Magellan Global Trust

Portfolio gave a positive return for the June quarter: Magellan Global Trust (ASX: MGG), is an actively managed global equities fund and has a target Cash Distribution yield of 4% per annum to be paid semi-annually. The fund has invested in the portfolio of some of the world’s highest-quality businesses like Facebook, Alphabet (Google), Visa, Mastercard and Wells Fargo, and gave positive return in the June quarter. The fund has since inception in October 2017 outperformed its benchmark by 0.6%, after all fees. The fund has kept 21% of its portfolio as cash, as at June 2018, which is a good amount of cash on hand for downside protection. Moreover, the global stocks have performed well in the June quarter after the companies posted better than-expected earnings, as the US economy is getting strong, the Federal Reserve tightened monetary policy as expected by the market, Italy formed a workable coalition, and Japan's central bank kept up its monetary stimulus. Moreover, for the June quarter, Facebook surged on a view that the privacy issues regarding user data would not impede user and advertising growth. Apple stock price rose due to acceleration in services revenue and healthy iPhone revenue growth, which is an increase due to the news that the Warren Buffett-run Berkshire Hathaway had bought another 75 million Apple shares. Alphabet stock rose after it reported 26% increase in revenue for the first quarter, beating the estimates.
 
 
Fund Performance (Source: Company Reports)
 
MGG reported for weekly NAV of $1.6598, as at July 13, 2018. Overall, there is strong fund management, decent portfolio of blue chip global stocks and cash to balance the fund. Meanwhile MGG stock has risen 10.81% in three months as on July 19, 2018. Based on the foregoing, we give a “Buy” recommendation on the stock at the current price of $ 1.625.
 

National Storage REIT

Refinancing the debt facilities: National Storage REIT (ASX: NSR) has refinanced  its debt facilities after successfully negotiating the terms for it, which is a significant milestone for NSR. The facility was expected to be effective from 22^nd June 2018. As a result, the overall facility has been increased from AU$617 million to AU$715 million, and the average weighted tenor increased from 3.6 years to 4.7 years. The financial covenants have remained consistent with ICR at 2 times cover and the gearing covenant at 55%. The targeted gearing ratio range is between 25% and 40% as usual. This refinancing of debt is expected to support the acquisition and consolidation strategy. On the other hand, NSR has completed the acquisition of or entered into arrangements to acquire eight quality self-storage assets in Australia and New Zealand. This is for total of approximately $33 million for Australian acquisitions and total of approximately NZD $21 million for acquisition in New Zealand. The acquisitions were funded by NSR’s existing debt facility. Additionally, NSR for FY 18 expects underlying EPS in the range of 9.6-10.1 cents per stapled security. Meanwhile, NSR stock has risen 5.23% in three months as on July 19, 2018. Based on the foregoing, we give a “Hold” recommendation on the stock at the current price of $ 1.710.

 
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