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Allan Gray Optimal Fund

Code: AGOF

Overview of Allan Gray Optimal Fund

The Fund invests mainly in selected shares and it uses exchange-traded derivative contracts on stock market indices to substantially reduce its net equity exposure to within a range of 0-20%. As a result, the Fund’s return depends on the level of short-term interest rates (implicit in the pricing of the sold futures contracts) and the performance of the Fund’s selected shares relative to the stock market index. The Fund’s return is therefore unlikely to be correlated with equity market returns. In addition, a portion of the Fund is typically invested in cash and margin deposits.

Fund performance

Source: Profile Data

Downloads

Suitable for investors who...

  • Seek absolute (i.e. positive) returns regardless of stock market trends
  • Require a high degree of capital stability over a 3-year time horizon
  • Wish to invest in a product that offers uncorrelated returns relative to shares or bonds as a ‘building block’ in a diversified multi-asset class portfolio

Benchmark

The Fund’s benchmark is the daily interest rate as supplied by FirstRand Bank Limited.

Strategy of Allan Gray Optimal Fund

The Fund invests in selected shares and seeks to substantially reduce stock market risk by selling exchange-traded equity index derivatives. The selected share portfolio is derived from Allan Gray's thorough research process, but the selection of equities in this Fund may differ from that in the other Allan Gray funds. The deviation of the Fund’s selected share portfolio from the composition of the underlying benchmark indices (on which the derivative contracts are based) is restricted and closely monitored. This does not eliminate the risk of capital loss should the selected equities underperform.

Fund Manager

Sean Munsie

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