Allan Gray - Orbis Global Optimal Fund of Funds

Lower risk exposure to offshore markets

The Allan Gray-Orbis Global Optimal Fund of Funds’ goal is to deliver long-term positive returns higher than foreign currency bank deposits, regardless of stock market conditions. We aim to beat the average of the benchmarks of the underlying unit trusts.

The Global Optimal Fund of Funds is suitable for you if:

  • You want to invest offshore in rands
  • You are looking for steady, long-term capital growth with better returns than foreign cash
  • You are comfortable with currency movements
  • You are ideally investing for at least two years (measuring performance in the unit trust’s currency)

Performance after fees with all distributions reinvested
as at  30 November 2018 (in rands)

Benchmark: The simple average of the benchmarks of the underlying unit trusts.

Annualised Returns

as at  30 November 2018

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.

Risk measures

as at  30 November 2018

 
Maximum drawdown (%)
Highest annual return (%)
Lowest annual return (%)
Fund
-18.9
39.6
-12.4
Benchmark
-26.6
35.6
-19.1

Investment strategy

To achieve the Allan Gray-Orbis Global Optimal Fund of Funds’ goal, we invest in a mix of unit trusts managed by our offshore partner, Orbis Investments. Orbis shares our investment philosophy, which is applied on a global scale. Orbis ignores market sentiment and buys assets its research process indicates are undervalued. Orbis sells them when they reach its estimates of fair value. A portion of the shares is hedged to reduce stock market risk.

The returns come partly from the underlying Orbis unit trusts’ relatively low exposure to stock markets, partly from Orbis’ selected share returns relative to those markets, and partly from foreign currency cash-equivalent returns. The Global Optimal Fund of Funds' currency exposure is actively managed, both within the underlying Orbis unit trusts and through the Orbis unit trusts we choose.

Asset allocation
as at  30 November 2018

Unit Trust Allocation

as at  30 November 2018

What are the costs?

All the Allan Gray - Orbis Global Optimal Fund of Fund’s expenses, including the investment management fee charged by Orbis in the underlying Orbis unit trusts, are deducted before performance figures are calculated. There are no separate or additional fees. The total investment charge is broken down below:

1.78%

Orbis investment management fee1

View fee breakdown
1.00%

Benchmark performance4

View summary
+
0.78%

Out- or underperformance5

+
0.06%

Other expenses2

+
0.00%

VAT

=
1.84%

Total expense ratio (TER)3

+
0.14%

Transaction costs

=
1.98%

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 2018 (annualised).

4 The fee charged for benchmark performance is charged within the underlying Orbis unit trusts for performance equal to the relevant unit trust’s benchmark. 

5 The portion of the Orbis investment management fee that is added or deducted for performance above or below the unit trust's benchmark performance.  

The investment management fee depends on performance

Orbis charges a fee within the underlying Orbis Optimal Fund of Funds, which depends on how well each underlying Orbis Fund performs against its benchmark. A portion of this fee is paid to Allan Gray for marketing and distribution and Allan Gray does not charge any additional fees.  

Underlying Orbis Optimal SA Funds
  • 1% is charged when the Orbis Fund's performance is the same as its benchmark’s performance (measured weekly).
  • If the Orbis Optimal SA Funds underperform Orbis continues to charge 1% until the underperformance has been fully recovered.
  • Once the underperformance has been fully recovered, for each additional percentage of outperformance, Orbis adds 0.2% to the fee.

Min: 0%  -  Max: uncapped excluding VAT

The fees of the Obris unit trusts are described in more detail on the Orbis factsheets.

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 annual management fees charged by both Allan Gray and Orbis (if applicable) are included in the Total investment charge. The total expense ratio (TER) is the annualised percentage of the Fund’s average assets under management that has been used to pay the Fund’s actual expenses over the past three years. The TER includes the annual management fees that have been charged (both the fee at benchmark and any performance component charged), VAT and other expenses like audit and trustee fees. Transaction costs (including brokerage, Securities Transfer Tax [STT], STRATE and Investor Protection Levy and VAT thereon) are shown separately. Transaction costs are a necessary cost in administering the financial product and impacts financial product returns. They should not be considered in isolation as returns may be impacted by many other factors over time including market returns, the type of financial product, the investment decisions of the investment manager and the TER. Since Fund returns are quoted after the deduction of these expenses, the TER and transaction costs should not be deducted again from published returns. As unit trust expenses vary, the current TER cannot be used as an indication of future TERs. A higher TER does not necessarily imply a poor return, nor does a low TER imply a good return. Instead, when investing, the investment objective of the Fund should be aligned with the investor’s objective and compared against the performance of the Fund. The TER and other funds’ TERs should then be used to evaluate whether the Fund performance offers value for money. The sum of the TER and transaction costs is shown as the total investment charge.

You can obtain additional information about your proposed investment from Allan Gray free of charge. Simply email info@allangray.co.za or call our Client Service Centre on 0860 000 654.

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