| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | -1.2% | - |
| 2025 |
|---|
| -1.2% |
The Magellan Global Opportunities Fund delivered a negative return for the September quarter, lagging the benchmark as more speculative companies performed strongly in the risk-on environment. The portfolio was transitioned to the Global Opportunities Strategy during September, which has delivered strong absolute and relative returns historically. Key positive contributors included Alphabet, TSMC, ASML and Eversource, with TSMC and ASML benefiting from improved AI-related semiconductor demand sentiment following OpenAI partnership announcements. Key detractors included Chipotle, Novo Nordisk and Mercado Libre due to weaker consumer spending, pharma rotation concerns, and regional macro challenges respectively. While renewed AI enthusiasm has driven markets to fresh highs, the underlying rationale appears increasingly speculative with considerable uncertainty remaining on monetisation pace. The manager maintains a cautious stance given record market levels and full valuations, though expects US economic activity to remain reasonable aided by interest rate cuts. High-quality portfolio companies remain well-positioned for long-term earnings growth and shareholder returns.
The fund invests in outstanding companies at attractive prices while exercising deep understanding of the macroeconomic environment to manage investment risk, focusing on companies with sustainable competitive advantages that translate into returns on capital in excess of their cost of capital for sustained periods.
We continue to expect US economic activity to remain reasonable in the near term, aided by interest rate cuts. Nonetheless, with Global equity markets at record levels and valuations full, we view risks as not sufficiently discounted in equity valuations and maintain a cautious stance while noting opportunities at the individual stock level are present and will be acted upon. We believe the high-quality companies that comprise the portfolio remain well-placed to deliver strong earnings and shareholder returns over the long term.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Oct 16 2025 | 2025 Q3 | AMT, AMZN, ASML, AVGO, CMG, ES, GOOGL, MA, MELI, META, MSFT, NESN.SW, NVDA, NVO, ORCL, SAP, TSM, V, YUM, YUMC | AI, global, large cap, Quality, semiconductors, technology | ADS GR | Magellan Global Opportunities Fund lagged in September as speculative AI-related companies outperformed. TSMC and ASML benefited from OpenAI partnership announcements while Chipotle and Novo Nordisk detracted due to consumer weakness and pharma rotation. Despite AI enthusiasm driving markets higher, the manager maintains caution given full valuations and speculative elements, focusing on high-quality companies for long-term returns. |
| Jun 30 2025 | 2025 Q2 | AMZN, ASML, CRM, EL.PA, GOOGL, ICE, MELI, META, MSFT, NFLX, NVDA, TSLA, TSM, UBER, V | AI, Automation, Cloud, growth, innovation, large cap, semiconductors, technology | - | Magellan High Conviction targets AI transformation leaders across semiconductors, cloud infrastructure, and enterprise software. With AI advancing faster than prior technology cycles and $300B+ in 2025 infrastructure spending, the fund positions in dominant players like NVIDIA, Microsoft, and TSMC. The manager views this as early innings of change benefiting corporate profitability and economic growth. |
| Jun 30 2024 | 2024 Q2 | AMZN, EL, GME, GOOGL, META, MSFT, NKE, SBUX | AI, China, Energy Transition, global, Long Term, Quality, technology | - | Magellan maintains concentrated positions in quality technology leaders like Microsoft, Amazon, Alphabet and Meta to capitalize on AI innovation and energy transition opportunities. They avoid weak Chinese consumer exposure while expecting continued profit growth to drive returns. The disciplined long-term approach focuses on companies with sustainable competitive advantages positioned for structural technological and environmental changes. |
| Jun 30 2023 | 2023 Q2 | AMZN, BABA, BKNG, BN, CMG, CRM, DEO, GOOGL, ICE, META, MSFT, NFLX, SAF.PA, V, WEC, YUM | AI, Cloud, Energy Transition, payments, Quality, Restaurants, technology, Travel | AMZN | Magellan High Conviction delivered 23.8% returns in 2023, driven by technology rebounds and structural positioning in AI enablers, travel recovery, restaurant expansion, and cloud computing. The concentrated 10-20 stock portfolio benefits from quality companies with competitive moats. Despite recession risks, managers see AI innovation and supply chain restructuring creating compelling long-term opportunities. |
