New Namibian unit trust for private investors
“Previously only available to retirement funds, the newly registered Allan Gray Namibia Balanced Fund is also suitable for individuals and non-pension fund clients.
We want to ease access for the man on the street to quality investment products and service,” said Tapologo Motshubi, managing director of Allan Gray Namibia.
The fund, which is managed to comply with Regulation 28 of the Namibian Pension Funds Act, is suitable for investors who seek steady, long-term capital growth and are comfortable with taking on some risk of market fluctuations and potential capital loss, but typically less than that of a pure equity fund. Investors should have an investment horizon of at least three years.
The fund is an asset allocation fund, which means the fund manager can invest in a mix of shares, bonds, property, commodities and cash.
Also known as ‘solution’ funds, asset allocation funds are often a good choice for investors looking for a well-diversified investment solution.
“Solution funds recognise that it is difficult for the average investor to make asset allocation decisions themselves, and solution funds put these decisions in the hands of the experts,” said Motshubi. The Fund may invest up to 35% of its assets outside the common monetary area (CMA). This allowance is typically invested in a mix of funds managed by Orbis Investment Management Limited, Allan Gray’s offshore investment partner. The Fund is allowed an additional 5% for investments in Africa ex-CMA.
This portion will be invested in Allan Gray’s Africa ex-South Africa funds.
“The fund manager can use his discretion to increase or decrease his exposure to certain asset classes or regions depending on where he sees opportunities at any point in time. This gives investors the best chance of achieving long-term returns,” Motshubi noted.
Allan Gray is a contrarian manager, which means the company often invests contrary to the rest of the market.
“A contrarian looks for opportunities to buy or sell a specific investment when the majority of investors appear to be doing the opposite, to the point where it has become mispriced,” Motshubi explains.
Motshubi acknowledges that the Allan Gray Namibian Balanced Fund is not suitable for everyone and is hoping that soon there will be additional funds made available to interested investors.
Allan Gray Namibia is in the process of registering its African, offshore and South African funds with the Namibian Financial Institutions Supervisory body (NAMFISA). He said Allan Gray Namibia shares the investment philosophy and purpose of the broader Allan Gray group, which was established in 1973 and has N$505 billion total assets under administration and management.