The Qantas Airways Ltd (ASX: QAN) share price has walked through today’s session in the green, currently 3.05% up on the day.

This continues a solid gain over the past week, where Qantas shares have climbed 13.6% higher in this time.

What’s behind the Qantas share price lately?

There have been several tailwinds behind the Qantas share price over the last week or so.

Despite reporting a $2.3 billion pre-tax loss in its FY21 results, investors seem confident that the company will recover strongly as the restrictions on domestic and international air travel are gradually lifted. The Qantas share price is up over 13% since reporting its FY21 earnings despite the mixed results.

Adding fuel to the engine, Qantas recently outlined a plan to potentially restart international flight routes from as early as December.

The company is confident the 80% vaccination target will be met in that month and is basing its decision on the target being reached.

Travellers could then fly to other low-risk COVID-19 countries, such as Singapore and the United Kingdom.

What are analysts saying?

One leading broker, JP Morgan, believes in the recovery of Qantas and is bullish on Qantas shares.

According to a note, the broker was happy with Australia’s vaccine uptake fuelling a recovery in the Qantas share price. It has reiterated its overweight rating on Qantas shares and increased its price target by 10 cents to $5.80.

This implies a potential upside of around 11% from the current market price of $5.24.

What else did the broker say?

Analysts at the investment bank believe Qantas is well-positioned to weather the storm caused by the pandemic. Speaking on what measures Qantas has taken, JP Morgan said the company had “taken material costs out of its business, around $1.1 billion of which are likely to be ongoing savings from FY23”.

It also added that it favoured Qantas’ “high proportion of earnings from domestic and loyalty at 70–75% of earnings, its strong relative balance sheet positioning and more favourable competitive position – both domestically and internationally”.

In light of this commentary, the broker has updated its modelling to reflect current market conditions. It now assumes “domestic capacity is at 77% in FY22 and back to above 2019 levels in FY23”. This forecast is also in line with Qantas’ guidance.

On the international side, the broker estimates that FY22 capacity will reach 25% of 2019 levels, and then rapidly increase to 70% by FY23. It believes international capacity will “approach pre-COVID-19 levels by FY24”.

Bringing it all together, JP Morgan believes this could be a buying opportunity for investors moving forwards.

The post What’s this leading broker saying about the Qantas share price? appeared first on The Motley Fool Australia.

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• Leading brokers name 3 ASX shares to buy today
• Planes flying by Christmas? And worrying signs from retailers. Scott Phillips on Weekend Sunrise
• ASX 200 Weekly Wrap: A mixed bag of earnings dominates ASX
• It has been a great week for the Webjet (ASX:WEB) share price

The author Zach Bristow has no positions in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The All Ordinaries Index (ASX: XAO) was on form again in August, recording its 11th consecutive monthly gain.

While a large number of ASX All Ordinaries shares were on form over the period, some recorded particularly strong gains.

Which were the best performing ASX All Ordinaries shares in August?

The best performer on the ASX All Ordinaries last month by some distance was the Novonix Ltd (ASX: NVX) share price with a gain of 75%. This was driven by news that US energy giant Phillips 66 has entered into an agreement to acquire a 16% stake in Novonix. Phillips 66 notes that the investment will expand its presence in the battery supply chain. It will also help advance Novonix’s production of synthetic graphite for high-performance lithium-ion batteries.

The next best performing ASX All Ordinaries share was WiseTech Global Ltd (ASX: WTC) with a 57% gain. The logistics solutions company’s shares surged higher after reporting an 18% increase in revenue to $507.5 million and a 63% jump in EBITDA to $206.7 million in FY 2021. The latter was well ahead of its EBITDA guidance of $165 million to $190 million. Looking ahead, management is expecting further strong growth in FY 2022. It has provided guidance for EBITDA growth of 26% to 38%.

Which other shares performed strongly?

Another ASX All Ordinaries share that caught the eye in August was Ardent Leisure Group Ltd (ASX: ALG). Its shares rose 52.5% over the month, with the majority of this gain coming following the release of its full year results. The Dreamworld and Main Event operator reported a 165.6% increase in EBITDA to $67.3 million for FY 2021 thanks to a strong second half. Pleasingly, management advised that it is optimistic that this positive momentum will continue into FY 2022.

