INTERIM FINANCIAL REPORT
FOR THE HALF YEAR ENDED 31 DECEMBER 2019
MAGELLAN GLOBAL EQUITIES FUND: ARSN 603 395 302
MAGELLAN GLOBAL EQUITIES FUND
Contents | ||
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MAGELLAN GLOBAL EQUITIES FUND
Chairman's Report
for the half year ended 31 December 2019
Chairman's Report
Dear Unitholders,
We are pleased to present the Interim Financial Report for Magellan Global Equities Fund (Managed Fund) (the "Fund"). The Fund is a managed investment scheme for which Magellan Asset Management Limited ("MAM") acts as both Responsible Entity and Investment Manager.
The Fund is quoted on the Australian Securities Exchange (ticker code: MGE) and commenced trading on 5 March 2015. As at 31 December 2019, the Fund had net assets of $1,649 million and a net asset value of $3.96 per unit.
The Fund's portfolio is actively managed by MAM and mirrors, to all intents and purposes, the unlisted Magellan Global Fund. MAM aims to achieve attractive risk-adjusted returns over the medium to long term for unitholders, while reducing the risk of permanent capital loss. To achieve this, the Fund invests in a portfolio of between 20 and 40 high-quality global equity stocks, as assessed by MAM, and has the ability to manage equity market risk by holding up to 20% of its net assets in cash. The portfolio is currency unhedged. For the six months to 31 December 2019, the Fund returned 8.2% net of fees. This compares to the return of the index (MSCI World Net Total Return Index (Australian Dollars)) of 9.0% over the same period.
We would encourage you to read our monthly and quarterly Fund Reports which provide valuable insight into our investment strategies and portfolio managers' thoughts. These are released on ASX and can also be found on our website: www.magellangroup.com.au.
As at 31 December 2019, the Fund consisted of investments in 26 companies, with the top 10 investments (listed below) representing 54.9% of the Fund. The Fund's cash position was 6% which was predominantly held in US Dollars. The Fund's industry exposure by source of revenues is highlighted below.
Top 10 holdings (as at 31 December 2019) | % of Fund |
Alphabet - class A and class C shares | 7.1 |
Microsoft | 6.8 |
Facebook - class A shares | 6.6 |
Alibaba Group Holding | 6.5 |
Starbucks | 5.7 |
Visa - class A shares | 5.3 |
LVMH | 4.7 |
Novartis | 4.2 |
Mastercard | 4.0 |
Yum! Brands | 4.0 |
Top 10 Total | 54.9 |
Industry Exposure by Source of Revenues | ||||
Cash, 6% | Consumer Defensive, | |||
Infrastructure, 11% | 13% | |||
Financials, 1% | Restaurants, | |||
11% | ||||
Payments, 9% | ||||
Health Care, | ||||
Consumer | 7% | |||
Discretionary, | ||||
8% | Internet & | |||
Information | eCommerce, | |||
22% | ||||
Technology, | 12% | |||
The following report contains relevant financial statements and information which we encourage you to read carefully.
Robert Fraser
Chairman
27 February 2020
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MAGELLAN GLOBAL EQUITIES FUND
Responsible Entity's Report
for the half year ended 31 December 2019
Responsible Entity's Report
The Directors of Magellan Asset Management Limited (ABN 31 120 593 946) ("MAM"), the Responsible Entity of Magellan Global Equities Fund ("the Fund" or "MGE") present their half year report on the Fund for the period ended 31 December 2019.
1. Directors
The following persons were Directors of MAM during the period and up to the date of this report:
Name | Directorship | Appointed | ||
Brett Cairns | Chief Executive Officer | 22 | January 2007 | |
John Eales | Non-Executive Director | 1 | July 2017 | |
Robert Fraser | Chairman | 23 | April 2014 | |
Paul Lewis | Non-Executive Director | 20 | December 2006 | |
Hamish McLennan | Non-Executive Director | 1 | March 2016 | |
Kirsten Morton | Chief Financial Officer | 5 | October 2018 | |
Karen Phin | Non-Executive Director | 23 | April 2014 | |
2. Principal Activity
The Fund is a registered managed investment scheme domiciled in Australia and quoted on the Australian Securities Exchange ("ASX") under the AQUA Rules (ticker code MGE). It was registered on 24 December 2014 and commenced trading on 5 March 2015.
