Magellan Global Trust (ASX: MGG) is one of my favourite investment ideas on the ASX.
It's hard to find the same level of quality businesses on the ASX as overseas. Most Australian businesses are just focused on the domestic economies of Australia and New Zealand, whereas some businesses listed in the US are global earnings machines.
The fact that 98% of the world's market capitalisation is outside of Australia shows that there are opportunities to be found.
I think the investment team at Magellan Financial Group Ltd (ASX: MFG), which run the Magellan Global Trust portfolio, may be some of the best Australian investors to selectively pick those international ideas.
Over the past year the Magellan Global Trust has created a return of 19.8% after fees, outperforming its benchmark (the MSCI World Net Total Return Index) by 5.6%. Since inception in October 2017 the performance per annum has been 16.9%, outperforming the index by 2.4% per annum.
Magellan only looks at the highest-quality businesses in the world. Many of its top holdings are instantly recognisable: Alphabet, Apple, Facebook, HCA Healthcare, MasterCard, Microsoft, Oracle, Starbucks, Visa and Yum! Brands.
The Magellan Trust has been putting some cash to work in recent months, its cash level is down to only 14% of the portfolio, but it has been as high as 20% previously.
I think investing in international shares is very important for investors these days, particularly as economic growth in Australia slows with the decline of the property prices.
Foolish takeaway
Magellan Global Trust aims to pay a 4% distribution yield to shareholders and is trading at around its net asset value per unit. I think Magellan Global Trust is a solid idea for the long-term, I plan to hold it for many years to come.
