Allan Gray Bond Fund
Earn above-cash returns from the bond market
The Bond Fund’s goal is to deliver returns that exceed inflation and cash over the long term, without taking on undue risk.
The Bond Fund is suitable for you if:
- You want to include bonds in your investment portfolio
- You accept a higher risk of capital loss than in money market or cash investments
- You are ideally investing for at least three years
Performance after fees with all distributions reinvested
as at 31 May 2021 (in rands)
Benchmark: FTSE/JSE All Bond Index.
as at 31 May 2021
This is a way of reporting the return earned over a period as a percentage per year. Although the figure stated implies that the same percentage return was delivered every year, the actual return in each year may have been more or less than the reported figure, depending on the unit trust’s volatility. Annualised performance reporting simplifies comparison across different time periods and across different types of investments.
as at 31 May 2021
To achieve the Bond Fund’s goal, we invest in South African interest-bearing securities, including national government, parastatal, municipal and corporate bonds, as well as money market instruments and cash. We try to balance credit risk, duration risk and liquidity risk when selecting investments. We target total returns for investors rather than trying to mirror the returns of the FTSE/JSE All Bond Index. When we cannot find value in the bond markets, our portfolio will be weighted towards cash to get better returns.
as at 31 May 2021
as at 31 May 2021
What are the costs?
All the Bond Fund’s expenses, including the investment management fee, are deducted before performance figures are calculated. There are no separate or additional costs. The total investment charge is broken down below:
Investment management fee1View fee breakdown
Benchmark performance4View summary
Out- or underperformance5
Total expense ratio (TER)3
Total investment charge
1 Investment management fees are charged for the investment manager’s investment research and decision-making. On 1 December 2020, the Bond Fund’s investment management fee started transitioning to a fixed fee of 0.5% per year excluding VAT. See the investment management fee section below for more information.
2 This includes audit fees, taxes and other administration costs.
3 This is a measure of the actual costs that have been deducted from the unit trust over the past three years to 31 March 2021 (annualised).
4 The investment management fee charged for benchmark performance.
5 The portion of the investment management fee that is charged for performance above or below the benchmark performance.
The investment management fee
A fixed fee of 0.5% per year excluding VAT.
From 1 December 2020 to 30 November 2021, we will calculate both the above fixed fee and the previous performance-based fee each day and charge whichever is lower on the day. From 1 December 2021, only the above fixed fee will apply.
The previous performance-based fee rate is calculated by comparing the Bond Fund’s total performance over the previous year to that of the benchmark, adjusted for Bond Fund expenses and cash flows. The minimum fee is 0.25% per year excluding VAT and, for each percentage of performance above the benchmark, the fee is increased by 0.25%, up to a maximum fee of 0.75% per year excluding VAT.
Note: There may be slight discrepancies in the totals due to rounding.
Important information for investors
Collective Investment Schemes in Securities (unit trusts) are generally medium- to long-term investments. The value of units may go down as well as up and past performance is not necessarily a guide to future performance. The Management Company does not provide any guarantee regarding the capital or the performance of its unit trusts. Unit trusts may be closed to new investments at any time in order for them to be managed according to their mandates. Unit trusts are traded at ruling prices and can engage in borrowing and scrip lending.
Performance figures are provided by Allan Gray and are for lump sum investments with income distributions reinvested. Actual investor performance may differ as a result of the investment date, the date of reinvestment and dividend withholding tax. Movements in exchange rates may also be the cause of the value of underlying international investments going up or down. Unit trust prices are calculated on a net asset value basis, which is the total market value of all assets in the unit trust including any income accruals and less any permissible deductions from the unit trust, divided by the number of units in issue. Forward pricing is used and fund valuations take place at approximately 16:00 each business day. Purchase and redemption requests must be received by 14:00 each business day to receive that day’s price. Unit trust prices are available daily on our prices page. Permissible deductions may include management fees, brokerage, Securities Transfer Tax (STT), auditor’s fees, bank charges and trustee fees. A schedule of fees, charges and maximum commissions is available on request from the Management Company.
The Allan Gray Bond Fund yield is current, calculated as at month-end.
The total expense ratio (TER) is the percentage of the unit trust's average assets under management that has been used to pay the unit trust's operating expenses over the past year. The TER includes the annual management fees that have been charged (both the fee at benchmark and any performance component charged), trading costs (including brokerage, STT, STRATE and FSB Investor Protection Levy), VAT and other expenses. Since unit trust expenses vary, the current TER cannot be used as an indication of future TERs. The unit trust’s performance figures are quoted after the deduction of costs incurred within the unit trust so the TER is not a new cost. A higher TER ratio does not necessarily imply a poor return, nor does a low TER imply a good return. Instead, when investing, the investment objective of the unit trust should be aligned with the investor’s objective and compared against the performance of the unit trust. TERs should then be used to evaluate whether the unit trust performance offers value for money.
While this Fund has been approved for marketing to the public in Botswana, by the Regulatory Authority of Botswana, the Fund is not supervised or licensed in Botswana. It is a registered collective investment scheme portfolio, registered, approved and regulated by the South African Financial Services Board. The Facilities Agent for the Fund in Botswana is Allan Gray (Botswana) (Proprietary) Limited at Plot 545354, 2nd Floor, Building 2, Central Square, New CBD, Gaborone, Botswana where investors can obtain a trust deed and financial reports.
In accordance with section 11(i) of the Botswana Income Tax act (Chapter 52; 01), an amount accrued to any person shall be deemed to have accrued from a source situated in Botswana where it has accrued to such person in respect of any investment made outside Botswana by a resident of Botswana; provided that section 11 (i) shall not apply to foreign investment income of non-citizens resident in Botswana. Botswana residents who have invested in the shares of the Fund are therefore required to declare income earned from this Fund when preparing their annual tax returns.
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