09
This is like this type of episode on the Australian Finance Podcast.
Kate Campbell 2:12
Yeah, so every month we look into a share or an exchange traded fund as nominated by our audience in our Facebook community. So if you want to get involved in the future, definitely join that group. And what I did last month was took the five most popular companies from Rask Media that people are looking at. I added a poll onto our Facebook community and Magellan Financial Group was the clear winner. However, I didn't... lock that poll from future suggestions. So the audience in our Facebook community added lots of their own suggestions and Xero was a crowd pick and also came second. So I'm thinking that not next month, but the following one, we will do a deep dive onto Xero because it was the runner up.
Kate Campbell 2:56
And so, yeah, this isn't a recommendation from the Rask Australia team. We do not have a current recommendation on Magellan. We've just chosen it based off user data and what's being picked in the Facebook community. I probably just wanted to note at the very front that Magellan, as we'll get into, has been having a lot of challenges recently.
Owen Rask 3:20
There is a lot going on at Magellan right now. We're going to try and break it down for you to keep it really simple. So why don't we just start off with, well, what does Magellan do? Magellan is a company that invests other people's money. So let's say, for example, you want to invest in the stock market, but you don't want to do it yourself. What you can do is you can go to Magellan and you can say, here you go, Magellan, I'll BPAY or direct deposit $20,000 into your trust account and you can invest that money for me. And Magellan will take a fee for that.

Who are the key people behind Magellan Financial Group?

Owen Rask 4:00
They will take a fee for... the management of that money, which is like 1% or around about per year. And then if they do really well, they'll also take a performance fee. Why is a performance fee paid? A performance fee is paid because it incentivizes the fund manager, in this case, Magellan,

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