Finally, the PPK Group Limited (ASX: PPK) share price was another highlight on the All Ordinaries with a gain of 49.9% in August. This was despite the investment company experiencing delays in its plans to spin off lithium-sulphur chemistry battery creator Li-S Energy via an IPO. Li-S Energy is expected to list at 85 cents per share, giving it a market capitalisation of around $544 million.

The post These were the best ASX All Ordinaries performers in August appeared first on The Motley Fool Australia.

More reading

• Which shares on the ASX 300 are on the move today?
• Guess which sector August’s top performing ASX shares all came from
• Here’s what a top broker thinks of the Ardent Leisure Group (ASX:ALG) share price
• This ASX 200 share delivered the highest share price gains this earnings season
• These were the best performing ASX 200 shares in August

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended WiseTech Global. The Motley Fool Australia owns shares of and has recommended WiseTech Global. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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August was a bumper month for ASX 200 healthcare shares with broad based buying across the sector.

The S&P/ASX 200 Health Care (INDEXASX: XHJ) index rallied 6.8% last month to an 18-month high and less than 3% away from all-time highs.

The solid performance was headlined by these top performing players.

Top performing ASX 200 healthcare shares in August

Nanosonics Ltd (ASX: NAN)

The Nanosonics share price rallied 23.5% in August to a 7-month high of $6.62.

Nanosonics delivered its FY21 results on Tuesday, 24 August when its share price surged 21.9% to $7.18.

The company delivered a relatively flat financial performance with revenues up 3% to $103.1 million while net profit after tax declined 15% to $8.6 million.

Encouragingly, management said the company experienced a “significant recovery” in the second half of FY21, with revenues bouncing 16.3% compared to 2H20 figures.

Management believes this momentum is likely to continue, expecting double-digit revenue growth figures in FY22.

Pro Medicus Limited (ASX: PME)

Pro Medicus is another ASX 200 healthcare share that surged after the release of its FY21 results.

The Pro Medicus share price rallied 15.6% to $65.35 on Wednesday, 18 August after the company reported a 19.5% increase in FY21 revenue to $67.9 million and a 33.7% lift in net profit after tax to $30.9 million.

Management hailed the year as “our biggest year in terms of both sales and implementations, laying the foundations for a further step-up in exam volumes in FY22”.

Despite the strong rally on the day of its results announcement, its gains would fade to 8.78% for the month of August.

Sonic Healthcare Ltd (ASX: SHL)

The Sonic Healthcare share price rallied 8.45% in August.

In contrast to the other top performing ASX 200 healthcare shares, the Sonic Healthcare share price fell almost 3% on the day of its FY21 results.

At face value, the company delivered an upbeat financial performance with revenue up 28% to $8.8 billion and net profit surging 149% to $1.3 billion.

However, the company flagged that its growth has been enhanced by COVID-19 testing revenue from its ~60 laboratories around the world.

Sonic Healthcare reported that COVID-19 PCR volumes were lower in the second half of the year versus the first half. However, volumes have been increasing again with the spread of the Delta variant.

The post Top performing ASX 200 healthcare shares in August appeared first on The Motley Fool Australia.

More reading

• Sonic Healthcare (ASX:SHL) share price struggles despite COVID passport positioning
• 3 top ASX results from week four of reporting season
• Here’s why the Pro Medicus (ASX:PME) share price is up 78% this year
• Sonic Healthcare (ASX:SHL) share price hits record high at $43.43
• Top brokers name 3 ASX shares to sell today

Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Nanosonics Limited and Pro Medicus Ltd. The Motley Fool Australia owns shares of and has recommended Nanosonics Limited and Pro Medicus Ltd. The Motley Fool Australia has recommended Sonic Healthcare Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The S&P/ASX 300 Index (ASX: XKO) is dragging lower on Wednesday, following the wrap up of the August earnings season.

During mid-afternoon trade, the ASX 300 is down 0.31% to 7,513 points.

Let’s take a look at which ASX companies are making headlines today.

Paladin Energy Ltd (ASX: PDN)

The Paladin share price is rocketing 12.75% to 57.5 cents, despite no market-sensitive news out of the company today.

The uranium producer released its full-year results to the market last Friday, highlighting progress on the Langer Heinrich Mine.

