Allan Gray Stable Fund is a unit trust that currently sells over 587 million units at a price of R35.00 per unit. The fund manages more than R45 billion in assets. Andrew Lapping, Leonard Kruger, and Mark Dunley-Owen administer the Allan Gray Stable Fund. The Fund’s objective is to maintain a high level of capital stability and to minimize risk of loss over a two-year period while generating long-term returns that outperform bank deposits.
The Fund’s benchmark is First Rand Bank Limited’s daily interest rate on fixed deposits (FNB fixed deposit nominal interest rate) plus 2%. Since the fund’s inception in 2000, the Allan Gray Stable Fund has outperformed the benchmark. The Fund invests in a diversified portfolio of assets, including money market instruments, stocks, bonds, real estate, and commodities. Today, the fund has invested R45.00 billion.
The Allan Gray Stable Fund may invest up to 30% of its assets offshore. Additionally, the fund may invest an extra 10% in Africa other than South Africa, bringing the fund’s total overseas interests to up to 40%. The Fund’s offshore assets are invested in a portfolio of unit trusts managed by Orbis Investments. Allan Gray Ltd’s offshore investment partner is Orbis investing.
Allan Gray’s investment philosophy, as a firm, has been compared to that of Warren Buffet. This is because Allan Gray, the company’s founder, considered investments as a form of long-term capital management. The primary purpose of the Fund is to generate favorable returns over the medium or short term. A viable and effective approach is required to accomplish this.
The Allan Gray Stable Fund approach entails investing in stocks, bonds, and other asset classes for an extended period of time in order to generate positive returns. In a nutshell, the fund does not engage in speculation.
The Fund is broken into three investment points which include:
The breakdown of investing suggests that the Stable Fund is South Africa centric. Today local investments take 63% of the fund while 37% is in offshore investments.
With over R45 billion in assets under management, the Stable Fund will work diligently to generate annual returns in excess of 10%. This is due to the fund’s size. However, when it comes to investing, size does important. For example, a fund with billions of dollars must invest in well-established firms, whereas a fund with tens of millions must invest in high-growth small, medium, and large businesses.
The Allan Gray Stable Fund, like the Allan Gray Stable Fund, invests mostly in well-established enterprises. The Stable Fund invests in companies such as Nespars, British tobacco, and Standard Bank. Investments in established businesses typically see stable growth and give security. On the other hand, investments in start-ups might result in exponential development or, conversely, can result in the company’s demise within a few years.
The Stable Fund seeks to achieve favorable growth and returns while minimizing capital risk. Bear in mind that investing in the Stable Fund exposes you to the risk of losing money. There are no guarantees that market conditions will always favor the fund. However, when used as an index, the fund can weather some of the harshest economic downturns, like the 2008 financial crisis and, more recently, the Covid-19 pandemic.
Below is a table that shows the local and offshore investments from the Stable Fund.
|Local Investments (Portfolio %)
|Offshore Investments (Portfolio %)
|Money Market and Bank deposits
The table below depicts the top 10 companies that the Stable Fund invested in and the percentage of the portfolio.
|British American Tobacco
|SDPR Gold Trust
|Taiwan Semiconductor MLG
Allan Gray Stable Fund offers investment opportunities for everyone. Regardless of your income, you can invest in the Stable Fund. Allan Gray offers 7 accounts that you need to choose from when investing in the Allan Gray Stable Fund.
The seven accounts include:
The Allan Gray Stable Fund offers great opportunities to grow money for different purposes. Investment in the fund can yield you favourable returns. Allan Gray has made it easy for different investors to invest in the Stable Fund. Those with retirement funds, planning for retirement, or want to take advantage of the fund’s taxfree account the Stable Fund takes care of them.