| Jun 30 2022 | 2022 Q2 | - | - | - | |
| Jun 30 2021 | 2021 Q2 | - | - | - | |
| Jun 30 2020 | 2020 Q2 | - | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q3 |
AIRenewed enthusiasm in the AI trade has driven markets to fresh highs, with large deals announced by OpenAI with Nvidia, Broadcom, Oracle and AMD for chips and data centre capacity. While positive on GenAI potential long term, considerable uncertainty remains on pace and degree of monetisation, resulting in increasing risks to the market. The underlying rationale for the recent rally appears increasingly driven by speculative elements including circular deals heavily dependent on OpenAI growing and monetising its user base. |
OpenAI Nvidia Data Centers Monetisation Speculation |
SemiconductorsTSMC benefited from improved semiconductor demand sentiment due to announcements of several OpenAI partnerships with Oracle, Nvidia and Broadcom, positive developments in their potential to drive incremental demand for AI-related chips and manufacturing capacity. However, focus remains on end-market demand dynamics necessary to support these capacity plans, particularly given single-customer concentration with OpenAI. ASML sentiment was also lifted by the AI thematic and Nvidia's equity investment in Intel. |
TSMC ASML Manufacturing Capacity Demand | |
AthleisureAdidas represents a compelling long-term opportunity as a brand with deep heritage, durable competitive advantages, and ability to continue turning global sports tailwinds into sustainable growth. The company has demonstrated resilience through challenging periods including pandemic, geopolitical backlash, Russia exit and Yeezy collaboration winding down. Periods of disruption in categories where structural growth tailwinds and economic moat drivers remain intact can present attractive investment opportunities. |
Adidas Brand Heritage Sports Growth | |
| 2025 Q2 |
AIAI is rapidly advancing from LLMs to reasoning models and agentic AI, with corporate adoption accelerating across all business functions. The technology is progressing faster than mobile or internet eras, with AI likely to reach 50% US household penetration in under three years. Companies are investing over $300B in AI infrastructure in 2025 alone. |
Reasoning Models Agentic AI LLMs Automation Productivity |
CloudHyperscale cloud companies like Microsoft Azure and Amazon AWS are experiencing massive growth in AI workloads. Microsoft processed over 100 million tokens in its most recent quarter, a five-fold increase from a year ago. Capital spending budgets exceed $300B in 2025 to build data centers for AI workloads. |
Hyperscalers Data Centers Azure AWS Workloads | |
SemiconductorsNVIDIA remains the dominant recipient of AI infrastructure capital spending while TSMC produces almost all advanced chips needed for AI. ASML makes all the lithography machines needed for leading-edge chip production. The semiconductor supply chain is deep and complex but concentrated among key players. |
AI Chips Advanced Semiconductors Lithography Foundries Supply Chain | |
AutomationFully autonomous vehicles are increasing with Waymo operating proficiently in San Francisco and Tesla preparing robotaxi services. Humanoid robots are advancing rapidly, with 21 robots competing in Beijing's half marathon. Agentic AI is enabling systems to complete processes independently, driving productivity gains. |
Autonomous Vehicles Robotaxis Humanoid Robots Productivity Efficiency | |
| 2024 Q2 |
AITechnological innovation, particularly Artificial Intelligence and generative AI, has been a key driver of improving fundamentals and revenue growth. The scale of spending by major companies including Microsoft, Amazon, Alphabet and Meta on AI innovation is extraordinary and driving industry rebound. |
Technology Innovation Data Centers Cloud |
Energy TransitionSignificant opportunity exists as the world endeavours to meet net zero emissions targets. China has become cost-competitive in key transition industries including wind, solar, electric batteries and electric vehicles, which will be crucial for a net zero future. |
