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Allan Gray Balanced Fund

Fund Objective

The Fund aims to create long-term wealth for investors within the constraints governing retirement funds. It aims to outperform the average return of similar funds without assuming any more risk.

Suitable For

Seek steady long-term capital growth

Are comfortable with taking on some risk of market fluctuation and potential capital loss, but typically less than that of an equity fund

Wish to invest in a unit trust that complies with retirement fund investment limits

Typically have an investment horizon of more than three years

Benchmark

The Fund’s benchmark is the market value-weighted average return of funds in the South African – Multi Asset – High Equity category

Investment Policy

The Fund invests in a mix of shares, bonds, property, commodities and cash.

The Fund may buy foreign assets up to a maximum of 25% of the Fund (with an additional 5% for African ex-SA investments).

The Fund typically invests the bulk of its foreign allowance in a mix of funds managed by Orbis Investment Management Limited, our offshore investment partner.

The maximum net equity exposure of the Fund is 75% and we may use exchange-traded derivative contracts on stock market indices to reduce net equity exposure from time to time. The Fund is managed to comply with the investment limits governing retirement funds.

Returns are likely to be less volatile than those of an equity-only fund.

Coronation Balanced Plus Fund

Fund Objective

Balanced Plus aims to achieve the best possible investment growth for retirement savers

Suitable For

Investors who are saving for retirement, and:

• can stay invested for at least five years (preferably longer);

• have to choose a fund for their retirement annuity, provident fund, preservation fund or pension fund, and are looking for an investment that balances long-term growth with moderate levels of risk.

Benchmark

Composite (52.5% equity, 22.5% bonds, 20% international, 5% cash)

Investment Policy

As Balanced Plus aims to maximise long-term returns, it will typically have a strong bias towards shares, which offer the highest expected growth over the long run. The fund’s managers actively seek out attractively valued shares that may achieve strong returns over periods of five years and longer.

While shares usually offer the best investment return, this comes with the greatest risk of short-term losses. The fund’s investment in shares is therefore carefully balanced with other assets (including cash, bonds and property) to ensure that risk is moderated. Returns from these assets are not as volatile as shares, and will not always move in the same direction (up or down) at the same time, making the fund less risky than a pure equity fund.

Given the care taken to manage risk and to ensure that the best possible returns can be achieved from a range of diverse investments, it is unlikely that the Balanced Plus fund will lose money over the longer term. However, the fund may produce negative returns in extreme years, albeit at a lower level than a fund that is only invested in shares.

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