Is the Magellan Case Unusual? | Episode 03

Understanding Your Superannuation - A Series by Scientiam

Welcome to The Future Financial Adviser, where we discuss the latest digital platforms, best practices, and evidence-based investing strategies, to give financial advisors the tools they need to help more investors improve their financial well-being.

In this episode, I am joined by Josh – one of our financial advisors on our team. Today we talk about the Magellan Fund in Australia and their recent underperformance. While it is creating headlines - is this really unusual for a star active manager to underperform?

Magellan has almost $100 billion in net assets and recent significant underperformance, as well as issues within the team, are creating headlines they don't pay for.

Underperformance within the active managed fund space is quite normal and should be part of your research and understanding when investing or recommending funds. Many advisers think they are adding value by recommending funds like Magellan and are swooned by lavish lunches and fancy presentations. Why would an adviser make their clients pay 1.35% for a fund like this that has underperformed so drastically? Did they not do the research and simply listen to the marketing?

At the end of the day, who wins when using this “pick a manager” approach? The investor or the fund manager? There is a smarter way to invest than using these high-cost managers that rely on one key “star” manager.

If you’re ready to modernise your advisory business and reach a new generation of investors, then this show is for you!

If you’ve been enjoying the show, please make sure to share it with your network and leave a review on your favourite listening platform.

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About Our Host

Nigel Baker is the founder of Scientiam, designed by advisers to help advisers engage with more clients to access the truth about money and investments. Nigel has over three decades of experience in the wealth management industry, having worked for some of the largest global institutions, and was a partner in one of Australia’s largest Accounting groups. He is also the author of ‘The Super Secret’ which uncovers the truth about how to invest successfully. Nigel is passionate about helping others understand money better so that they can achieve what is of utmost importance to themselves and their families.
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