Allan Gray Equity Fund is a unit trust with 52 million units each valued at R350.00. The Equity Fund portfolio has investments of R32 billion as of 2020 with investments in the technology industry, oil and gas, telecommunications, finance, healthcare, and utilities.
The Equity Fund aims at creating long term wealth for its investors. With purchases of stocks, bonds, property, and commodities, the fund holds these over a period of 1 year to create value for investors.
The Equity Fund is one of the most successful equity investment unit trust in the world. Allan Gray Equity Fund has shown incredible growth since its inception in 1998.
Over the past 5 years, the fund has recorded a 3.5% annual increase. This give is favourable considering the average of 1.5% that was made by unit trusts in the South-African-Equity-General category.
Allan Gray’s Equity Fund’s objective is to create long term wealth for investors. The objective is straightforward and easy to understand. The fund is definitely not to yield immediate returns.
Instead, through the Equity Fund, the fund managers invest in shares that have potential for higher returns over time. The Equity Fund aims to beat the average performance of similar unit trusts without taking more risks.
You need to understand that unit trust returns fluctuate due to market inefficiencies. Short to medium term results show fluctuations that can even go on a negative.
For example, for the year 2019, the fund lost 2.6% but looking at a 10-year profit or loss the fund increased by more than 10%. This fund is only suitable for long term investments of 5years or more.
To achieve a goal you need to have a strategy in place and so does the Allan Gray Equity Fund. According to the Allan Gray website the managers use research to identify and buy shares in companies that managers believe are undervalued by the market.
The Fund invests in shares that are on the Johannesburg Stock Exchange. The Equity Fund has thresholds for different regions of investments. Investments of the fund are split in the following:
Allan Gray Equity Fund’s investment is mostly in shares. The fund uses a benchmark to track progress on profit or loss. It uses the South African-Equity-General Fund average as its benchmark.
The Fund invests in a
selection of shares across all sectors of the stock market, and across the range of large, mid, and smaller-cap shares.
The Equity Fund is suitable for certain type of investors. We can safely conclude that the Equity Fund is suitable for:
From the above list, you can see that the fund is volatile and can make losses. There are no guarantees that you will make money within your investment’s lifetime. But history has taught us that the Equity Fund always bounce back from difficulties to yield favourable results.
So when choosing the Equity Fund as your investment option from Allan Gray, think long term. Long term meaning at least five years but the longer you invest the better will your returns on investment be.
The type of account that you choose with Allan Gray will determine the type of investor you are. Different accounts from Allan Gray offer different tax opportunities that you can exploit.
Allan Gray offers seven accounts that you can choose for your investment in the Equity Fund. The account that you are going to choose will determine the minimum amount you can invest.
The accounts that you can choose from includes:
The table below shows all the companies that the Equity Fund has a shareholding in. However, only the top 10 fund investment are shown.
|British American Tobacco||7. 1|
|Standard Bank||3. 8|
|Old Mutual||1. 9|
Investment in the Allan Gray Equity Fund can yield favourable results over time. With such an investment you can plan for retirement or purchase an asset that you desperately need.
The fund is not foolproof, it has its ups and downs but history has proven that the fund is stable over time. When investing, the Allan Gray Equity Fund is an investment opportunity that you need to consider.