Allan Gray Optimal Fund
Positive long-term returns unrelated to stock market returns
The Optimal Fund’s goal is to deliver long-term positive returns, better than the money market, regardless of stock market conditions. The unit trust’s performance is measured against the daily interest rate supplied by FirstRand Bank Limited.
The Optimal Fund is suitable for you if:
- You want returns that are unrelated to returns from shares or bonds
- You are ideally investing for at least three years
Performance after fees with all distributions reinvested
as at 31 October 2021 (In rands)
Benchmark: The daily interest rate as supplied by FirstRand Bank Limited.
as at 31 October 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 October 2021
To achieve the Optimal Fund’s goal, we invest in shares that our thorough research process indicates are undervalued and we seek to reduce stock market risk via a process called ‘hedging’. This means that we sell exchange-traded equity index derivatives against the shares in the unit trust. This enables us to deliver steady returns under different market conditions by earning a return either from our share selection, or from the derivative contracts. The unit trust's return therefore depends on the performance of the selected shares relative to the stock market index, as well as on the level of short-term interest rates. The choice of shares in the Optimal Fund may be different to other Allan Gray unit trusts. The Optimal Fund's maximum net equity exposure is 20%.
as at 31 October 2021
Month - End Net Equity Exposure
What are the costs?
All the Optimal 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.
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 30 September 2021 (annualised).
4 The 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 depends on performance
The fee we charge depends on how well the Optimal Fund performs against its benchmark.
Min: 1% - Max: uncapped excluding VAT
- 1% is charged when the unit trust performance is the same as its benchmark’s performance (measured daily).
- If the Optimal Fund underperforms we will continue to charge 1% until the underperformance has been fully recovered.
- Once the unit trust's underperformance has been fully recovered, for each additional percentage outperformance, we add 0.2% to the fee.
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 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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