A recent article in the Australian Financial Review stated that "two of Australia's best performing and most respected international fund managers are taking wildly different bets on the global economic outlook".
The two fund managers in question are Magellan Financial Group (ASX: MFG) and Platinum Asset Management (ASX: PTM). While it's not inaccurate to suggest that the two fund managers – headed by portfolio managers Hamish Douglass and Kerr Neilson respectively – do have very different portfolio positions, it doesn't necessarily follow that their respective views of the world are entirely different.
Rather the "polar opposite" positioning of the funds has just as much to do with the different investment styles the investors employ. While Douglass focuses on buying very high quality businesses with identifiable moats; Kerr is a 'value guy' who seeks out bargain opportunities in out-of-favour places.
While it's likely that one of the two managers will have a portfolio better positioned than the other in the short term, over the long term both managers have proven themselves adept at outperforming the market. For investors, owning Magellan or Platinum, or another internationally focused manager such as Henderson Group (ASX: HGG) can provide the opportunity to diversifying their returns away from the domestic economy. With so many Australian investors heavily skewed in their portfolios towards the state of the domestic economy this diversification is important. It is particularly important given the domestic economy no longer has the mining boom that created an enormous tailwind for the local economy.
Foolish takeaway
With the outlook for both the US economy and emerging economies looking better than the domestic economic outlook, both fund managers have investment appeal. The important thing to understand is that both Douglass and Neilson have different approaches to investing, which means that in the long-run both can be right with their stock picks.