The Fund invests in a portfolio of between 20 and 40 high quality global equity stocks. To achieve this MAM undertakes rigorous company research to identify what it assesses to be high quality companies combined with an assessment of the macro-economic environment and a disciplined risk controlled approach to portfolio construction. The Fund has the ability to manage equity market risk by holding up to 20% of its net assets in cash. It can use foreign exchange contracts to facilitate settlement of stock purchases. It is not the Responsible Entity's intention to hedge the foreign currency exposure of the Fund arising from investments in overseas markets.
The Fund's investment objectives are to achieve attractive risk-adjusted returns over the medium to long term, while reducing the risk of permanent capital loss, in accordance with its investment strategy (as detailed in the current Product Disclosure Statement, issued 18 November 2019).
MAM, as Responsible Entity, is responsible for overseeing the operations of the Fund. As the Investment Manager, it is responsible for selecting and managing the assets of the Fund. In addition, the Responsible Entity, on behalf of the Fund, may also provide trading liquidity to investors on the ASX under the AQUA Rules by acting as a buyer and seller of units in the Fund. The Responsible Entity has appointed an independent market participant to act as its agent to execute its market making activities.
The Fund's principal place of business is Level 36, 19 Martin Place, Sydney, New South Wales 2000.
3. Significant Changes In State Of Affairs
There were no significant changes in the state of affairs of the Fund during the period.
4. Distribution
No distribution was declared for the period ended 31 December 2019 (December 2018: nil).
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MAGELLAN GLOBAL EQUITIES FUND
Responsible Entity's Report
for the half year ended 31 December 2019
5. Review Of Financial Results And Operations
- Financial Results For The Period
The performance of the Fund, as represented by the results of its operations for the periods ended 31 December, was as follows:
31 December | 31 December | ||
2019 | 2018 | ||
Results | |||
Total net investment income ($'000) | 128,744 | 22,319 | |
Total expenses ($'000) | 11,720 | 8,975 | |
Profit/(Loss) ($'000) | 117,024 | 13,344 | |
Net Asset Value ("NAV") Per Unit ($) | (A) | 3.9609 | 3.1873 |
- The NAV Per Unit represents the net assets of the Fund presented in the Statement Of Financial Position at balance date divided by the number of units on issue at balance date (refer Note 4 and Note 6 to the financial statements).
- Total Indirect Cost Ratio ("ICR")
The ICR, for the 6 and 12 months ended 31 December, is the ratio of the Fund's actual management costs over the average portfolio value, expressed as a percentage. Management costs, accrued within the Fund's unit price on a daily basis, include management, administration and performance fees but do not include transactional and operational costs such as brokerage or foreign withholding tax.
6 months to | 6 months to | 12 months to | 12 months to | |
31 December | 31 December | 31 December | 31 December | |
2019 | 2018 | 2019 | 2018 | |
Indirect Cost Ratio | ||||
Management fee (%) | 0.68 | 0.68 | 1.35 | 1.35 |
Performance fee (%) | 0.00 | 0.02 | 0.10 | 0.21 |
Total Indirect Cost Ratio (%) | 0.68 | 0.70 | 1.45 | 1.56 |
- Performance Returns
The performance returns for the 6 and 12 months ended 31 December shown using the NAV per unit for the Fund, which is after fees and expenses, assuming The returns are calculated daily, compounded to produce longer period returns.
in the table below have been calculated the reinvestment of distributions at NAV.
6 months to | 6 months to | 12 months to | 12 months to | |||
31 December | 31 December | 31 December | 31 December | |||
2019 | 2018 | 2019 | 2018 | |||
Performance | (A) | |||||
Growth return (%) | 8.2 | 1.4 | 24.3 | 6.4 | ||
(B) | ||||||
Distribution return (%) | - | - | 3.7 | 3.2 | ||
Total Return (%) | (C) | 8.2 | 1.4 | 28.0 | 9.6 | |
(A)
(B)
(C)
The Growth return is calculated daily as a percentage by dividing the NAV per unit (ex-distribution) by the previous day's NAV per unit (ex-distribution) minus 1; the daily Growth returns are then compounded to produce longer period returns.
The Distribution return is calculated as a percentage by subtracting the Growth return from the Total return.