It seems investors are optimistic about Paladin after its shares have risen by more than 20% in the past week.

Dicker Data Ltd (ASX: DDR)

Another strong mover for the start of the week is the Dicker Data share price, up 5.74% to $13.44.

Again, with no news from the IT distributor today, its shares are rebounding from the steep declines recently recorded.

The company last reported that its chair and CEO, David Dicker, sold a portion of his shares in an on-market trade.

Dicker Data shares reached a record high of $16.60 on Thursday after reporting its FY21 interim results.

Novonix Ltd (ASX: NVX)

The Novonix share price is storming high with a 5.75% gain to $4.78.

The lithium company released its full-year results to the market last Thursday, highlighting revenue growth of $5.2 million, up 22.9%.

It seems investors are buoyant on Novonix after its shares rose 20% in the past week. In August alone, the company’s share price is more than 80% higher, and up almost 300% year to date.

It’s worth noting that Novonix shares are closing in on the all-time high of $4.96 reached on Monday.

And which ASX 300 companies are the biggest fallers?

Blackmores Ltd (ASX: BKL)

Heading south today is the Blackmores share price, down 6.61% to $93.20.

Despite the health supplements company not providing any new information to the ASX today, it appears investors are happy to take their profits. This follows the company’s massive share price gains since 24 August, up around 30%.

Blackmores shares hit a multi-year high of $99.80 just yesterday.

Mineral Resources Limited (ASX: MIN)

Also being weighed down by investors today is the Mineral Resources share price, down 3.82% to $52.81.

With the spot price of iron ore and lithium stable, for now, investors have been quick to take profits off the table.

The mining service company’s shares zoomed to a record high of $65.38 at the end of July. Ever since, its shares have been slowly treading lower.

The post Which shares on the ASX 300 are on the move today? appeared first on The Motley Fool Australia.

More reading

• Why BlueBet, Dicker Data, Immutep, & Sandfire are charging higher
• Why the Dicker Data (ASX:DDR) share price is powering 6% today
• ASX 200 midday update: Metcash update, Wesfarmers goes ex-div
• Guess which sector August’s top performing ASX shares all came from
• The Blackmores (ASX:BKL) share price surged 35% in August to a 52-week high. Here’s why.

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Dicker Data Limited. The Motley Fool Australia owns shares of and has recommended Blackmores Limited and Dicker Data Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Woodside Petroleum Limited (ASX: WPL) share price is among the leaders of the ASX 200 energy sector today.

It’s bringing up the lead out of the 3 majors, with the Woodside share price having gained 1.33% to trade at $19.75.

Meanwhile, the Santos Ltd (ASX: STO) share price is up 1.16% at $6.12 and Oil Search Ltd (ASX: OSH) shares have boosted 0.27% to reach $3.75.

However, some of the S&P/ASX 200 Index‘s (ASX: XJO) smaller energy companies are blowing Woodside Petroleum out of the water today.

Beach Energy Ltd (ASX: BPT), with its $2.3 billion market capitalisation, has seen its share price gain 3.52% to trade at $1.09. While the share prices of Whitehaven Coal Ltd (ASX: WHC) and Ampol Ltd (ASX: ALD) are also outdoing Woodside’s, with gains of 4.74% and 1.6% respectively.

In fact, the only ASX 200 energy share seeing red today is Viva Energy Group Ltd (ASX: VEA). Its share price has fallen 0.23% to trade at $2.13.

Let’s look at what’s turned the ASX 200 energy sector into a sea of green today.

What’s boosting the share price’s of Woodside and its peers?

It’s a good day to be an energy company on the ASX.

The share prices of Woodside and its ASX 200 energy peers are gaining alongside the price of oil.

At the time of writing, the Brent Oil price has increased 0.63% to trade at US$72.34 a barrel. The Crude Oil WTI price has also gained 0.69% and it currently sitting at US$68.97 per barrel.

That fortunate occurrence may well be what’s keeping the ASX 200 energy sector, and the Woodside share price, in good spirits today.

Meantime, the broader market is having a rough trot today. At the time of writing, the ASX 200 Index has slipped 0.27% with the All Ordinaries Index (ASX: XAO) also down 0.27%.

The post Woodside (ASX: WPL) share price leads ASX 200 energy sector giants on Wednesday appeared first on The Motley Fool Australia.

