Proposed changes to the Allan Gray Equity Fund

Allan Gray’s head of product development, Richard Carter

Allan Gray is in the process of balloting investors in the Allan Gray Equity Fund regarding proposed changes to the Fund’s investment mandate, benchmark and fees. The ballots will be sent out this week to both institutional and retail investors in the Fund. The proposed changes are listed below and some additional detail is provided in the attached summary:

1. Change the Fund’s investment mandate to allow it to invest offshore in line with the limits of the South African-Equity-General sector.  This would enable the Fund to invest up to 25% of its assets in global equities and a further 5% in African equities. 
2. Change the Fund’s benchmark to the market value-weighted average return of the South African-Equity-General sector, excluding Allan Gray Funds.
3. Change the Fund’s investment management fee.
4. Change the Fund’s investment mandate to allow the use of financial instruments (including listed derivative instruments).

The aim of the proposed changes it to enable Allan Gray to increase the Fund’s long-term returns and reduce risk through wider investment opportunities. The changes also aim to lower fees and better align the fees paid with the performance that investors experience.  

If the ballot is successful, Allan Gray intends to implement the changes from 1 March 2015. 

A video clip explaining the changes, featuring Allan Gray’s head of product development, Richard Carter can be viewed here - (http://www.allangray.co.za/roadshow/video.aspx?id=147).