Allan Gray preservation fund review 2022

You may want to transfer savings from your employer’s retirement fund or pension fund at some point, and the Allan Gray preservation fund is one of the best ways to do it. The Allan Gray Preservation Fund offers many benefits that can be taken advantage of in retirement.

The retirement fund or other type of fund transferred to the Allan Gray preservation fund can be saved in either the pension or provident preservation funds. If funds are not deposited into one of the two preservation accounts listed above, they can be saved into the Allan Gray retirement annuity fund.

The account holders of the Allan Gray preservation fund are eligible for tax benefits. Account-holders can save money on taxes on both the money they put into the account and the profits they make on the money they invest. Since investment returns are not taxed, there will be no capital gains or dividend taxes.

Account-holders can invest their money in a variety of Allan Gray unit trusts through the Allan Gray Preservation Fund. These unit trusts invest globally in a variety of firms and instruments. It’s critical to understand how unit trusts work and what they invest in.

In the long run, the Allan Gray Preservation Fund can benefit you. Continue reading about the Allan Gray Preservation Fund in greater depth below for more information.

Allan Gray preservation fund summary

Those who are 18 years old or older can apply for the Allan Gray preservation fund. A minimum lump sum commitment of R50,000.00 is required for the preservation fund. A lapsed provident fund or a pension plan can be used to make an investment. The money can subsequently be put into the Allan Gray provident preservation fund or the Allan Gray pension preservation fund.

The money you save can then be put into one of four Allan Gray unit trusts. Allan Gray Stable Fund, Allan Gray Balanced Fund, Allan Gray Equity Fund and the Allan Gray Money Market Fund are among the unit trusts. Investment in these unit trusts can be apportioned according to the investor’s preferences.

According to Regulation 28 of the Pension Funds Act, an investment in the Allan Gray preservation fund provides a level of equity protection. The regulation imposes a restriction on the maximum exposure that different assets in the retirement fund can have. According to regulations, unit trusts cannot hold no more than 75% of their assets in equities, 25% in real estate, and 45 % in overseas assets.

Due to regulatory 28, it may be required to invest in multiple unit trusts. The funds are invested in any of the unit trusts that do not provide capital guarantees. As a result, when unit trusts perform poorly, money invested in them may shrink from time to time.

There are no monthly or annual payments allowed to the preservation fund. Only a single lump sum contribution that is accessible at retirement can be made. However, you can only withdraw one-third of your investment (capital and interest). The remaining funds must be put into a retirement account or a living annuity.

How the Allan Gray preservation fund work 

On the Allan Gray website, you can apply for the Allan Gray preservation fund entirely online. The product simply requires a one-time lump sum contribution. Those under the age of 55 are eligible to apply for the product. This product is not available to minors (those under the age of 18).

When submitting an application, one must decide how to invest the lump sum that has been deposited into the account. You can invest in one or more of the Allan Gray unit trusts. Following a successful application, the contribution will be allocated to the unit trusts specified by the investor.

Invested funds cannot be withdrawn until the investor reaches the age of 55. However, there is a specific circumstance in which a withdrawal can be made before reaching retirement age. Taxation will apply to the withdrawal.

The Allan Gray preservation fund allows one-third of the investment amount to be withdrawn at retirement. To obtain a retirement income, the remaining two-thirds of the capital will have to be invested. This transaction is not subject to taxation.

Advantages of the Allan Gray preservation fund

  • There is the possibility of earning interest on the underlying investments.
  • The minimum lump sum payment is set at R50,000.00, which is a reasonable amount to contribute to a preservation fund.
  • Contributions to the Allan Gray Preservation Fund come with tax benefits.
  • Capital gains and dividends are not taxed on investment returns.
  • Before reaching the age of 55, you can make one withdrawal from the Allan Gray preservation fund.
  • There are several unit trusts to choose from.
  • Regulation 28 of the Pension Funds Act restricts capital exposure.
  • There are no costs associated with investing in the Allan Gray unit trusts.

Disadvantages of the Allan Gray preservation fund 

  • It is possible to lose the money invested in the underlying investment vehicles.
  • At retirement, investors are required to reinvest two-thirds of their funds. However, there is a particular level at which a person can withdraw their entire investment upon retirement.


One investment vehicle that may be relied on to save and invest for retirement is the Allan Gray Preservation Fund. The product not only pays a lump sum upon retirement but also ensures that some of your earnings are kept and re-invested to generate a living income during retirement. Working with a financial advisor before applying for the product is recommended in order to determine which form of a unit trust is suitable for you and to establish the amount of retirement income you desire.