From R10,000 to R937,000 in 26 years

Allan Gray’s Equity Fund has produced excellent returns over the last 26 years, outperforming the JSE Top 40 and the S&P 500.

The fund invests primarily in shares listed on the Johannesburg Stock Exchange (JSE) and a maximum of 45% invested offshore.

It invests most of its foreign allowance in equity funds managed by Orbis Investment, Allan Gray’s offshore investment partner.

The fund is typically fully invested in shares, so returns are likely to be volatile, especially over the short- and medium-term.

Allan Gray explains that the fund aims to outperform the average return of South African general equity funds over the long term without taking on a greater risk of loss.

“We seek to buy shares offering the best relative value while maintaining a diversified portfolio,” Allan Gray explained.

“We invest in a selection of shares across all sectors of the stock market, and across the range of large, mid and smaller cap shares.”

The top 10 holdings in the Allan Gray Equity Fund include most of the big names, including Naspers, Prosus, British American Tobacco, and AB InBev.

Its biggest holdings are all JSE-listed shares. However, they are all companies with a strong international presence.

Other top holdings in its portfolio are Standard Bank, Woolworths, Nedbank, Glencore, Remgro, and Mondi.

The Walt Disney Company is the only share in the fund’s top 10 holdings that is not listed on the JSE, comprising 2.1% of the fund.

Financials make up 24.5% of the fund, followed by consumer staples at 17.7%, consumer discretionary at 14.6%, and basic materials at 14.2%.

The fund size is R46.4 billion and is managed by Duncan Artus, Jithen Pillay, Rory Kutisker-Jacobson, and Tim Acker.

Allan Gray Equity Fund performance

The Allan Gray Equity Fund has performed exceptionally well since it was launched on 1 October 1998.

It has produced an annualised return of 19.1%, significantly outperforming similar South African equity funds.

In other words, an R10,000 investment in the Allan Gray Equity Fund in October 1998 would now be worth R937,000.

What is particularly impressive is that the Allan Gray Equity Fund has significantly outperformed the S&P 500, JSE Top 40, and JSE All Share since its inception.

The fund’s 19.1% annualised return of 19.1% net of fees is much higher than the S&P 500’s 11.44%, the JSE Top 40 11.26%, and the JSE All Share’s 11.21%.