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• How did the ASX 200 shares perform compared to the FTSE 100 shares in August?
• These were the best performing ASX 200 shares in August

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned.

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Sezzle Inc (ASX: SZL) share price has been a positive performer this week.

Over the last three trading sessions, the buy now pay later (BNPL) provider’s shares have risen 3.5%.

Why is the Sezzle share price rising this week?

There appear to have been a couple of catalysts for the rise in the Sezzle share price this week.

One is the release of its full year results on Monday. Although much of this result was pre-released earlier in the month, investors appear to have been pleased with some of management’s comments.

For example, in its report it reminded investors of its major deal with Discover Financial Services.

It said: “On July 14, 2021, Sezzle agreed to issue Discover Financial Services LLC $30,000,000 of the Company’s common stock at a price of $6.58 per share (A$8.83), which was completed on July 19, 2021. The Company and Discover are finalizing a definitive commercial agreement, in which the parties propose to enter into an expanded partnership, including plans for a buy now, pay later network solution on the Discover Global Network, as well as a dedicated referral program introducing Discover credit and debit products to the Company’s consumer base.”

This has the potential to give its customer numbers and underlying merchant sales a major boost once operational. Which could be good news for the Sezzle share price.

What else has been happening?

Also potentially giving the Sezzle share price a boost is an announcement out of the company yesterday.

According to the release, Sezzle is partnering with California Pet Pharmacy, an accredited online pet pharmacy dispensing pet medications to all 50 states.

The partnership will see Sezzle become the preferred BNPL option for California Pet Pharmacy. This will allow pet owners to create a healthy lifestyle for their pets without the financial burden that comes with purchasing expensive pet medications.

Sezzle’s Chief Revenue Officer, Veronica Katz, commented: “We are very pleased to launch our partnership with California Pet Pharmacy. As the Buy Now, Pay Later space heats up, the necessity for consumers to split payments in a safe and reliable way is growing across all industries.”

Management notes that debuting BNPL in pharmaceuticals and pet care is a natural next step for Sezzle as it focuses on bringing flexible payments to consumers across all verticals.

The Sezzle share price is up 5% in 2021.

The post Why the Sezzle (ASX:SZL) share price is lifting this week appeared first on The Motley Fool Australia.

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• Why Breville, CBA, Magellan, & Sezzle shares are tumbling lower today
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Owners of Magellan Financial Group Ltd (ASX: MFG) shares might want to brace for new competition as reports of GQG Partners‘ plan to list on the ASX emerge.

Right now, the Magellan share price is $42.48, having gained 0.3% today.

Let’s take a closer look at GQG Partners’ rumoured debut and compare the 2 asset managers.

Holders of Magellan shares beware: GQG Partners reportedly plans its IPO

Holders of Magellan shares might want to keep an eye out for upcoming initial public offerings (IPOs) as GQG Partners is reportedly planning to debut on the ASX before the end of 2021.

According to the Australian Financial Review (AFR), GQG Partners plans to front up to Magellan with an IPO worth more than $5 billion.

GQG Partners is an asset manager with most of its operations in the United States. Though, it has an office in both London and Sydney.

The fund has more than $82 billion of assets under management and provides its services to more than 778 organisations.

The AFR claims GQG Partners manages assets for Australia’s AustralianSuper, Rest Super and Cbus.

GQG is said to believe that listing on the ASX will boost its brand recognition among Australian investors.

How Magellan compares

Magellan shares might be shaking in their boots on news of a comparable asset manager’s planned IPO.

According to the AFR, GQG Partners likely believes it’s a better investment than Magellan due to its growth profile.

The publication states the firm’s assets under management have grown by nearly 100% since this time last year.

For comparison, Magellan reported its funds under management increased 9% in FY21. As of 30 June 2021, the ASX-listed fund was charged with managing $103.7 billion worth of assets.

Additionally, Magellan’s profits dropped 33% over the financial year just been.

The market reacted to the drop as one would expect. Magellan’s shares fell 10% on the back of its FY21 earnings.

Thus, it’s likely a bad time for Magallan, and those who own its shares, to learn a competitor might soon be encroaching on its block.

The post Own Magellan (ASX:MFG) shares? A $5b competitor could be hitting the ASX appeared first on The Motley Fool Australia.

