Explaining the changes to our fees on the Allan Gray Local Investment Platform
From 1 February 2027, we will be changing the fees for Allan Gray funds. These changes aim to make our fees easier to understand and compare with those of other investment managers while also allowing investors to benefit from lower administration fee tiers as the total value of their investments grow.
Additional changes to the fees for the Allan Gray Money Market Fund and Allan Gray Bond Fund on the local platform will take effect from 1 November 2027.
Learn more about these changes.
Currently, Allan Gray funds charge a single all-inclusive fee within the funds that covers both the investment management fee (which includes investment research and selection) and administration fee (which covers the servicing and record-keeping of your investments).
From 1 February 2027, we will separate the administration fee from the fee charged within Allan Gray funds, except for the Allan Gray Bond Fund and Allan Gray Money Market Fund (refer to the relevant section below). The fee charged within Allan Gray funds will cover investment management only, and a separate administration fee will be charged and shown as a distinct line item on your statements.
To achieve this, we are introducing a new class for the Allan Gray funds on the local platform. The new class will have lower fee parameters (i.e. lower fixed fees, fees at benchmark, maximum fees and minimum fees) on assets managed by Allan Gray. In addition, the new class will invest in unbundled Orbis fund classes that charge a fee for investment management only.
The administration fee on Allan Gray funds, which is currently reported as a flat 0.20% per annum (excl. VAT), will change to a tiered administration fee ranging down from 0.50% to 0.075% per annum (excl. VAT) as your investment grows. The tiered fee will be determined by the total value of your investments across the Allan Gray Local Investment Platform, Allan Gray Offshore Investment Platform and Allan Gray Offshore Endowment.
Total investments below R50 000
If your total investment value is less than R50 000, the tiered fee will be replaced by a flat administration fee of 1% per annum (excl. VAT).
If you are invested in the Allan Gray Tax-Free Investment and the value of your tax-free investment account(s) is equal to or greater than the prevailing annual tax-free investment contribution limit, the flat administration fee of 1% (excl. VAT) will not apply. Instead, the administration fee for your tax-free investment account(s) will be calculated according to the fee tiers described above.
Your total fees may therefore increase or decrease depending on the size of your investments.
Allan Gray and Orbis will adopt a simpler and more consistent approach to calculating performance-based investment management fees.
Allan Gray and Orbis’ performance-based investment management fees consist of two components:
- A fee at benchmark (or base fee), which is the fee that is charged for performance equal to the benchmark.
- A performance component, which depends on the outperformance or underperformance of the fund, after the deduction of the fee at benchmark (or base fee), relative to its benchmark (i.e. alpha).
From 1 February 2027, we will update the way performance fees are calculated in each fund to deduct the fee at benchmark applicable to each class in order to calculate the outperformance or underperformance of that class and any performance fee applicable. This approach will be consistent with Orbis.
We will align the administration fees for the Allan Gray Bond Fund and Allan Gray Money Market Fund with that of other Allan Gray funds.
From 1 November 2027, the fee within the Allan Gray Bond Fund will reduce marginally, while the fee within the Allan Gray Money Market Fund will stay the same. The tiered administration fee will also apply for both funds.
Total investments below R50 000
If your total investment value is less than R50 000, the tiered fee will be replaced by a flat administration fee of 1% per annum (excl. VAT).
If you are invested in the Allan Gray Tax-Free Investment and the value of your tax-free investment account(s) is equal to or greater than the prevailing annual tax-free investment contribution limit, the flat administration fee of 1% (excl. VAT) will not apply. Instead, the administration fee for your tax-free investment account(s) will be calculated according to the fee tiers described above.
Although the new tiered administration fee combined with revised investment management fees will increase the total cost of investing in these funds, both funds will remain competitively priced relative to similar funds in the market.
The total fee you pay may increase, decrease, or remain unchanged, depending on the change to your administration fee and the Allan Gray funds you are invested in.
You will pay lower fees within most Allan Gray funds for investment management only.
Your administration fee on Allan Gray funds will change from a flat fee to a tiered administration fee that will depend on the total value of your investments across the Allan Gray Local Investment Platform, Allan Gray Offshore Platform and Allan Gray Offshore Endowment.
Total investments below R50 000
If your total investment value is less than R50 000, the tiered fee will be replaced by a flat administration fee of 1% per annum (excl. VAT).
If you are invested in the Allan Gray Tax-Free Investment and the value of your tax-free investment account(s) is equal to or greater than the prevailing annual tax-free investment contribution limit, the flat administration fee of 1% (excl. VAT) will not apply. Instead, the administration fee for your tax-free investment account(s) will be calculated according to the fee tiers described above.
The new tiered administration fee will be charged separately and deducted from your investment account(s) through the sale of units.
The sale of units may trigger capital gains tax, where applicable.