Chris Gosselin, CEO of FundMonitors.com, speaks with Richard Brennan, Strategy Ambassador at East Coast Capital Management.

The ECCM Systematic Trend Fund has a track record of 4 years and 10 months. Thef und has outperformed the SG Trend benchmark since inception in January 2020, providing investors with an annualised return of 15.09% compared with the benchmark's return of 6.97% over the same period.

Funds operated by this manager: ECCM Systematic Trend Fund

Magellan Global Quarterly Update

Magellan Asset Management

November 2024

Arvid Streimann offers an analysis of why Trump's victory was more decisive than predicted and the key issues that influenced voters' decisions. He provides insights into the market's reaction and shares his expectations for the next 12 months, highlighting which sectors are likely to perform better than others.

Funds operated by this manager:

Magellan Global Fund (Hedged), Magellan Global Fund (Open Class Units) ASX:MGOC, Magellan High Conviction Fund, Magellan Infrastructure Fund, Magellan Infrastructure Fund (Unhedged)

Important Information: 

Important Information: 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.

This material may include data, research and other information from third party sources. Magellan makes no guarantee that such information is accurate, complete or timely and does not provide any warranties regarding results obtained from its use. This information is subject to change at any time and no person has any responsibility to update any of the information provided in this material.  Statements contained in this material that are not historical facts are based on current expectations, estimates, projections, opinions and beliefs of Magellan. Such statements involve known and unknown risks, uncertainties and other factors, and undue reliance should not be placed thereon. No representation or warranty is made with respect to the accuracy or completeness of any of the information contained in this material. Magellan will not be responsible or liable for any losses arising from your use or reliance upon any part of the information contained in this material.

Any third party trademarks contained herein are the property of their respective owners and Magellan claims no ownership in, nor any affiliation with, such trademarks.   Any third party trademarks that appear in this material are used for information purposes and only to identify the company names or brands of their respective owners. No affiliation, sponsorship or endorsement should be inferred from the use of these trademarks. This material and the information contained within it may not be reproduced, or disclosed, in whole or in part, without the prior written consent of Magellan.

Market Commentary - October

Glenmore Asset Management

November 2024

Funds operated by this manager:

Glenmore Australian Equities Fund

New Funds on FundMonitors.com

Below are some of the funds we've recently added to our database. Follow the links to view each fund's profile, where you'll have access to their offer documents, monthly reports, historical returns, performance analytics, rankings, research, platform availability, and news & insights. 

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Chris Gosselin, CEO of FundMonitors.com, speaks with Richard Brennan, Strategy Ambassador at East Coast Capital Management.

The ECCM Systematic Trend Fund has a track record of 4 years and 10 months. Thef und has outperformed the SG Trend benchmark since inception in January 2020, providing investors with an annualised return of 15.09% compared with the benchmark's return of 6.97% over the same period.

Funds operated by this manager: ECCM Systematic Trend Fund

Magellan Global Quarterly Update

Magellan Asset Management

November 2024

Arvid Streimann offers an analysis of why Trump's victory was more decisive than predicted and the key issues that influenced voters' decisions. He provides insights into the market's reaction and shares his expectations for the next 12 months, highlighting which sectors are likely to perform better than others.

Funds operated by this manager:

Magellan Global Fund (Hedged), Magellan Global Fund (Open Class Units) ASX:MGOC, Magellan High Conviction Fund, Magellan Infrastructure Fund, Magellan Infrastructure Fund (Unhedged)

Important Information: 

Important Information: 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.

This material may include data, research and other information from third party sources. Magellan makes no guarantee that such information is accurate, complete or timely and does not provide any warranties regarding results obtained from its use. This information is subject to change at any time and no person has any responsibility to update any of the information provided in this material.  Statements contained in this material that are not historical facts are based on current expectations, estimates, projections, opinions and beliefs of Magellan. Such statements involve known and unknown risks, uncertainties and other factors, and undue reliance should not be placed thereon. No representation or warranty is made with respect to the accuracy or completeness of any of the information contained in this material. Magellan will not be responsible or liable for any losses arising from your use or reliance upon any part of the information contained in this material.

