Allan Gray Stable Fund
Lower fluctuation for short- to medium-term access
The Stable Fund’s goal is to offer investment stability and preserve investor’s capital over any two-year period. The unit trust aims to deliver return above inflation over the long term and is measured against the daily interest rate supplied by FirstRand Bank Limited plus 2%.
The Stable Fund is suitable for you if:
- You are risk averse and want to prioritise protecting your capital
- You are ideally investing for at least two years
- You want to achieve returns better than inflation, but are comfortable with lower potential return over time than you might earn in a unit trust that takes on more risk
- You are comfortable with some market fluctuation within a two-year period
- You want a unit trust that complies with legal investment limits for retirement funds
Performance after fees with all distributions reinvested
as at 31 May 2021 (In rands)
Benchmark: The daily interest rate as supplied by First Rand Bank Limited plus 2%.
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 Stable Fund’s goal we invest in a mix of assets, including money market instruments, shares, bonds, property and commodities. The Stable Fund can invest a maximum of 30% offshore, with an additional 10% allowed for investments in Africa outside of South Africa. The offshore portion of the unit trust is typically invested into a mix of unit trusts managed by Orbis Investments, our offshore investment partner.
The Stable Fund’s mix of assets at any given time is a direct result of its objectives: assets are selected based on where we are finding the best value relative to cash. For example, if we are able to find many individual SA-listed shares attractive relative to cash, taking into account its focus on capital preservation, the Stable Fund will have a higher exposure to shares, eventually up to its maximum net equity exposure of 40%. On the flipside, the Stable Fund can have zero exposure to shares if we are not able to find any shares to buy that we feel are attractive relative to cash. This unit trust is managed to comply with the retirement fund investment limits.
The Stable Fund may reduce net equity exposure from time to time using exchange-traded derivative contracts on stock market indices.
as at 31 May 2021
*The offshore allocation is made up of 29.0% foreign investments outside of Africa and 5.9% in Africa outside of South Africa.
Month-End Net Equity
What are the costs?
All the Stable 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. This figure includes the Allan Gray investment management fee, which is charged only on the portion of the unit trust invested locally, as well as the fees charged by Orbis on the portion invested offshore.
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 fee charged for benchmark performance. This figure includes the Allan Gray investment management fee at benchmark, which is charged only on the portion of the unit trust invested locally, as well as the fees charged within the underlying Orbis unit trusts for performance equal to the relevant unit trust’s benchmark.
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 Stable Fund performs against its benchmark.
Min: 0.5% - Max: 1.5% excluding VAT
- 1% is charged when the unit trust performance is the same as its benchmark’s performance.
- If the Stable Fund beats or fails to achieve benchmark performance (measured over two years), for each percentage difference, we add or deduct 0.1% to the fee.
- If the Stable Fund's return over two years is equal to or less than 0%, we will not charge a 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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