Glenn Freeman: On the sidelines of Morningstar Investment Conference, I'm joined today by Hamish Douglass from Magellan. Now, in a fireside chat there you were talking about a number of different areas about investment markets and the business itself. And on the behavioural side of things, you were speaking about some of the lessons that you've learned.

One of the things that stood out was about not being afraid to change your mind when the facts change. And that strikes me as something that's relevant for individual investors as much as it is for people starting a business.

Hamish Douglass: Yeah, it's very, very important. We've all got behavioural biases in what we do. And you know, admitting that when you've made a mistake is very, very hard for people. It's very easy for people to start rewriting history and that was all that not knowable or actually, I'm still happy with something.

But when you make a mistake, you just really need to recognise that you've made a mistake because the facts have changed. And if the facts have changed, you should actually change as well. I use a number of techniques in the public eye.

So, the first thing you do is, you know you have to admit to yourself you've made the mistake. But what I often do is, I will write it down and then I meet to people in the office and then often with our clientele, I'll let all our clients know we've made the mistake. Because once you've done that, you've cleansed yourself…

Freeman: Sort of owning it?

Douglass: You need to own it. You really need to own the mistake and you need to learn from it to hopefully not repeat the same mistake twice. But in the business of investing, we're trying to predict the future and the future is highly unpredictable and things happen that aren't there. But when they do, you need to make sure you admit them, you learn from them and you change your course of action. I see many people digging themselves in and actually those mistakes end up compounding.

Freeman: Yeah, throwing good money after bad…

Douglass: Catching falling swords at the end of the day.

Freeman: And the other thing that – you were talking about also some of the innovations that you've introduced over the years since launching Magellan. And one of those that in the investment vehicles exchange-traded managed funds. Can you just go over for us the thinking behind launching that vehicle?

Douglass: Well, the real thinking behind which we now can call active ETFs, which is very nice, because it's actually describing what they are, an actively-managed ETF. People understand ETFs on the stock exchange. What we are trying to do is to make the investing in global equities in an active-managed a lot more accessible for average investors and also for advisors. Traditionally, you had to invest in a managed fund like ours off market. You had to fill in maybe an 18-page application form. If you want to buy 1,000 units in our trust off market, you can't actually do it. You could only buy a set dollar amount and you don't know the price until the next day.

So, we said, this is very, very unfriendly, especially for people wanting to diversify their money globally and they want to do it with an active manager.

So, we wanted to really simplify the process and do it in an environment where a lot of direct retail investors are very familiar. They have CommSec accounts, but they couldn't through their CommSec account buy a managed global equity fund. They're maybe interested in diversifying in global equities, they could only buy the index.

So, what we've done is, bring the sort of managed fund world, the actively-managed managed fund, world into a very, very simple world on the stock exchange with no application forms where you can go and buy 1,000 units and you know what the price is and you can speak to your broker or go to CommSec and you can buy them instantaneously, get a confirmation note in a world…

Freeman: And you can see the price throughout the day…

Douglass: You can see the price. We give live pricing throughout the day. So, what we wanted to do is just simplify the world to make our world, which was global equities, much more accessible – and if anyone who used to use platforms of your adviser, actually it's a lower-cost administration world as well and take the friction out of it for people.