Magellan has released its results for the six months ended 31 December 2015, revealing it saw average monthly retail net inflows of $214 million during the period.
The firm also saw its average funds under management grow by 44% to $38.8 billion and net profit increase by 41% to $109.3 million, corresponding to an interim dividend up 38% to 51.3c per share.
According to Magellan chief executive Hamish Douglass, a major factor in this result is the flows into the company's global equities strategy, the Magellan Global Equities Fund, which has attracted over 8,500 unitholders and was listed on the ASX in March 2015 and is now available via "replica funds" through AMP, CBA and BT/Westpac.
Speaking to Financial Standard, Douglass said, "We've had literally every stockbroking firm use that vehicle in the country and over 60% of the underlying investors are self-managed superannuation funds. I think if you combine our quoted version of our fund plus the progress we've made with BT/Westpac and AMP which adds to our very important strategic relationship with CBA, we're kind of at a new level."
Douglass attributed the new interest in the strategy to a general resurgence of interest in global equities following the commodities boom. "Investor confidence in Australian stocks has shaken, and maybe we're getting more interest in global equities and obviously we've got a pretty good representation and get a reasonable share if there is more interest out of retail advisers," he explained.
As to whether the downturn in global markets (that is set to continue through 2016) will hinder Magellan's record flows into the strategy over the next year, Douglass said, "Yes, it will. Discretionary money - the timing of which people invest does get influenced by market sentiment. But does that worry me? No. That's just a timing issue, to be honest.
"In terms of performance, we really don't talk on 12-month periods. Our strategy is to give people quite a lot of defence on the downside and we're seeking to deliver people that minimum return net of our fees 9% per annum over the long-term.
"Obviously we would like to be down much less than markets if they collapse, and our strategy in these down periods has really done very well. So has our infrastructure strategy. So we kind of don't get caught up in our absolute performance over 12 months; we want to give people a lot of downside protection and confidence during down periods."
As per Magellan's statement, the Magellan Global Fund has delivered a 15.3%, 25.2% and 20.6% return on a one-, three- and five-year basis.