Top South African asset manager’s local fund failed to beat the market for 11 years

The Allan Gray SA Equity Fund has failed to beat its benchmark, the JSE All Share Index, since its launch on 13 March 2015.

The Allan Gray SA Equity Fund invests in South African shares with the potential for higher returns over time.

The fund invests in a selection of shares across all sectors of the JSE and across the range of large-, mid-, and small-cap shares.

The fund is managed by Duncan Artus, Pieter Koornhof, Rory Kutisker-Jacobson, Siphesihle Zwane, and Tim Acker.

Their task is to outperform the South African equity market over the long term, without taking on any more risk.

Simply put, the fund managers must pick companies to invest in which will perform better than the average share on the Johannesburg Stock Exchange (JSE).

“We seek to buy shares offering the best relative value while maintaining a diversified portfolio,” the fund managers said.

“We thoroughly research companies to assess their intrinsic value from a long-term perspective.”

They explained that this long-term view enables them to buy shares which are shunned by the stock market because of their unexciting or poor short-term prospects.

Although this sounds good on paper and aligns with the principles advocated by superinvestor Warren Buffett, it is not easy to execute effectively.

Since the Allan Gray SA Equity Fund was launched 11 years ago, it has significantly underperformed the market.

It has also underperformed its benchmark over the last 10, 5, 3, and 2 years, which are standard metrics for tracking a fund’s performance.

What this means is that investors would have been better off buying an Exchange-Traded Fund (ETF), like the Satrix Top 40, than investing in this Allan Gray fund.

The table below shows the Allan Gray SA Equity Fund’s performance against its benchmark, the JSE All Share Index.

Time Frame	Allan Gray Fund	Benchmark
Since inception (13 March 2015)	8.6%	10.3%
Latest 10 years	8.6%	11.5%
Latest 5 years	13.3%	15.3%
Latest 3 years	15.6%	18.7%
Latest 2 years	13.3%	16.1%
Latest 1 year	9.8%	4.6%

Piet Viljoen’s warning about large fund managers

Piet Viljoen, who previously served as a portfolio manager at Allan Gray Investment Counsel, urged people to be aware of the performance of large funds.

Viljoen, who is now part of Merchant West Investments’ leadership team, shared his views on large funds during the 2026 Biznews Conference.

He said that a large part of the financial services industry relies on unnecessary jargon, complex product design, and artificial benchmarks to bamboozle investors.

Viljoen likened this complexity to a Rube Goldberg machine, which is intentionally designed to perform a simple task in an overcomplicated way.

“Complexity leads to confusion, confusion leads to the need for advice, and this leads to revenue for the investment management industry,” he said.

He argued that the investment management industry worldwide achieves its goals in a few ways.

• The complexity in the language that they use, which obscures straightforward facts and puts investment professionals above their clients.

• Product complexity, which makes investors believe that investing their money is much harder than it actually is.

• Measurement complexity, which diverts attention from what really matters: whether purchasing power has increased to beat inflation.

• Organisational complexity, which means there are so many fees which the investor must pay that they experience reduced returns.

• Forecasting, which is superfluous but creates uncertainty which, in turn, drives people to experts.

Viljoen encourages investors to focus on core principles, such as understanding cash flows, management quality, and sensible valuation.

This, he said, is a much better approach to investing than being distracted by economic forecasting or complex active management strategies.