Magellan vs. Platinum – which fund manager should you own in 2014?

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.

There's no time like the present to invest for your future.

Interested in our #1 dividend-paying stock? Discover The Motley Fool's favourite income idea for 2014 in our brand-new, FREE research report, including a full investment analysis! Simply click here for your FREE copy of "The Motley Fool's Top Dividend Stock for 2014."

Motley Fool contributor Tim McArthur owns shares in Henderson Group.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.