Any third party trademarks contained herein are the property of their respective owners and Magellan claims no ownership in, nor any affiliation with, such trademarks.   Any third party trademarks that appear in this material are used for information purposes and only to identify the company names or brands of their respective owners. No affiliation, sponsorship or endorsement should be inferred from the use of these trademarks. This material and the information contained within it may not be reproduced, or disclosed, in whole or in part, without the prior written consent of Magellan.

Artificial Intelligence will change the world (eventually)

Alphinity Investment Management 

October 2024

"The risk of underinvesting is dramatically greater than the risk of overinvesting" (Sundar Pichai, Alphabet CEO, 23rd July 2024).

This quote from the Alphabet CEO during the Alphabet 2Q earnings call amplified investor concerns around the current Artificial Intelligence ("AI") investment landscape. The technology industry appears to be engaged in a high-stakes race to develop AI infrastructure, while the potential returns on these massive investments remain ambiguous.

Given the substantial market share and valuation premiums now commanded by AI-focused companies, there's mounting pressure for these firms to demonstrate tangible returns on their AI investments. Investors are increasingly looking for concrete evidence that the massive capital inflows into AI infrastructure and development will translate into sustainable revenue streams and long-term profitability.

Despite market impatience, we are observing encouraging signs of AI's impact starting to emerge from both the revenue and expense sides of businesses. Substantial returns will however take time to materialise. Given the current market dynamics, we remain nimble with our AI exposure in the short term, but unequivocally convinced on the longevity and scale of the AI opportunity over the long term.

Where are the returns?

Market concerns around overinvesting in AI are not without precedent given the technology sector's history of several technology boom-and-bust cycles: From the 1990's internet era exuberance leading to the dot.com crash, to the recent hype around the metaverse (virtual worlds), Web 3 (decentralised internet vision), and even non-fungible tokens (NFT's). These examples serve as cautionary tales, illustrating how technology hype can outpace real-world applications, leaving a trail of poor returns and crushed share prices in their wake.

Current investment levels into AI architecture are extraordinary. Hyperscaler (Microsoft (NASDAQ: MSFT), META (NASDAQ: META), Alphabet (NASDAQ: GOOGL) & Amazon (NASDAQ: AMZN)) capex will rise more than 40% in CY24 and is expected to rise further in CY25 to levels 2.5x what they were in CY20. This level of investment is starting to have an impact on financial returns for these companies, both in terms of cash flow returns and on margins as higher depreciation flowing from this investment begins to bite in the P&L.

Hyperscaler Capex ($bn)

Returns take time to materialise

In any major technological transition - be it internet, cloud computing, or the current wave of generative AI, there is a consistent pattern: infrastructure development precedes widespread application and the realisation of value. The internet evolution provides a compelling case study, where the true value from end applications and the resultant share price movements only started to emerge after 3 years and really gathered momentum after 5 years.

Internet Cycle Stock Performance

We can see a similar phenomenon play out with generative AI. Cloud AI services are beginning to inflect, as evidenced by recent results showing a reacceleration in cloud demand but several cutting-edge AI applications such as Edge AI, Smart Robots and Multi-Agent Systems are still in development and yet to reach widespread commercial deployment.

Where are the end applications?

Contrary to the notion that end applications of AI are not yet visible, we're witnessing a robust proliferation of AI-powered solutions across various sectors already emerging just ~20 months after the emergence of GEN AI.

While these applications are in their initial phases and will take time to scale, their market potential is substantial. Take for example the M365 co-pilot example: a US$30 subscription fee per month across their 160m high value commercial users, could add $58bn revenue annually (a +23% lift to FY24 revenue). Expansion to the remaining 200m commercial users and integration into broader product offerings offer additional upside.

