Offshore investing - Allan Gray
Offshore investing

Allan Gray-Orbis rand-denominated offshore unit trusts open; living annuity offshore limits removed

After a review of our offshore asset exposures, we are pleased to announce that we have reopened the Allan Gray-Orbis rand-denominated offshore unit trusts for basic unit trust investments, and removed the offshore asset limit for the Allan Gray Living Annuity.

You can now invest in the following rand-denominated offshore unit trusts:

Why does offshore capacity change from time to time?

The South Africa Reserve Bank has exchange control regulations in place that limit how much of their investments investors are allowed to hold offshore. There are different rules that apply to institutional investors and individuals.

Specifically, unit trust companies, like the Allan Gray Unit Trust Management Company (Allan Gray Unit Trust), can invest up to 40% of their retail assets under management in offshore investments. When you invest in the rand-denominated offshore unit trusts as part of your basic unit trust investments, you use Allan Gray Unit Trust’s offshore asset allowance instead of your own. This means that your ability to invest offshore via the rand-denominated offshore unit trusts is affected by the company’s available offshore capacity. Where offshore capacity is available, the rand-denominated offshore unit trusts will be open to investors but, at points where Allan Gray Unit Trust nears or reaches its allowable offshore limit, we will close them to remain compliant with the South African Reserve Bank’s exchange control regulations. These rand-denominated offshore unit trusts have been closed for new investments since April 2017, but as we have sufficient capacity available, we are now reopening them.

The same is true for life companies, which can also invest up to 40% of their retail assets under management offshore. While Allan Gray Life has sufficient offshore capacity, investors will be able to allocate freely offshore within a product like the Allan Gray Living Annuity. However, if Allan Gray Life nears or reaches its allowable offshore limit, we may apply limits to how much investors can invest offshore. We have had offshore limits in place for living annuity accounts since December 2017, which have now been removed.

We will continue to monitor our exposure

While we now have a meaningful amount of offshore capacity available for investors, it is difficult to predict how long it will last. This will depend on the rate of investment and the relative performance of offshore assets to local assets in rand terms moving forward. If any of the variables change, we may be required to review our limits.

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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.

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