The Total return is calculated daily as a percentage by dividing the NAV per unit (cum-distribution) by the previous day's NAV per unit (ex-distribution) minus 1; the daily Total return are then compounded to produce longer period returns.
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MAGELLAN GLOBAL EQUITIES FUND
Responsible Entity's Report
for the half year ended 31 December 2019
5. Review Of Financial Results And Operations (continued)
- Performance Returns (continued)
Performance fees are calculated on six monthly measurement periods ending on 30 June and 31 December of each year. The Responsible Entity's entitlement to a performance fee is dependent on the Fund exceeding both index relative and absolute return hurdles over a given measurement period, as well as exceeding the applicable high watermark and an overall cap. Performance fees crystallise at the end of a measurement period. Further details of the performance fees can be found in the Fund's Product Disclosure Statement which is available at www.magellangroup.com.au.
- Strategy And Future Outlook
The Fund's investment objective is unchanged. The results of the Fund's operations will be affected by a number of factors, including the performance of investment markets in which the Fund invests. Therefore, investment performance is not guaranteed and future returns may differ from past returns. As investment conditions change over time, past returns should not be used to predict future returns.
As markets are subject to fluctuations, it is imprudent to provide a detailed outlook statement of expected results of operations. The Fund provides monthly fund updates, quarterly portfolio disclosure and annual investor reports, which can be found in 'Our Funds' section of the Magellan Financial Group Limited website, www.magellangroup.com.auand also the ASX website. The Fund updates and investor reports include detailed discussions in relation to some investee companies from time to time along with general outlook commentary.
6. Interest In The Fund
The movement in units on issue in the Fund is disclosed in Note 4 to the financial statements.
7. Likely Developments And Expected Results Of Operations
The Fund will continue to invest in companies and businesses in accordance with the investment strategy as set out in the Product Disclosure Statement. The method of operating the Fund is not expected to change in the foreseeable future however the results of the Fund's operations may be affected by a number of factors, including the performance of investment markets in which the Fund invests. Investment performance is not guaranteed and past returns should not be used to predict future returns.
8. Subsequent Events
In a release to the ASX on 5 February 2020, the Fund reported a NAV per unit of $4.2206 and 421,457,945 units on issue as at 31 January 2020.
Other than the items disclosed throughout this Interim Financial Report and the above there have been no matters or circumstances arising after the end of the period that have significantly affected, or may significantly affect, the Fund's operations, the results of its operations, or the Fund's state of affairs in future financial periods. Asset prices move daily and daily unit prices are available on the Magellan Financial Group Limited website, www.magellangroup.com.auand also the ASX website.
9. Rounding Of Amounts
The Fund is of a kind referred to in the ASIC Corporations (Rounding in Financial/Directors' Reports) Instrument 2016/191 and consequently amounts in the Responsible Entity's Report have been rounded to the nearest thousand dollars in accordance with that Legislative Instrument, or in certain cases, the nearest dollar.
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MAGELLAN GLOBAL EQUITIES FUND
Responsible Entity's Report
for the half year ended 31 December 2019
10. Auditor
A copy of the Auditor's Independence Declaration as required under section 307C of the Corporations Act 2001 is set out on the following page.
This report is made in accordance with a resolution of the Directors of the Responsible Entity.
Robert Fraser
Chairman
Sydney, 27 February 2020
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Ernst & Young | Tel: +61 2 9248 5555 |
200 George Street | Fax: +61 2 9248 5959 |
Sydney NSW 2000 Australia | ey.com/au |
GPO Box 2646 Sydney NSW 2001 |
Auditor's Independence Declaration
Auditor's Independence Declaration to the Directors of Magellan Asset Management Limited as the Responsible Entity of Magellan Global Equities Fund
As lead auditor for the review of the interim financial report of Magellan Global Equities Fund for the period ended 31 December 2019, I declare to the best of my knowledge and belief, there have been:
- no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the review; and
- no contraventions of any applicable code of professional conduct in relation to the review.