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• BHP to sell assets to Woodside, Domain surges and Magellan crashes. Scott Phillips on Nine’s Late News
• The ASX reporting wrap-up: Magellan, Breville, Domain
• ASX 200 drops, Magellan (ASX:MFG) and Breville (ASX:BRG) sink after FY21 results

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned.

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Investors shouldn’t view ASX 200 bank shares as a homogenous group and last month’s reporting season can help you pick the next winners.

While the share prices of ASX banks have performed well against the S&P/ASX 200 Index (Index:^AXJO), JPMorgan believes this could be about to change.

The broker reviewed the sector following the August profit season and made changes to its recommendations.

ASX 200 banks reporting season trends

Mind you, not all of the ASX 200 bank shares posted full year results last month. In fact, only Commonwealth Bank of Australia (ASX: CBA) and Bendigo and Adelaide Bank Ltd (ASX: BEN) did.

The other ASX big banks issued updates instead. That was enough for JP Morgan to identify some key themes.

“Margin trends were mixed this quarter/half and we expect mortgage margin headwinds to re-emerge, supporting our preference for more business-exposed banks,” said the broker.

The ASX 200 bank upgraded to “buy”

This is one reason why JPMorgan upgraded its recommendation on the National Australia Bank Ltd. (ASX: NAB) share price to “overweight”.

At the same time, the broker cut its rating on the Australia and New Zealand Banking GrpLtd (ASX: ANZ) share price to “neutral” from “overweight”.

“We have become more concerned about ANZ’s struggles in the Australian mortgage market, and think the turnaround will be more protracted than we first thought,” said JPMorgan.

“When combined with the pushback of rate rises by the RBNZ due to the NZ COVID-19 outbreak, we struggle to see the near term catalysts to re-rate the stock despite valuation support.”

Why the NAB share price can outperform

In contrast, the broker reckons that NAB is well positioned to grow revenues. The bank has strong customer satisfaction scores with both consumers and businesses. NAB is also the leader among the ASX big banks for business lending.

This should mean more stable margins as the residential lending market is more competitive compared to small and medium business loans.

“AUSTRAC issues remain to be resolved, but we already incorporate AML investment in our forecasts with plenty of capital headroom to absorb any one-off hit,” added JPMorgan.

“Prolonged lockdowns may impact SME asset quality but provisions look solid.”

Best ASX 200 bank shares to buy now

However, NAB is not the broker’s top pick for the sector. The ASX bank that represents the best buy is the Macquarie Group Ltd (ASX: MQG) share price, according to JPMorgan.

This is followed by the NAB share price then the Bank of Queensland Limited (ASX: BOQ) share price.

The post Top broker picks best ASX 200 bank shares to buy coming out of reporting season appeared first on The Motley Fool Australia.

More reading

• Why the Rio Tinto (ASX:RIO) share price is down 17% in a month
• ASX 200 midday update: Metcash update, Wesfarmers goes ex-div
• How did the ASX 200 shares perform compared to the FTSE 100 shares in August?
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• These were the worst performing ASX 200 shares in August

Motley Fool contributor Brendon Lau owns shares of Australia & New Zealand Banking Group Limited, Commonwealth Bank of Australia, Macquarie Group Limited, and National Australia Bank Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is off its intraday lows but still trading lower. At the time of writing, the benchmark index is down 0.3% to 7,513.5 points.

Four ASX shares that are not letting that hold them back are listed below. Here’s why they are charging higher:

BlueBet Holdings Ltd (ASX: BBT)

The BlueBet share price is up 4% to $2.61. Today’s gain appears to have been driven by a broker note out of Morgans this morning. In response to the sports betting company’s full year results, the broker has retained its add rating and lifted its price target to $2.80. It was pleased with BlueBet’s performance in FY 2021 and expects further strong growth in FY 2022.

Dicker Data Ltd (ASX: DDR)

The Dicker Data share price has rebounded 7% to $13.57. Investors had been selling this IT distributor’s shares in recent trading sessions following the sale of shares by its CEO, David Dicker. However, Mr Dicker appears to have eased any concerns brought about by the sale. He said: “This sale seems to have provoked a loss of confidence in DDR which is entirely unwarranted. It seems that people have read things into this sale that are just not there. This sale does not mean, in any way, that I am reducing my role or involvement with Dicker Data.”

