What really matters in investing

Magellan Asset Management

August 2023

Global Portfolio Managers, Arvid Streimann and Nikki Thomas dissect what's important and what's a distraction in the investment world. They talk us through where they are currently finding opportunities and how they are positioning the portfolio to benefit from structural tailwinds. Investment Analyst, Emma Henderson joins them to provide a deep dive into our restaurant holdings and why we like them.

Funds operated by this manager:

Magellan Global Fund (Hedged), Magellan Global Fund (Open Class Units) ASX:MGOC, Magellan High Conviction Fund, Magellan Infrastructure Fund, Magellan Infrastructure Fund (Unhedged), MFG Core Infrastructure Fund

Important Information: 

This material has been delivered to you by Magellan Asset Management Limited ABN 31 120 593 946 AFS Licence No. 304 301 ('Magellan') and has been prepared for general information purposes only and must not be construed as investment advice or as an investment recommendation.  This material does not take into account your investment objectives, financial situation or particular needs. This material does not constitute an offer or inducement to engage in an investment activity nor does it form part of any offer documentation, offer or invitation to purchase, sell or subscribe for interests in any type of investment product or service. You should obtain and consider the relevant Product Disclosure Statement ('PDS') and Target Market Determination ('TMD') and consider obtaining professional investment advice tailored to your specific circumstances before making a decision about whether to acquire, or continue to hold, the relevant financial product. A copy of the relevant PDS and TMD relating to a Magellan financial product may be obtained by calling +61 2 9235 4888 or by visiting www.magellangroup.com.au.

Past performance is not necessarily indicative of future results and no person guarantees the future performance of any financial product or service, the amount or timing of any return from it, that asset allocations will be met, that it will be able to implement its investment strategy or that its investment objectives will be achieved. This material may contain 'forward-looking statements'. Actual events or results or the actual performance of a Magellan financial product or service may differ materially from those reflected or contemplated in such forward-looking statements.

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Hedge Clippings | 25 August 2023

Wow! What a funny old week that was... but then again when one stands back from the headlines, it was more like a slow moving train wreck - or in the case of Yevgeny Prigozhin's presumed mid-air "mishap", more a question of "what took so long"?  From what we can glean so far, and given that news out of Russia is curated to say the least, nothing is yet confirmed, other than the fact that a private jet crashed with the loss of all on board. Was Yevgeny among them, was he a target, or was it a way for him to "distance himself" from the long arms of his ex mate, the President? Sooner or later Putin, not widely known for forgiveness, would have found a way to extract his final revenge, either via poisoning Prigozhin's food (which would have been ironic considering he was reportedly once Putin's chef) or some other means.

If he was on the plane, it's difficult to have much sympathy. If he wasn't, the best advice would be to watch what you eat, and avoid tall buildings.

And then there's the case of Donald, once (and still) known as "President" Trump, facing up to Fulton County Jail to have his mug shot recorded for posterity, and no doubt a whole lot more, along with a dozen other of his co-conspirators. Once again Trump stole the show, having previously (according to some) tried to steal the 2020 US Presidential election, or according to him, having it stolen from him. Sounds more "banana republicanish" to us than Republican, but probably just symptomatic of where the world, or at least the US of A is heading. No doubt he'll garner even more applause and support from his followers, while (just like Prigozhin) it remains to be seen if he survives, or swaps his famous red tie for a more mundane uniform and a potential 641 years in the slammer.

Closer to home, even the government's chief media apologist the ABC was questioning the curious co-incidence of the PM's son winning the frequent flyer lottery, and ending up a member of the Qantas Chairman's Lounge. Soon to depart Qantas CEO Alan Joyce deflected questions on how that occurred, citing "privacy" concerns, while at the same time defending a full year profit of $2.47bn., and refusing to refund all or any of the close to $1billion in COVID-19 support the government handed out while he decimated the Qantas workforce. And while Qantas are enjoying record profits on the back of limited seat availability, Albo's transport minister refused to be drawn on the logic of refusing just 21 additional flights per week from Qatar Airways, citing Qantas as the "National Carrier" (actually a commercial and publicly listed company) as in the "national interest". Apparently, any benefits to the long suffering Australian traveling public don't come into the equation, maybe because Albo and co. either don't pay for their tickets, or fly on an RAF VIP aircraft.

Barring a complete fall out in the Chinese economy it looks as if Australia will avoid a major recession - unless of course Xi presses ahead with his stated intention of invading Taiwan. That would create a dilemma across the globe for governments, and businesses alike given the level of dependence on China as the world's manufacturer, and consumer. That might make Xi think twice, but in the meantime businesses are moving to reduce that dependence by moving or reducing their exposure. Either way, that's not going to assist China's current economic slowdown.

Finally, on a lighter note, we gather the Rolling Stones are quietly planning the release of a new album in September. Which brings us to the following image, or should that be the following question:

Whoever thought, back in the 60's, that Mick Jagger would still be around, let alone pumping out music?

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Touchstone podcast: The state of consumer spending

Touchstone Asset Management

August 2023

"In Australia, consumer spending, historically, has been about 50% of GDP. This year it's been closer to 80% of GDP growth. There seems to be a view that, well, the RBA's ... more or less done what it's gonna do. I think what the market's missing, though, is there's a huge lag from when the RBA increases rates to when households actually have to pay the higher interest rates."

• 1:03 - Touchstone's philosophy and investment process
• 2:37 - Ron's observations from his recent Melbourne trip
• 4:23 - What secular stagnation is, and why it matters
• 6:16 - The real reason consumer spending is going down
• 8:31 - The impact of earnings being too high for consumer companies
• 11:33 - What Touchstone expects from reporting season

Funds operated by this manager:

Touchstone Index Unaware Fund

The content contained in this audio represents the opinions of the speakers. The speakers may hold either long or short positions in securities of various companies discussed in the audio. This commentary in no way constitutes a solicitation of business or investment advice. It is intended solely as an avenue for the speakers to express their personal views on investing and for the entertainment of the listener.

Digital assets: unlocking value in the technology of the future

abrdn

August 2023

Funds operated by this manager:

Aberdeen Standard Actively Hedged International Equities Fund, Aberdeen Standard Asian Opportunities Fund, Aberdeen Standard Australian Small Companies Fund, Aberdeen Standard Emerging Opportunities Fund, Aberdeen Standard Ex-20 Australian Equities Fund (Class A), Aberdeen Standard Focused Sustainable Australian Equity Fund, Aberdeen Standard Fully Hedged International Equities Fund, Aberdeen Standard Global Absolute Return Strategies Fund, Aberdeen Standard Global Corporate Bond Fund, Aberdeen Standard International Equity Fund, Aberdeen Standard Multi Asset Real Return Fund, Aberdeen Standard Multi-Asset Income Fund