Ernst & Young
Clare Sporle
Partner
27 February 2020
A member firm of Ernst & Young Global Limited
Liability limited by a Scheme approved under Professional Standards Legislation
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MAGELLAN GLOBAL EQUITIES FUND
Statement Of Profit Or Loss And Comprehensive Income
for the half year ended 31 December 2019
Statement Of Profit Or Loss And Comprehensive Income
31 December | 31 December | ||
2019 | 2018 | ||
Note | $'000 | $'000 | |
Investment Income | |||
Dividend and distribution income | 8,447 | 6,551 | |
Interest income | 885 | 1,771 | |
Net change in fair value of investments | 119,165 | 3,917 | |
Net gains/(losses) on foreign exchange settlements, | |||
derivative contracts and cash | 247 | 10,080 | |
Total Net Investment Income | 128,744 | 22,319 | |
Expenses | |||
Management fees | 10,444 | 7,774 | |
Performance fees | 40 | 210 | |
Settlement processing fees | - | 40 | |
Transaction costs | 60 | 12 | |
Withholding tax on dividends | 1,176 | 939 | |
Total Expenses | 11,720 | 8,975 | |
Profit/(Loss) | 117,024 | 13,344 | |
Other comprehensive income | - | - | |
Total Comprehensive Income | 117,024 | 13,344 | |
Basic Earnings Per Unit (Cents) | 5 | 29.50 | 3.85 |
Diluted Earnings Per Unit (Cents) | 5 | 29.50 | 3.85 |
The above Statement Of Profit Or Loss And Comprehensive Income should be read in conjunction with the accompanying notes to the financial statements.
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MAGELLAN GLOBAL EQUITIES FUND
Statement Of Financial Position
as at 31 December 2019
Statement Of Financial Position
31 December | 30 June | |||
2019 | 2019 | |||
Note | $'000 | $'000 | ||
Assets | ||||
Cash and cash equivalents | 98,721 | 112,412 | ||
Receivables | 5,803 | 3,455 | ||
Investments | 3 a) | 1,553,407 | 1,321,983 | |
Total Assets | 1,657,931 | 1,437,850 | ||
Liabilities | ||||
Payables | 8,803 | 6,330 | ||
Distribution payable | - | 41,745 | ||
Total Liabilities | 8,803 | 48,075 | ||
Total Unitholders' Equity | 1,649,128 | 1,389,775 | ||
The above Statement Of Financial Position should be read in conjunction with the accompanying notes to the financial statements.
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MAGELLAN GLOBAL EQUITIES FUND
Statement Of Changes In Equity
for the half year ended 31 December 2019
Statement Of Changes In Equity
31 December | 31 December | |
2019 | 2018 | |
$'000 | $'000 | |
Unitholders' Equity At The Beginning Of The Period | 1,389,775 | 1,051,601 |
Transactions with unitholders in their capacity as owners: | ||
Units issued | 159,982 | 100,291 |
Units issued under distribution reinvestment plan | 2,330 | 3,595 |
Units redeemed | (19,983) | (35,177) |
Total transactions with unitholders | 142,329 | 68,709 |
Comprehensive income for the period: | ||
Profit/(loss) | 117,024 | 13,344 |
Other comprehensive income | - | - |
Total comprehensive income for the period | 117,024 | 13,344 |
Total Unitholders' Equity At The End Of The Period | 1,649,128 | 1,133,654 |
The above Statement Of Changes In Equity should be read in conjunction with the accompanying notes to the financial statements.
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MAGELLAN GLOBAL EQUITIES FUND
Statement Of Cash Flows
for the half year ended 31 December 2019
Statement Of Cash Flows
31 December | 31 December | |
2019 | 2018 | |
$'000 | $'000 | |
Cash Flows From Operating Activities | ||
Dividends and distributions received (net of withholding tax) | 6,724 | 5,656 |
Interest received | 999 | 1,646 |
Management and performance fees paid | (11,509) | (9,734) |
Settlement processing fees paid | - | (40) |
Other expenses paid | (60) | (12) |
Net Cash Inflows/(Outflows) From Operating Activities | (3,846) | (2,484) |
Cash Flows From Investing Activities | ||
Purchase of investments | (442,925) | (130,564) |
Proceeds from sale of investments | 332,940 | 102,040 |
Cash flows from settlement of foreign exchange contracts | 4,061 | 7,776 |
Net Cash Inflows/(Outflows) From Investing Activities | (105,924) | (20,748) |
Cash Flows From Financing Activities | ||
Receipts from issue of units | 158,953 | 99,578 |
Payments for redemption of units | (19,983) | (35,177) |
Distributions paid | (39,415) | (28,545) |
Net Cash Inflows/(Outflows) From Financing Activities | 99,555 | 35,856 |
Net Increase/(Decrease) In Cash And Cash Equivalents | (10,215) | 12,624 |
Cash and cash equivalents at the beginning of the period | 112,412 | 197,949 |
Effect of exchange rate fluctuations on cash and cash equivalents | (3,476) | 2,239 |
Cash And Cash Equivalents At The End Of The Period | 98,721 | 212,812 |
The above Statement Of Cash Flows should be read in conjunction with the accompanying notes to the financial statements.