Net Zero Electrification Renewable Decarbonisation | |
ChinaChina is evolving economically and becoming more cost-competitive in net zero transition industries. Chinese consumers show low confidence due to housing market weakness, while Chinese companies are investing significantly in newer technologies and relying heavily on exports for growth. |
Exports Manufacturing Competition Geopolitical | |
| 2023 Q2 |
AIGenerative AI represents a transformative step forward in technology that will open up new, exciting possibilities. The technology itself is rapidly evolving and companies are working to understand, invest and adapt to maximize beneficial outcomes. Amazon, Microsoft and Alphabet are all seen as enablers of the acceleration of computing as Generative AI takes hold. |
Artificial Intelligence Machine Learning Technology Innovation Computing |
Cloud11% of the portfolio is exposed to the shift to the cloud through the leading western hyperscale cloud providers that are part of Microsoft, Alphabet and Amazon. The growth in cloud use is a long-duration thematic expected to grow about 20% per annum to 2030. |
Cloud Computing Infrastructure Software Enterprise Growth | |
Travel13% of the portfolio is in companies benefiting as borders reopen and business and leisure travel rebounds. Safran and Booking Holdings are benefiting from the recovery in both leisure and business travel with more flights returning. |
Airlines Hotels Leisure Recovery Tourism | |
Restaurants12% of the portfolio is in Restaurant companies such as Yum! Brands and Chipotle Mexican Grill that continue to expand their store networks to new markets and capture strong returns and rapid cash paybacks on those investments. |
Food Service Expansion Consumer Growth Franchising | |
Energy Transition9% of the portfolio is in companies exposed to the energy transition through Brookfield Corporation and WEC Energy. The innovation and investment to materially reduce economies' carbon intensity creates interesting investment opportunities. |
Renewable Energy Clean Technology Infrastructure Sustainability Decarbonization | |
Payments9% of the portfolio is in the leading payments company Visa leveraged to the cash-to-cashless transition across consumer, business and government payment networks. |
Digital Payments Financial Technology Transaction Processing Cashless Networks |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Oct 16, 2025 | Fund Letters | Nikki Thomas | ADS GR | Adidas AG | Consumer Discretionary | Textiles, Apparel & Luxury Goods | Bull | Frankfurt Stock Exchange (Deutsche Börse) | athleisure, brands, Margins, Marketing, Moat, Pricing power, recovery | Login |
| Jun 30, 2023 | Fund Letters | Magellan High Conviction Fund | AMZN | Amazon.com Inc | Consumer Discretionary | Internet & Direct Marketing Retail | Bull | NASDAQ | AWS, Cloud computing, e-commerce, innovation, Logistics, long-term growth, Platform business, technology | Login |
| TICKER | COMMENTARY |
|---|---|
| TSM | TSMC benefited from improved semiconductor demand sentiment due to the announcements of several OpenAI partnerships with Oracle, Nvidia and Broadcom. These were positive developments in their potential to drive incremental demand for AI-related chips and manufacturing capacity; however, we remain focused on the end-market demand dynamics that will be necessary to support these capacity plans, particularly given the single-customer concentration (OpenAI). |
| ASML | Sentiment for ASML was also lifted by the above thematic. In addition, Nvidia's equity investment in Intel added incremental support for a key ASML customer. |
| CMG | Chipotle reported a weaker-than-expected 2Q25 revenue result and downgraded full-year revenue guidance after US consumers pulled back on restaurant visits across the industry. |
| NVO | Novo's share price has been affected by a general rotation out of pharma given heightened/near-term uncertainty regarding tariffs and pricing policies (including Most Favoured Nations and Semaglutide's inclusion in upcoming IRA price negotiations). |
| MELI | Following strong YTD performance, MELI sold off against a backdrop of (1) Argentinian macro turmoil, and (2) Amazon Brazil waiving all Fulfilment by Amazon (FBA) logistics fees through to at least the end of the calendar year. |
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