Chris Gosselin speaks with Alan Pullen from Magellan Investment Partners about the philosophy behind the Magellan Global Opportunities Fund. Alan explains how the team focuses on high-quality global businesses, disciplined valuation, and long-term investing-especially important amid today's AI-driven market volatility.

Funds operated by this manager:

Magellan Global Fund (Open Class Units) ASX:MGOC , Magellan Infrastructure Fund , Magellan Global Opportunities Fund No.2 , Magellan Infrastructure Fund (Unhedged) , Magellan Global Fund (Hedged) , Magellan Core Infrastructure Fund , Magellan Global Opportunities Fund Active ETF (ASX:OPPT)

Hedge Clippings | 21 November 2025

Reflecting on last week's edition of Hedge Clippings we're struck by the fact that we could simply reproduce the commentary of the chances of a rate cut both here and in the US, but with some small adjustments to the actual numbers.

In the case of the RBA's next meeting, due on the 8th and 9th of December, we'd suggest the decision to hold has pretty much been set in stone, with the only chance of a cut being next Wednesday's release of October CPI numbers. While the RBA's minutes of the November meeting showed the decision to hold was unanimous, there were plenty of variables and possibilities about how inflation and the labour market might influence monetary policy. Hedging of bets (appropriate, given the meeting was held on Cup Day) was covered by consideration of multiple factors, uncertainties, resulting in "on the one hand" and then in the next sentence (or paragraph) "on the other hand".

At least we know the Board explored all the options!

Meanwhile, over in the US, last week we noted that the market's near overwhelming certainty (97%) of a rate cut just a month ago, had dropped to 50/50 based on a FactSet poll of market economists. This has now slipped further to being an outside chance at 22%, in spite of Trump's rhetoric and abuse directed at Jerome Powell, and the pressure he's trying to put him under. From what we've observed, Powell, to use the phrase coined by Maggie Thatcher way back in 1980, "is not for turning." As it is, Powell's term ends next May, so he probably feels he has a point to make regarding his independence, and the likelihood of his appointment for another (third) term is zilch, at least while Donald is in the White House.

He might as well tough it out.

The US Fed's next FOMC meeting is also in the second week of December, so on current projections, there'll be plenty of discussion and opinion, but not much action.

Where there is action is in equity markets, with increasing calls from various well-known parties that the stretched valuations in the tech sector can't continue forever. Others of course maintain the usual mantra that "this boom is different" - and while it may be, the signs and psychology seem very similar.

The following chart, courtesy of Callum Thomas of The Weekly Chartstorm, paints an eerie picture:

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Unlocking Indonesia's growth potential: low leverage, rich in resources, and market inflection in 20

Pendal

November 2025

(5 min read)

This article was originally published by Pendal Group in November 2025, following a quarterly Australian inflation update and the Reserve Bank of Australia's November meeting. While some data points and forecasts reflect conditions at that time, the core insights remain relevant for investors and fund managers. In particular, the discussion highlights how inflation surprises can alter monetary-policy expectations, influence fixed-income valuations, and reshape portfolio positioning. Readers should consider the broader themes around inflation dynamics and policy response rather than the short-term market context.

Indonesia's President Prabowo Subianto has an ambitious target to reach 8% annualised GDP growth by 2029. This would represent a sharp acceleration from an annual growth rate of ~5% for most of the past decade.

Chart 1: Indonesia's annualised GDP growth

Source: Trading Economics.

Unlike other economies, however, Indonesia is one of the least leveraged countries in the world. With government debt-to-GDP below 40%, there is ample room to spend to lift economic growth.

Chart 2: 2024 government debt-to-GDP for selected countries

Source: Trading Economics.

Typical of years following the election of new Indonesian presidents, government spending and economic activity has been weak in 2025. This presents the potential for a rebound in 2026 as newly installed government ministers and SOE leadership teams begin to execute on key programs and strategies.

To support this growth agenda, a new growth-focused Minister of Finance, Purbaya Yudi Sadewa, took office in September 2025. We are beginning to see the initial impacts of his changes to monetary and fiscal policy, with money supply growth jumping from mid-single digits in August to nearly 20% YoY in September. This will likely help to kick-start the economy into next year.

Chart 3: BI adjusted M0 growth versus M2 versus loans growth (% YoY)

Source: BofA Global Research.