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MAGELLAN GLOBAL EQUITIES FUND
Notes To The Financial Statements
for the half year ended 31 December 2019
Notes To The Financial Statements
Overview
Magellan Global Equities Fund ("the Fund") is a registered managed investment scheme under the Corporations Act 2001 and is admitted to trading status on the ASX under the AQUA Rules. The Fund was registered on 24 December 2014 and in accordance with the Fund's Constitution, commenced on the date that the first unit was issued, which was 5 March 2015. The Fund terminates on the day immediately preceding the 80th anniversary of the date of commencement, unless terminated earlier in accordance with the Fund's Constitution.
Magellan Asset Management Limited (ABN 31 120 593 946) is the Responsible Entity of the Fund.
This financial report was authorised for issue by the Directors of the Responsible Entity on 27 February 2020. The Directors have the power to amend and reissue this financial report.
The Fund is considered a for-profit unit trust for the purpose of this interim financial report.
1 Basis Of Preparation
1. Basis Of Preparation
The condensed interim financial report is a general purpose financial report, presented in Australian Dollars, and has been prepared in accordance with AASB 134 Interim Financial Reporting, the Corporations Act 2001, other mandatory professional reporting requirements and the Fund's Constitution.
The condensed interim financial report does not include all the information and disclosures normally included in the annual financial report. Accordingly, this report should be read in conjunction with the 30 June 2019 Annual Report and any public announcements made during the period.
The Statement Of Financial Position is presented on a liquidity basis. Assets and liabilities are presented in decreasing order of liquidity and are not distinguished between current and non-current. All balances are expected to be recovered or settled within 12 months, except for financial assets and liabilities at fair value through profit or loss. These fair value assets and liabilities comprise mainly investments that are managed based on the economic circumstances at any given point in time, as well as to meet any liquidity requirements. Consequently, the investments that may be realised within 12 months cannot be determined at reporting date.
All amounts in the financial statements are rounded to the nearest thousand dollars ($'000) or in certain cases, the nearest dollar, unless otherwise stated in accordance with the ASIC Corporations (Rounding in Financial/Directors' Reports) Instrument 2016/191.
- Accounting Policies
The accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period except for the adoption of new standards that are described in Note 1 b). The Fund has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective.
- New And Amended Accounting Standards
There are no standards, interpretations or amendments to existing standards that are effective as of 1 July 2019 that have a material impact on the amounts recognised in the prior periods or will affect the current or future periods.
- Critical Accounting Estimates And Judgements
The preparation of the financial statements requires the Directors to make judgements, estimates and assumptions that affect the amounts reported in the financial statements. The Directors base their judgements and estimates on historical experience and various other factors they believe to be reasonable under the circumstances, but which are inherently uncertain and unpredictable, the result of which forms the basis of the carrying values of assets and liabilities. As such, actual results could differ from those estimates.
Where listed equities have no active market the Directors determine fair value with reference to external observable information and conditions existing at reporting date. Fair values may however move materially with movements in market prices (refer Note 3). As most investments are valued with reference to the listed quoted prices and the Fund's cash is held with strongly rated financial institutions, the Fund's financial assets are not subject to significant judgement or complexity nor are the Fund's liabilities.
13
MAGELLAN GLOBAL EQUITIES FUND
Notes To The Financial Statements
for the half year ended 31 December 2019
2 Distributions To Unitholders
2. Distributions To Unitholders
No distribution was declared for the period ended 31 December 2019 (December 2018: nil).
A distribution of 11 cents per unit, amounting to $41,745,000 for the year ended 30 June 2019 was paid on 29 July 2019.
3 Investments
3. Investments
Fair Value Disclosures
The Fund classifies the fair value measurements of financial assets and financial liabilities using the three level fair value hierarchy set out below to reflect the source of valuation inputs used when determining the fair value:
- Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities. The fair value of level 1 securities is based on the closing price for the security as quoted on the relevant exchange.