Returns from "efficiencies"

The impact of generative AI on business efficiency and productivity is emerging as a transformative force, with potential returns far exceeding initial revenue gains. This trend, while significant, remains underappreciated due to public concerns about AI-driven job displacement. However, real-world applications are already demonstrating substantial benefits across diverse industries. Companies are implementing AI with measurable success. For example:

• Uber (NASDAQ: UBER) is using gen AI to enhance customer service and marketing efforts;
• Mercado Libre (NASDAQ: MELI) is optimising capacity planning and fulfillment operations;
• Wipro (NASDAQ: WIT) is using it to boost software development through code assistance & documentation;
• Best Buy (NASDAQ: BBY) is deploying AI-powered trouble-shooting assistants.

Importantly, companies are beginning to qualify these benefits well beyond the bounds of tech:

• Walmart's (NASDAQ: WMT) quantified generative AI's contribution to catalogue creation in their recent results call with the CEO stating that: "without the use of generative AI, the work would have required nearly 100 times the current head count to achieve what we did using generative AI"
• Pfizer (NASDAQ: PFE) is leveraging AI as a key component in a $4bn operating expense reduction initiative;
• American Express (NASDAQ: AXP) is realising a 30% higher response rate on corporate offers through AI assistance; and
• L'Oreal reported a 10-15% boost in advertising productivity, by spotting trends (using "Trendspotter") early and marketing to online shoppers.

The list goes on. The adoption of generative AI is rapidly expanding, with companies across various sectors reporting emerging and expanding use cases.

How to quantify these returns

Quantifying the actual returns from generative AI can be a difficult exercise. For example, disaggregating how much of the Meta revenue acceleration comes from product enhancement due to Gen AI is complex, as is product augmentations flowing from its application to existing capabilities.

Stepping back to a broader economic perspective, McKinsey undertook a study trying to piece together the incremental value that generative AI could bring. The total value was $6.1tr - $7.9tr annually across specific generative AI use cases and general productivity.

Taking specific use cases, McKinsey's comprehensive analysis of generative AI applications provides a detailed roadmap of its potential impact across various business functions. McKinsey identified activities within business functions where generative AI could be applied and then calculated both the efficiency impact (as a % of functional spend) and the aggregate size of the opportunity. Remarkably, 75% of the generative AI impact was across a handful of functions spanning sales, marketing, product R&D, customer operations and software engineering, estimated to be a c$400-500bn impact across each function.

Interestingly, we are beginning to get validation of some of these data points in our conversations with company management teams, for example in software engineering the efficiency/cost boost figure of c. 30% is now being discussed. Looking ahead, we will continue to monitor validation points of this return profile, but if this current trajectory of efficiency gains persists across various business functions, it suggests that the substantial investments in AI infrastructure are likely to be more than justified.

Funds operated by this manager:

Alphinity Australian Share Fund, Alphinity Concentrated Australian Share Fund, Alphinity Global Equity Fund, Alphinity Global Sustainable Equity Fund, Alphinity Sustainable Share Fund

Magellan Global Quarterly Update

Magellan Asset Management

October 2024

Arvid Streimann, Nikki Thomas and Alan Pullen discuss key market themes and how the global strategy is positioned to capitalise on emerging opportunities, whilst monitoring the risks. Arvid also discusses the potential market impacts of the upcoming US election based on various possible outcomes.

Funds operated by this manager:

Magellan Global Fund (Hedged), Magellan Global Fund (Open Class Units) ASX:MGOC, Magellan High Conviction Fund, Magellan Infrastructure Fund, Magellan Infrastructure Fund (Unhedged), MFG Core Infrastructure Fund, Magellan Core ESG Fund

Important Information: 

Important Information: 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.

