Is Magellan Global Trust (ASX: MGG) the best listed investment business on the ASX?

Magellan Global Trust is an actively managed global shares investment trust, which is managed by Magellan Financial Group Ltd (ASX: MFG). It targets a 4% cash distribution yield. It focuses on the highest quality businesses it can see in the world like Microsoft, Alphabet, Apple, Visa and Mastercard.

Magellan Global Trust’s New Investment

Magellan Global focuses on global shares unlike most listed investment companies (LICs) which essentially just invest in ASX shares.

Australia only has around 2% of the world’s share market capitalisation, meaning that if you don’t invest globally you are potentially missing out on most of the world’s opportunities.

Fees

One of the main things to look at with any investment is what its costs are because this reduces the net returns. The annual management fee and administration fee is 1.35%. This is quite expensive compared to cheap exchange traded funds (ETFs). It also charges a performance fee of 10% of the outperformance compared to its benchmarks.

Performance

But high fees can be justified if it’s outperforming, and it has been outperforming.

Since inception (October 2017) the Magellan Global Trust has outperformed the MSCI World Net Total Return Index by 3.3% after fees per year (by returning 17% per year). Over the past year it has outperformed by 4.4% after fees, achieving a 12% return.

Holdings Comments

It has a high quality list of holdings which have excellent network effects and good growth runways like Facebook and Apple.

We learned this week that Magellan has taken up a large position in Chinese e-Commerce giant Alibaba. This is a very interesting move and it shows that Magellan are willing to invest anywhere in the world for returns. Investment flexibility is very useful.

Time To Buy Shares?

There’s two areas to think if Magellan Global Trust is a good buy or not. You can compare the net asset value (NAV) per share against the share price to see if it’s cheap or expensive, it’s at a 6% discount to the NAV at the moment.

But you also need to think whether the underlying holdings are good value or not either. There’s no point buying something at a slight discount if the underlying holdings are really expensive. It’s a lot harder to say if Alphabet etc. are good value or not themselves.

But it’s definitely possible to find international growth on the ASX, such as the ones in the free report below.

How do you value an investment? What does your process look like? Do you really understand what you’re investing in and why?

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DisclosureJaz owns shares of Magellan Global Trust at the time of writing, but this could change at any time.