- Level 2: valuation techniques using observable inputs either directly (as prices) or indirectly (derived from prices). The fair value of derivatives is based on a discounted cash flow analysis using quoted market inputs (spot and forward rates, volatility) adjusted for specific features of the instruments and applied debit and credit valuation adjustments based on the Fund's, or the derivative counterparties', current credit worthiness.
- Level 3: valuation techniques using non-market observable inputs.
31 December | 30 June | |
2019 | 2019 | |
$'000 | $'000 | |
a) Investments (Level 1) | ||
International listed equity securities: | ||
- United States | 1,143,022 | 1,037,599 |
- Switzerland | 125,380 | 108,279 |
- France | 78,321 | 30,062 |
- United Kingdom | 60,962 | 51,476 |
- Germany | 59,455 | 65,461 |
- China | 35,179 | - |
- Belgium | 30,091 | 14,842 |
- Netherlands | 20,997 | 14,264 |
Total Investments | 1,553,407 | 1,321,983 |
The Fund does not hold any level 2 or 3 assets. There have been no transfers between any of the three levels in the hierarchy during the period and the Fund's policy is to recognise transfers into and out of fair value hierarchy levels as at balance date.
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MAGELLAN GLOBAL EQUITIES FUND
Notes To The Financial Statements
for the half year ended 31 December 2019
3. Investments (continued)
The equity securities by domicile of primary stock exchange listing held by the Fund are:
Company Name | Domicile of | 31 December | 30 June |
Principal | 2019 | 2019 | |
Exchange Listing | $'000 | $'000 | |
Microsoft | United States | 111,617 | 104,072 |
Facebook - class A shares | United States | 108,222 | 96,537 |
Alibaba Group Holding | United States | 106,883 | - |
Alphabet - class C shares | United States | 105,375 | 72,368 |
Starbucks | United States | 93,886 | 83,644 |
Visa - class A shares | United States | 88,262 | 84,535 |
LVMH | France | 78,321 | 30,062 |
Novartis | Switzerland | 69,433 | 57,661 |
MasterCard | United States | 66,784 | 62,748 |
Yum! Brands | United States | 66,395 | 56,626 |
Reckitt Benckiser | United Kingdom | 60,962 | 51,476 |
SAP | Germany | 59,455 | 65,461 |
Nestle | Switzerland | 55,947 | 50,618 |
Xcel Energy | United States | 55,513 | 13,966 |
Crown Castle International | United States | 52,193 | 44,984 |
HCA Holdings | United States | 50,862 | 66,844 |
Estee Lauder | United States | 45,775 | 14,814 |
Pepsico | United States | 40,574 | 36,801 |
WEC Energy Group | United States | 37,376 | 13,975 |
Eversource Energy | United States | 35,189 | - |
Tencent | China | 35,179 | - |
Anheuser-Busch | Belgium | 30,091 | 14,842 |
Apple | United States | 27,484 | 77,516 |
McDonald's | United States | 22,589 | 22,811 |
Heineken | Netherlands | 20,997 | 14,264 |
CME Group | United States | 15,469 | 14,348 |
Alphabet - class A shares | United States | 12,574 | 9,724 |
Oracle | United States | - | 57,190 |
American Express | United States | - | 38,233 |
Lowe's | United States | - | 33,316 |
Berkshire Hathaway | United States | - | 32,547 |
Total Equity Securities | 1,553,407 | 1,321,983 |
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MAGELLAN GLOBAL EQUITIES FUND
Notes To The Financial Statements
for the half year ended 31 December 2019
4 | Unitholders' Equity | ||
4. | Unitholders' Equity | ||
6 months to | 12 months to | ||
31 December | 30 June | ||
2019 | 2019 | ||
No. of units | No. of units | ||
'000 | '000 | ||
a) Units On Issue | |||
Opening balance - 1 July | 379,496 | 334,812 | |
Units issued | 41,483 | 58,109 | |
Units issued under DRP | 619 | 1,113 | |
Units redeemed | (5,243) | (14,538) | |
Units On Issue At End Of The Period | 416,355 | 379,496 |
Terms And Conditions Of Units
Each unit confers upon the unitholder an equal interest in the Fund, and is of equal value to other units in the Fund. A unit does not confer upon the holder any interest in any particular asset or investment of the Fund. The rights of unitholders are contained in the Fund's Constitution and include:
- the right to receive a distribution determined in accordance with the provisions of the Fund's Constitution;
- the right to attend and vote at meetings of unitholders;
- the right to participate in the termination and winding up of the Fund; and
- the right to redeem units, subject to restrictions disclosed in the Fund's Product Disclosure Statement. Those restrictions may include where trading in units on the ASX are suspended for five consecutive business days. In this case, unitholders may apply to the Responsible Entity to make an off-market withdrawal of their investment from the Fund when the Fund is liquid. Where the Fund ceases to be liquid, units may only be withdrawn once an offer is made to all investors in the Fund in accordance with the Fund's Constitution.
