Allan Gray Tax-Free Balanced Fund

Our flagship long-term unit trust for tax-free investment accounts

The goal of the Tax-Free Balanced Fund is to create steady, long-term wealth for investors by balancing income generation, capital growth and risk of loss using a mixed selection of assets. We aim to beat the average performance of similar unit trusts without taking any more risk.

The Tax-Free Balanced Fund is suitable for you if:

  • You are investing in the Allan Gray Tax-Free Investment Account
  • You are looking for steady, long-term capital growth
  • You are ideally investing for at least three years
  • You are comfortable with taking on some risk of market fluctuation and potential capital loss

ANNUALISED RETURNS

as at  30 November 2018

The Tax-Free Balanced Fund history is less than two years, which is a very short period to assess the performance of a unit trust that aims to deliver long term return. You should expect to see significant fluctuations in the short to medium term that average out over time.

Investment strategy

The Tax-Free Balanced Fund is managed in broadly the same way as the Allan Gray Balanced Fund and we believe it is useful to look at the history of the Allan Gray Balanced Fund when making investment decisions about this unit trust. The Tax-Free Balanced Fund was created specifically for use in tax-free accounts and can only be accessed through these products.

The track record of the Allan Gray Balanced Fund gives investors a view of the performance and risk measures of the Allan Gray Balanced Strategy over the long term.

To achieve the goal of our Balanced Strategy, we invest in shares of companies, commodities, bonds issued by companies and the government and cash. The Tax-Free Balanced Fund can invest a maximum of 30% offshore, with an additional 10% allowed for investments in Africa outside of South Africa.

The offshore portion is typically invested into a mix of funds managed by Orbis Investment Management Limited, our offshore investment partner.

We determine the mix of assets in the Balanced Strategy based on where we are finding the best value. However, because the Balanced Strategy is managed to comply with the retirement fund investment limits, the maximum exposure to equities is 75%.

Net equity exposure may be reduced from time to time using exchange-traded derivative contracts on stock market indices.

Asset allocation
as at  30 November 2018

*The offshore allocation is made up of 28.6% foreign investments outside of Africa and 2.7% in Africa outside of South Africa.

Month-End Net Equity Exposure

(Max 75%)

What are the costs?*

All the Tax-Free Balanced 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:

1.03%

Investment management fee1

1.03%

Benchmark performance

+
0.00%

Outperformance

+
0.01%

Other expenses2

+
0.11%

VAT

=
1.15%

Total expense ratio (TER)3

+
0.14%

Transaction costs

=
1.29%

Total investment charge

* The TER and Transaction Costs cannot currently be determined accurately because of the short lifespan of the Fund. Calculations are based on actual data, and best estimates where actual data is not available or provides a poor estimate of potential future costs.

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 30 September 2018 (annualised).

The investment management fee

The fee we charge is fixed at 1.25% 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.

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. 

The financial services, products or investments referred to on this website are not available to persons resident in jurisdictions where their availability or distribution would contravene local laws or regulations and the information on this website is not intended for use by these persons. This website is for information only and does not in any way constitute a solicitation or offer by Allan Gray Proprietary Limited or any of its associates or subsidiaries (collectively “Allan Gray”) to buy or sell any financial instruments or to provide any investment advice or service.

By selecting one of the countries below I confirm that I have read and understood the above and that:

(a) I am not a South African citizen; or 
(b) I do not reside in the Republic of South Africa; or 
(c) I am not otherwise a person to whom the communication of the information contained in this website is prohibited by the laws of my home jurisdiction; and 
(d) I am not acting for the benefit of any such persons mentioned in (a),(b) and (c) and 
(e) I confirm that any investment with Allan Gray is based on my own initiative and not due to any offer or solicitation by Allan Gray.