This material may include data, research and other information from third party sources. Magellan makes no guarantee that such information is accurate, complete or timely and does not provide any warranties regarding results obtained from its use. This information is subject to change at any time and no person has any responsibility to update any of the information provided in this material.  Statements contained in this material that are not historical facts are based on current expectations, estimates, projections, opinions and beliefs of Magellan. Such statements involve known and unknown risks, uncertainties and other factors, and undue reliance should not be placed thereon. No representation or warranty is made with respect to the accuracy or completeness of any of the information contained in this material. Magellan will not be responsible or liable for any losses arising from your use or reliance upon any part of the information contained in this material.

Any third party trademarks contained herein are the property of their respective owners and Magellan claims no ownership in, nor any affiliation with, such trademarks.   Any third party trademarks that appear in this material are used for information purposes and only to identify the company names or brands of their respective owners. No affiliation, sponsorship or endorsement should be inferred from the use of these trademarks. This material and the information contained within it may not be reproduced, or disclosed, in whole or in part, without the prior written consent of Magellan.

Chris Gosselin, CEO of Australian Fund Monitors, speaks to Nichols Chaplin, Director and Portfolio Manager at Seed Funds Management. Nicholas shares insights on APRA's plan to phase out additional tier one bonds, which could destabilise the banking sector and impact retail investors.

The Seed Funds Management Hybrid Income Fund has a track record of 9 years and has outperformed the Solactive Australian Hybrid Securities (Net) benchmark since inception in October 2015, providing investors with an annualised return of 6.39% compared with the benchmark's return of 4.86% over the same period.

Funds operated by this manager: Seed Funds Management Hybrid Income Fund

Chris Gosselin, CEO of FundMonitors.com, speaks with Benjamin Harrison, Chief Investment Officer at Altor Capital. 

The Altor AltFi Income Fund has a track record of 6 years and 5 months and has outperformed the RBA Cash Rate + 5% benchmark since inception in April 2018, providing investors with an annualised return of 11.68% compared with the benchmark's return of 6.67% over the same period.

Funds operated by this manager: Altor AltFi Income Fund, Altor Emerging Growth Fund

Global Webcast: Reflecting on a volatile month

& 2Q24 results season

Alphinity Investment Management 

August 2024

Elfreda Jonker and Jonas Palmqvist reflect on what has been happening in markets over the previous month and review key themes from the second quarter of 2024.

Funds operated by this manager:

Alphinity Australian Share Fund, Alphinity Concentrated Australian Share Fund, Alphinity Global Equity Fund, Alphinity Global Sustainable Equity Fund, Alphinity Sustainable Share Fund

Paul Sanger, Head of Sequoia Direct, speaks to Nicholas Chaplin, Director and Portfolio Manager at Seed Funds Management. 

Nicholas Chaplin, Director & Portfolio Manager of Seed Funds Management, critiqued APRA's proposal to phase out Additional Tier 1 (AT1) bonds, highlighting concerns about the potential risks to banking stability and retail investors. He discussed the current challenges with AT1 instruments in the Australian market, the transition timeline, and the differing impacts on large and small banks. Nicholas also explored alternative solutions and gauged the market's reaction to the proposed changes.

The Seed Funds Management Hybrid Income Fund  has a track record of 8 years and 11 months and has outperformed the Solactive Australian Hybrid Securities (Net) benchmark since inception in October 2015, providing investors with an annualised return of 6.37% compared with the benchmark's return of 4.79% over the same period.

Funds operated by this manager: Seed Funds Management Hybrid Income Fund

Chris Gosselin, CEO of Australian Fund Monitors, speaks to Nicholas Chaplin, Director and Portfolio Manager at Seed Funds Management. 

The Seed Funds Management Hybrid Income Fund   has a track record of 8 years and 10 months and has outperformed the Solactive Australian Hybrid Securities (Net) benchmark since inception in October 2015, providing investors with a return of 8.41% over the past 12 months and an annualised return of 6.4% since inception compared with the benchmark's return of 4.84% over the same period.

Funds operated by this manager: Seed Funds Management Hybrid Income Fund