MAGELLAN - In The Know

The consumer cycle is turning, creating a challenging operating environment for retailers and a period of volatility for investors. In this episode, Hannah Dickinson, Sector Head of Franchises joins Magellan Portfolio Manager Jowell Amores to dissect the downfall of a company that was once a go-to retailer in the United States. They look at the case study of Bed Bath and Beyond, a US-based retailer that went from market juggernaut to bankruptcy as it struggled to maintain market share and adapt to changing consumer preferences. This story highlights the importance of strong management, sensible capital allocation and sustainable competitive advantages when considering the prospects of any retailer. It’s a salutary story of what not to do in the consumer space, which has important lessons for any investor.

As consumers contend with the cost of living, interest rates and the fallout from a pandemic and a war, it’s time to look at how Magellan is shoring-up its consumer investments by concentrating on pricing power, inflation protection and durable competitive advantage. In this episode, Magellan’s Head of Listed Funds, Jennifer Herbert is joined by Sector Head of Franchises & Healthcare Hannah Dickinson, and investment analysts Lucina Martin, and James Macdonald, for a broad exploration of the investment tactics used to identify the quality, compounding consumer-centred companies that will weather the wild economic storms.

Even during volatile times, one of Magellan’s portfolio holdings has generated outstanding returns, and continues to deliver. American Water Works, which is the largest publicly traded US water and wastewater utility company, has generated returns of 400 per cent over the past ten years, and continues to be one of Magellan’s most reliable assets. In this episode, Infrastructure Portfolio Manager Jowell Amores speaks with American Water’s President and CEO, Susan Hardwick, in an insightful discussion about how the company’s simple strategy is providing attractive and consistent returns.

A globally recognised cyber communications expert and former Chief Information Officer to the US president, Suzette Kent brings a world of experience to the realm of cyber and data security. In this episode of Magellan, In the Know, Magellan Head of Macro and Portfolio Manager Arvid Streimann speaks with Suzette Kent in a broad-ranging discussion about the new cyber security landscape. Are companies concentrating enough on internal security? Which sectors are most at risk? How do you tell if a prospective investment is cyber secure? All these questions and more are answered in this instructive and informative episode.   The information contained in this podcast is for general information purposes and does not constitute investment advice. You should seek investment advice tailored to your circumstances before making any investment decision. Opinions stated are Ms. Kent’s own and not to be considered reflective of any of the organizations with whom she affiliated.

With one of the toughest of investment years - 2022 - now behind us, it’s time to look at the road ahead, its tailwinds and potential pitfalls. In this new year episode of Magellan in the Know, Head of Listed Funds Jennifer Herbert discusses the landscape in 2023 with Magellan’s Global Portfolio Managers Nikki Thomas and Arvid Streimann. With the abrupt rise in interest rates probably now behind us, and with a slowdown on the horizon, they outline Magellan’s investment philosophy of delivering an absolute return over time through thoughtful risk assessment and due diligence on the underlying value of companies. Europe and China may be in the process of emerging from darker times, but some fundamental risks are still apparent, so they say it’s a time to pay attention to sound investment frameworks and stick to them.

In this episode, Ofer Karliner, Infrastructure Portfolio Manager hosts a wide-ranging discussion with three of his colleagues about the travel sector and the associated investment opportunities. Ofer is joined by Ryan Joyce, Sector Head of Technology, Hannah Dickinson, Sector Head of Franchises, and Yathavan Suthaharan, Industrials Analyst. From airlines to accommodation, luxury retail to technology and manufacturing to aircraft maintenance, together they discuss the companies that might benefit from the re-opening up of the travel sector post covid and what risks and opportunities might lie ahead. There are also some fascinating revelations about the way the pandemic has forced these industries to evolve.

Some Asian markets fell right after Chinese President Xi Jinping cemented his position as the most powerful Chinese leader since Mao. President Xi used the Chinese Communist Party’s National Party Congress, which is held every five years, to not only break the tradition of maximum ten-year terms in office, but he also removed supporters of his more open, market-oriented predecessors from the key policy making body. John Garnaut, founder of investment advisory firm Garnaut Global Joins Matt Pottinger, a Distinguished Visiting Fellow at the Hoover Institution, to discuss the implications of Xi's indefinite grip on power on the outlooks for businesses, the economy and international relations.

It’s a time of crisis, but, as Albert Einstein once said: “in the midst of every crisis, lies great opportunity.” A negative supply shock in Europe has seen global energy prices soar and has forced governments to scramble for alternatives to safeguard their national security. According to Portfolio Manager David Costello and Magellan Head of Macro and Portfolio Manager Arvid Streimann, shifting attitudes are pushing the market toward alternative, renewable energy sources, resulting in the most influential investment thematic of the next 30 years. They say that, although some infrastructure legacy issues will be remain, this current energy crisis will actually result in a more secure, and electrified, future, and a gradual decrease in prices over time.

One of the USA’s largest power generation and gas distribution firms, WEC Energy Group supplies electricity to 4.6 million customers — including some of the country’s biggest manufacturers — across Wisconsin, Illinois, Michigan and Minnesota. The company has delivered attractive and consistent returns as part of the Magellan portfolio for more than ten years. WEC Energy’s Executive Chairman, Gale Klappa, says the power provider should see growth thanks to a huge expansion in demand that will stem from the green energy revolution. Gale Klappa explains how embracing renewable technologies and diversifying generation methods can deliver the three things desired by shareholders, regulators and customers: affordable, reliable and clean energy.

Diageo, the world's leading producer of distilled spirits, has experienced compounded revenue growth of over 9% p.a. by focusing on 'drinking better' rather than more. The CEO emphasizes the company's obsession with consumers and efficiency, and believes there is room for further growth. They discuss their investment case, sustainable value creation, marketing strategies, investment in data and analytics, and commitment to sustainability and social responsibility.