There may be other circumstances where off-market withdrawals from the Fund are suspended for up to 28 days, including where:
- it is impracticable for the Responsible Entity, or the Responsible Entity is unable, to calculate the net asset value ("NAV") of the Fund;
-
the payment of withdrawal proceeds involves realising a significant portion of the Fund's assets which would, in the
Responsible Entity's opinion, result in remaining investors bearing a disproportionate amount of capital gains tax or expenses, or suffering any other disadvantage or diminution of the value of units held; - the Responsible Entity reasonably considers it would be in the interests of investors, or it is otherwise permitted by law; or
-
the Responsible Entity receives withdrawal requests of an aggregate value that in its reasonable estimate exceeds
5% of the Fund's assets.
There are no separate classes of units and each unit in the Fund has the same rights attaching to it as all other units of the Fund.
16
MAGELLAN GLOBAL EQUITIES FUND
Notes To The Financial Statements
for the half year ended 31 December 2019
5 Earnings Per Unit
5. Earnings Per Unit
Basic earnings per unit ("EPU") is calculated as profit/ (loss) for the period divided by the weighted average number of units on issue. Diluted earnings per share is calculated by adjusting the basic earnings per unit to take into account the effect of any changes in income or expense associated with dilutive potential units and the weighted average number of additional ordinary units that would have been outstanding assuming the conversion of all dilutive potential ordinary units.
31 December | 31 December | |
2019 | 2018 | |
Basic EPU | ||
Profit/(loss) attributable to unitholders ($'000) | 117,024 | 13,344 |
Weighted average number of units for basic EPU ('000) | 396,736 | 346,463 |
Basic EPU (Cents) | 29.50 | 3.85 |
Diluted EPU | 117,024 | |
Profit/(loss) attributable to unitholders ($'000) | 13,344 | |
Weighted average number of units for diluted EPU ('000) | 396,736 | 346,463 |
Diluted EPU (Cents) | 29.50 | 3.85 |
As the Fund has no potential, dilutive units, basic and diluted EPU are equal.
6 Net Asset Value Per Unit
6. Net Asset Value Per Unit
The Net Asset Value ("NAV") per unit represents the net assets of the Fund presented in the Statement Of Financial Position at balance date divided by the number of units on issue at reporting date (refer Note 4).
31 December | 30 June | |
2019 | 2019 | |
$ | $ | |
NAV Per Unit | 3.9609 | 3.6622 |
The NAV per unit at balance date may differ from the NAV per unit reported to the ASX due to distributions payable and accruals for fees and minor expenses.
7. Segment Information
7. Segment Information
An operating segment is a distinguishable component of the Fund that is engaged in business activity from which the Fund earns revenues and incurs expenses, whose operating results are regularly reviewed by the Fund's chief operating decision maker in order to make decisions about the allocation of resources to the segment and assess its performance, and for which discrete financial information is available. The chief operating decision maker has been determined as Dr Brett Cairns.
8 Contingent Assets, Contingent Liabilities And Commitments
8. Contingent Assets, Contingent Liabilities And Commitments
At balance date, the Fund has no contingent assets, contingent liabilities or commitments (June 2019: nil).
9 Subsequent Events
9. Subsequent Events
In a release to the ASX on 5 February 2020, the Fund reported a NAV per unit of $4.2206 and 421,457,945 units on issue as at 31 January 2020.
