Magellan Infrastructure Fund (Currency Hedged)

The Magellan Infrastructure Fund (Currency Hedged) is an ASX-listed active ETF targeting stable, long-term returns.

By investing in 20 to 40 globally listed infrastructure companies with predictable cash flows, the fund aims to deliver attractive risk-adjusted returns. A rigorous investment process focuses on identifying high-quality infrastructure assets at compelling valuations.

Currency hedging mitigates exposure to foreign exchange fluctuations. With a proven investment philosophy and a disciplined portfolio construction approach, the fund seeks to provide investors with a reliable and diversified income stream.

The Fund is a registered managed investment scheme. The Fund has been admitted to trading status on the ASX under the AQUA Rules.

The Fund primarily invests in the securities of companies listed on stock exchanges around the world that generate the dominant part of their earnings from the ownership of infrastructure assets. The Fund’s portfolio will comprise mostly stocks at any one time but will also have some exposure to cash.

The Fund can use foreign exchange contracts to facilitate settlement of stock purchases. It is the Responsible Entity’s intention to substantially hedge the capital component of the foreign currency exposure of the Fund arising from investments in overseas markets back to Australian Dollars.

Investment objective 

The primary objectives of the Fund are to achieve attractive risk-adjusted returns over the medium to long-term while reducing the risk of permanent capital loss.

The Fund primarily invests in the securities of companies listed on stock exchanges around the world, but will also have some exposure to cash and cash equivalents. The Fund can use foreign exchange contracts to facilitate settlement of stock purchases. It is the Responsible Entity’s intention to substantially hedge the capital component of the foreign currency exposure of the Fund arising from investments in overseas markets back to Australian Dollars.

This Active ETF is a currency hedged infrastructure fund listed on the ASX. Holding 20 to 40 stocks that seeks to deliver the stable returns offered by the asset class, while hedging returns from currency movements.

To prudently invest in outstanding infrastructure and utilities companies at attractive prices that exhibit highly predictable cashflows.

The infrastructure asset class, when appropriately defined, is characterised by monopoly-like assets that face reliable demand and enjoy predictable cashflows. As a result, Magellan has established proprietary classification criteria to appropriately categorise securities as investment grade infrastructure, and thus eligible for inclusion in its portfolios or otherwise. Potential investments that meet these criteria are expected to achieve strong underlying financial performance over medium- to long-term timeframes, which should translate into reliable, inflation-linked investment returns.

Magellan believes that an appropriately structured portfolio of 20 to 40 investments can provide sufficient diversification to ensure that investors are not overly correlated to any single company, industry-specific or macroeconomic risk.

The Magellan Infrastructure Fund’s (Currency Hedged) investment process involves three key stages:

Determining the investment universe; Only securities that meet Magellan’s proprietary infrastructure classification criteria are included in the Magellan Infrastructure Fund (Currency Hedged) investable universe. In order for a security to meet this definition, its underlying business must provide a service that is essential to the efficient functioning of a community, while generating cash flows that are not subject to external risks such as commodity prices. Furthermore, Magellan evaluates other criteria, such as gearing levels, sovereign risk, regulatory risk and reporting transparency, which, if failed, will result in exclusion from the investment universe. Magellan believes that by excluding businesses that fail to meet these criteria, the universe consists purely of companies that enjoy reliable demand and generate predictable cash flows.

Assessing each potential investment's quality and intrinsic value; Each security in the investment universe is subjected to detailed analysis. This analysis includes evaluations of a company’s external environment, its business’s specific issues, its historical financial performance and its valuation.

Allocating capital to the securities within the investment universe in an appropriate manner; Portfolio construction is driven by the results of qualitative stock analysis, valuation, formal risk controls and factor risk management. The portfolio construction process focuses on long-term value rather than index-relative positioning.

The resulting portfolio provides investors with exposure to securities that meet Magellan’s infrastructure classification criteria, while giving consideration to each security’s quality and its price relative its assessed intrinsic value.

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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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