Allan Gray lists actively managed ETFs, expands routes to invest offshore
Allan Gray has made its debut on the Johannesburg Stock Exchange (JSE) by listing two actively managed exchange-traded funds (AMETFs), giving South African investors a convenient way to gain offshore exposure.
The two funds – the Allan Gray - Orbis Global Equity Feeder AMETF and the Allan Gray - Orbis Global Balanced Feeder AMETF – began trading on 11 December 2025. They will also be available via Allan Gray in 2026.
Shaun Duddy, head of Retail Product Development at Allan Gray, says that the move reflects Allan Gray’s commitment to giving investors more choice in accessing global opportunities.
“Accessibility is an important part of our value proposition to clients,” says Duddy. “We are therefore pleased to offer investors yet another way to gain offshore exposure, while giving them the opportunity to benefit from the expertise of our offshore partner, Orbis, who shares our investment philosophy and approach.”
The listings create a third avenue for investors to access the Allan Gray - Orbis rand-denominated offshore feeder strategies. Investors also have the option of investing in the unlisted co-named versions of the feeder funds via the Allan Gray Local Investment Platform, and the original unlisted Allan Gray -Orbis feeder funds via the Allan Gray life and retirement fund products.
The Allan Gray - Orbis Global Equity Feeder AMETF is designed for investors seeking long-term capital growth, with a minimum investment horizon of five years, through an actively managed portfolio of global shares. The Fund invests in the Orbis Global Equity Fund (apart from a small percentage of assets in liquid form), which follows a value-driven, "bottom-up" research approach. It aims to outperform its benchmark – the MSCI World Index – over time, without taking on additional risk.
The Allan Gray - Orbis Global Balanced Feeder AMETF aims to deliver long-term real returns through a multi-asset portfolio and is ideally suited to investors with a minimum investment horizon of between three and five years. It invests in the Orbis SICAV Global Balanced Fund (apart from a small percentage of assets in liquid form), which uses the same value-driven, “bottom-up” research approach as the Orbis Global Equity Fund. The portfolio flexibly allocates between equities, fixed income and commodity-linked instruments, with typical net equity exposure ranging between 40% and 75%. The Fund aims to outperform its benchmark, comprising 60% the MSCI World Index (with net dividends reinvested) and 40% the J.P. Morgan Global Government Bond Index, balancing investment returns and risk of loss.
“The Orbis Global Equity and Orbis SICAV Global Balanced funds are at the core of Orbis’ focused fund range. These funds offer differentiated global positioning that aims to deliver superior risk-adjusted returns over the long term,” Duddy notes, adding that investors who want to invest directly in these funds in foreign currency can also do so via the Allan Gray Offshore Investment Platform and Allan Gray Offshore Endowment.
The Orbis funds charge a performance-based fee which has a unique structure, aimed at creating alignment between Orbis and clients invested in the funds. An often unappreciated aspect of the structure is that performance fees can be refunded during times of underperformance. Performance has been strong, which is currently reflected in the fee.
“Performance fee structures, when well designed, reward managers for doing well, and penalise them for delivering poor outcomes. The current fees for the two ETFs reflect the very strong performance achieved for investors over the past 12 months compared to index-based, passive alternatives,” says Duddy.
Investors may be wondering if they will pay this fee for the next 12 months. “The short answer is only if Orbis outperforms at the same level. When the fund outperforms the benchmark, the fee is not immediately paid over to the manager; it is held in a reserve which is subsequently refunded to the fund’s net asset value if the fund subsequently underperforms. This ensures that performance fees are only paid if this performance is sustained and helps ensure that fees charged reflect the value added since inception,” Duddy explains.
Investors may ask how ETFs differ from unit trusts, since they are similar in many respects. “The main distinction is that AMETFs trade on an exchange, while unit trusts are accessed via investment managers or platforms,” says Duddy
He goes on to explain that some of the advantages of ETFs, including AMETFs, are that they can be traded intraday on the JSE and that they are not subject to South Africa’s exchange control limits. This means South African individuals, companies, trusts and partnerships, as well as non-residents, can invest in the newly listed Allan Gray - Orbis AMETFs without restriction, aiding their diversification ambitions.
“South Africa represents less than 0.5% of global equity markets. Diversifying offshore therefore remains an important part of any well-constructed investment strategy. Our AMETFs give investors an additional avenue to fulfil their offshore investment goals,” Duddy concludes.