Immutep Ltd (ASX: IMM)

The Immutep share price is up 7.5% to 57 cents. This follows news that the biotechnology company has completed the recruitment for Stage 2 of Part B of its Phase II TACTI-002 study. This trial is evaluating the combination of Immutep’s Efti with Merck’s Keytruda product in patients with second line head and neck squamous cell carcinoma or non-small cell lung cancer.

Sandfire Resources Ltd (ASX: SFR)

The Sandfire Resources share price is up 3% to $6.70. This appears to have been driven partly by a positive broker note out of Morgans this morning. According to the note, the broker has upgraded the copper miner’s shares to an add rating with a $7.61 price target. Morgans notes that Sandfire’s full year result was stronger than it expected. It also feels positive on the future due to favourable copper prices.

The post Why BlueBet, Dicker Data, Immutep, & Sandfire are charging higher appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Dicker Data Limited. The Motley Fool Australia owns shares of and has recommended Dicker Data Limited. The Motley Fool Australia has recommended BlueBet Holdings Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Magellan Financial Group Ltd (ASX: MFG) is well known for providing a slate of investment options for its Australian customer base. You don’t become one of the largest fund managers in the country without a comprehensive suite of investment options, after all.

But something strange has happened to one of Magellan’s flagship funds today. That would be regarding the Magellan High Conviction Trust (ASX: MHHT). As the name implies, this fund holds only Magellan’s “highest-conviction ideas”, with a “concentrated portfolio invested in 8 to 12 of the world’s best global stocks”. In contrast, the popular Magellan Global Fund (ASX: MGF) has a portfolio of “20 to 40 of the world’s best global stocks”.

In exchange for the higher management fee of 1.5% (compared to the 1.35% for the Global Fund), the concentrated High Conviction Trust has no benchmark. It instead focuses on “risk-adjusted returns”. It also has unlimited hedging capacity, as well as no limit on its minimum or maximum cash position.

Papa’s got a brand new… ticker code

But investors in Magellan’s High Conviction Trust may have noticed something strange this morning. They have woken up with a different investment from what they had when they went to sleep. That’s because, as of today, the Magellan High Conviction Trust has changed from a closed-ended Listed Investment Trust (LIT) to an open-ended actively managed exchange-traded fund (ETF). To reflect this change, this fund now has the new ticker code of ‘MHHT’, as opposed to the old ‘MHH’.

This move shouldn’t have been unexpected though. Magellan first flagged it back in early July, and gave the final green light on 26 August after receiving approval from the ASX.

So why is Magellan changing one of its popular funds? Well, Magellan’s CEO Brett Cairns told us why back in July:

On balance, we believe the benefits for unitholders of reducing the trading discount in MHH outweighs the benefits of MHH remaining as a closed-ended fund. We believe transitioning the fund to an open-ended Active ETF is in the best interests of investors as it will allow direct access to the fund for applications and redemptions and see the units in the fund trade at a tight spread to net asset value going forward.

Why has the Magellan High Conviction Trsut changed its structure?

This makes sense for investors. As a closed-ended structure, the old High Conviction Trust had the potential to trade for less than the fund’s actual worth. This it did, and habitually. The gap between this fund’s net tangible assets (NTA) and share price became so apparent that units of the fund were acquired by Geoff Wilson’s new Listed Investment Company (LIC) WAM Strategic Value Ltd (ASX: WAR). As we covered at the time of this purchase, WAM Strategic Value’s whole purpose is to find undervalued assets in similar scenarios.

However, the new open-ended structure will allow the Magellan High Conviction Trust to consistently trade in line with the NTA of the underlying fund, as Mr Cairns pointed out above.

This shift in strategy seems to be working too. Magellan’s High Conviction Trust last traded under its old ticker and structure on 26 August. Back then, the unit price for MHH shares closed at $1.775 a unit. Today, upon the new MHHT debut, this now-ETF is asking a unit price of $1.825 at the time of writing. That’s pretty much in line with its current NTA per unit.

The post Why did Magellan High Conviction Trust (ASX:MHH) just morph into an active ETF? appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen owns shares of Magellan High Conviction Trust. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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