In addition to low leverage, Indonesia is rich in natural resources, notably critical minerals such as nickel. In an inflationary world, these resources represent assets to the Indonesian economy which can continue to fetch ever-higher prices, supporting a stronger current account.

Chart 4: Indonesia plays a significant role in the global supply of some mineral and agricultural goods

Source: International Trade Center, Ministry of Energy and Mineral Resources, USGS, CEIC, Goldman Sachs Global Investment Research.

Indonesia's downstream verticalisation strategy to add value to its "rocks in the ground" has dramatically increased the export value of nickel-based products. As it moves up the value chain in different commodities, this can add material upside to the GDP growth outlook.

Chart 5: Nickel-related products export value increased ~8-fold since 2013 (left); Indonesia is a major producer of nickel, whose derivatives have high export value multiplier (right)

Source: International Trade Center, Haver Analytics, Goldman Sachs Global Investment Research (left); International Trade Center, Ministry of Energy and Mineral Resources, USGS, CEIC, Goldman Sachs Global Investment Research (right).

In light of temporary sluggishness in the domestic economy in 2025, we are finding highly attractive opportunities to own leading quality franchises in Indonesia. Some of these companies are generating dividend yields above 10% and delivering ROE approaching 20%, all while trading at discounted valuations.

Chart 6: Top yielding large cap APAC banks - FY25E yield (%)

Source: BofA Global Research.

Indonesia represents an exciting emerging economy, with a huge population of more than 285 million, rich in sought-after resources. This can support strong economic activity and business earnings into the future, particularly in an inflationary world. Trading at depressed levels of <12x forward P/E, nearly 2 standard deviations below the 15-year mean, and with strong dividend yields in leading larger corporates, now is the time for investors to reconsider Indonesia. These kinds of valuations do not come around often!

Chart 7: Indonesia MSCI Index forward P/E

Source: Citi Research, Bloomberg.

Funds operated by this manager:

Pendal MicroCap Opportunities Fund , Pendal Global Select Fund - Class R , Pendal Sustainable Australian Fixed Interest Fund - Class R , Pendal Focus Australian Share Fund , Pendal Horizon Sustainable Australian Share Fund , Regnan Credit Impact Trust Fund , Pendal Sustainable Australian Share Fund , Pendal Sustainable Balanced Fund - Class R , Pendal Multi-Asset Target Return Fund

 This information has been prepared by Pendal Fund Services Limited (PFSL) ABN 13 161 249 332, AFSL No 431426 and is current as at December 8, 2021. PFSL is the responsible entity and issuer of units in the Pendal Multi-Asset Target Return Fund (Fund) ARSN: 623 987 968. A product disclosure statement (PDS) is available for the Fund and can be obtained by calling 1300 346 821 or visiting www.pendalgroup.com. The Target Market Determination (TMD) for the Fund is available at www.pendalgroup.com/ddo. You should obtain and consider the PDS and the TMD before deciding whether to acquire, continue to hold or dispose of units in the Fund. An investment in the Fund or any of the funds referred to in this web page is subject to investment risk, including possible delays in repayment of withdrawal proceeds and loss of income and principal invested. This information is for general purposes only, should not be considered as a comprehensive statement on any matter and should not be relied upon as such. It has been prepared without taking into account any recipient's personal objectives, financial situation or needs. Because of this, recipients should, before acting on this information, consider its appropriateness having regard to their individual objectives, financial situation and needs. This information is not to be regarded as a securities recommendation. The information may contain material provided by third parties, is given in good faith and has been derived from sources believed to be accurate as at its issue date. While such material is published with necessary permission, and while all reasonable care has been taken to ensure that the information is complete and correct, to the maximum extent permitted by law neither PFSL nor any company in the Pendal group accepts any responsibility or liability for the accuracy or completeness of this information. Performance figures are calculated in accordance with the Financial Services Council (FSC) standards. Performance data (post-fee) assumes reinvestment of distributions and is calculated using exit prices, net of management costs. Performance data (pre-fee) is calculated by adding back management costs to the post-fee performance. Past performance is not a reliable indicator of future performance. Any projections are predictive only and should not be relied upon when making an investment decision or recommendation. Whilst we have used every effort to ensure that the assumptions on which the projections are based are reasonable, the projections may be based on incorrect assumptions or may not take into account known or unknown risks and uncertainties. The actual results may differ materially from these projections. For more information, please call Customer Relations on 1300 346 821 8am to 6pm (Sydney time) or visit our website www.pendalgroup.com