17
MAGELLAN GLOBAL EQUITIES FUND
Notes To The Financial Statements
for the half year ended 31 December 2019
9. Subsequent Events (continued)
Other than the items disclosed throughout this Interim Financial Report and the above, there have been no matters or circumstances arising after the end of the period that have significantly affected, or may significantly affect, the Fund's operations, the results of its operations, or the Fund's state of affairs in future financial periods. Asset prices move daily and daily unit prices are available on the Magellan Financial Group Limited website, www.magellangroup.com.auand also the ASX website.
18
MAGELLAN GLOBAL EQUITIES FUND
Directors' Declaration
for the half year ended 31 December 2019
Directors' Declaration
In the opinion of the Directors,
- the financial statements and notes of Magellan Global Equities Fund as set out on pages 9 to 18 are in accordance with the Corporations Act 2001, including:
- giving a true and fair view of the financial position of the Fund as at 31 December 2019 and of its performance as represented by the results of its operations and cash flows for the period ended on that date; and
- complying with Australian Accounting Standards, the Corporations Regulations 2001, and other mandatory professional reporting requirements; and
- there are reasonable grounds to believe that the Fund will be able to pay its debts as and when they become due and payable.
This declaration has been made after receiving the declarations from the Chief Executive Officer and Chief Financial Officer which mirror section 295A of the Corporations Act 2001 and are recommended by the ASX Corporate Governance Principles and Recommendations.
This declaration is made in accordance with a resolution of the Directors of the Responsible Entity.
Robert Fraser
Chairman
Sydney, 27 February 2020
19
Ernst & Young | Tel: +61 2 9248 5555 |
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Sydney NSW 2000 Australia | ey.com/au |
GPO Box 2646 Sydney NSW 2001 |
Independent Auditor's Report
Independent Auditor's Review Report to the members of Magellan Global Equities Fund Report on the Interim Financial Report
Conclusion
We have reviewed the accompanying interim financial report of Magellan Global Equities Fund (the Fund), which comprises the condensed statement of financial position as at 31 December 2019, the condensed statement of profit and loss and comprehensive income, condensed statement of changes in equity and condensed statement of cash flows for the period ended on that date, notes comprising a summary of significant accounting policies and other explanatory information, and the Directors' declaration.
Based on our review, which is not an audit, nothing has come to our attention that causes us to believe that the interim financial report of the Fund is not in accordance with the Corporations Act 2001, including:
- giving a true and fair view of the Fund's financial position as at 31 December 2019 and of its financial performance for the period ended on that date; and
- complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001.
Directors' Responsibility for the Interim Financial Report
The Directors of the Responsible Entity are responsible for the preparation of the interim financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the Directors determine is necessary to enable the preparation of the interim financial report that is free from material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express a conclusion on the interim financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity, in order to state whether, on the basis of the procedures described, anything has come to our attention that causes us to believe that the interim financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the Fund's financial position as at 31 December 2019 and its financial performance for the period ended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001. As the auditor of the Fund, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.
A review of an interim financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
A member firm of Ernst & Young Global Limited
Liability limited by a Scheme approved under Professional Standards Legislation
20
Independence
In conducting our review, we have complied with the independence requirements of the Corporations Act 2001.
Ernst & Young
Clare Sporle
Partner
Sydney
27 February 2020
A member firm of Ernst & Young Global Limited
Liability limited by a Scheme approved under Professional Standards Legislation
21
MAGELLAN GLOBAL EQUITIES FUND
Corporate Information
Corporate Information
Directors Of The Responsible Entity
Brett Cairns (Chief Executive Officer)
John Eales
Robert Fraser (Chairman)
Paul Lewis
Hamish McLennan
Kirsten Morton (Chief Financial Officer)
Karen Phin
Company Secretary Of The Responsible Entity
Marcia Venegas
Registered Office
Level 36, 19 Martin Place
Sydney NSW 2000
Telephone: +61 2 9235 4888
Fax: +61 2 9235 4800
Email:info@magellangroup.com.au
Auditor
Ernst & Young
200 George Street
Sydney NSW 2000
Unit Registrar
LINK Market Services Limited
Level 12
680 George Street NSW 2000
Telephone: 1800 206 847
Fax: +61 2 9287 0303
Email:magellan@linkmarketservices.com.au
Securities Exchange Listing
Australian Securities Exchange
ASX Code: MGE
Website
http://www.magellangroup.com.au
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Magellan Global Equities Fund published this content on 27 February 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 27 February 2020 15:31:03 UTC
