Magellan Global Trust (ASX:MGG) reports a strong first year

Magellan Global Trust (ASX: MGG) reported its first result for the period to 30 June 2018.

As a reminder, this is a listed investment trust (LIT) run by Magellan Financial Group Ltd (ASX: MFG). It’s a closed-ended structure focusing on the best shares in the world, keeping a portfolio of between 15 to 35 businesses.

The headline figure for the trust was a net profit of $176.6 million. The trust also reported earnings per share/unit (EPS) of 16.83 cents. This was a solid result considering it started with a NTA of 150 cents.

Magellan Global Trust also paid six cents of distributions for the period, achieving its objective of a 4% distribution yield. The Magellan Global Trust finished FY18 with a net asset value (NAV) per unit of $1.608. The trust returned 11.4% net of net of fees since inception to 30 June 2018.

At the end of FY18, 8.7% of the portfolio was invested in Facebook, 7.2% in Alphabet, 5.5% in Lowe’s, 5.3% in Kraft Heinz, 5.2% in HCA Holdings, 5.2% in Apple, 4.9% in Visa, 4.8% in Wells Fargo, 4.2% in Starbucks and 4.2% in MasterCard. It also had 21% of the portfolio in cash, mostly held in US dollars.

The trust’s 5% distribution re-investment plan discount to the NAV per unit is attractive, which is why I’m participating in it myself.

Foolish takeaway

I believe Magellan Global Trust is one of the best ways to get international share diversification without having to do the research yourself. Yes, a cheap ETF could do a good job but Magellan has a track record of outperforming its global index benchmark.

Another share that keeps outperforming is this top share which is a leader in Australia and is expanding into Asia.

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It's been a nail-biter of a reporting season here in the first half of 2018.

But the real action, in my opinion, is what companies are doing with dividends.

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Motley Fool contributor Tristan Harrison owns shares of MAGLOBTRST UNITS. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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