With the end of the financial year fast approaching, there are a few important things to note about our Funds and distributions. The key points are below, or you can learn more in our FAQs.
Distributions for all the Allan Gray Australia Funds will be made on 30 June, with payments expected to be made on or around Wednesday 15 July 2020. The Allan Gray Australia Funds will reflect their new unit price from 1 July 2020.
If your clients hold units in the Allan Gray Australia Funds please check their distribution instruction and let us know if you would like to change it as soon as possible. We require written notice on or before 24 June 2020 to change a distribution instruction to meet the 30 June 2020 deadline.
Why does the unit price fall after a distribution?
If, like us, you receive a number of calls from clients each year who are concerned the value of their investment has reduced after the distribution is paid, the graph below may help you explain. In our experience, what most investors haven’t realised is that although it is true that the unit value reduces, it’s important to remember that this is because the investor has been paid that money so their total wealth remains the same.
This is illustrated in the chart below. When the distribution is paid, the unit price reduces by the same amount.
Source: Allan Gray. For illustrative purposes we have assumed the unit price increases at a constant rate. This is unrealistic, as investment performance doesn’t follow a straight line. We have also ignored any tax implications for simplicity.
If you need any assistance please contact your usual Relationship Manager or our client services team on 1300 604 604, or [email protected].
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Equity Trustees Limited ABN 46 004 031 298, AFSL No. 240975 is the issuer of units in the Allan Gray Australia Balanced Fund ARSN 615 145 974, Allan Gray Australia Equity Fund ARSN 117 746 666 and Allan Gray Australia Stable Fund, ARSN 149 681 774 (Allan Gray Funds) and units in the Orbis Global Equity Fund (Australia registered) ARSN 147 222 535, Orbis Global Equity LE Fund (Australia registered) ARSN 613 753 030 and Orbis Global Balanced Fund (Australia registered) ARSN 615 545 170 (Orbis Funds). Allan Gray Australia Pty Limited ABN 48 112 316 168, AFSL No. 298487 is the investment manager of the Allan Gray Funds.
Past performance is not a reliable indicator of future performance. There are risks involved with investing and the value of your investments may fall as well as rise. This represents Allan Gray Australia Pty Limited and Orbis Investment Advisory Pty Limited’s view at a point in time and may provide reasoning or rationale on why we bought or sold a particular security for the Allan Gray or Orbis Funds or our clients. We may take the opposite view/position from that stated, as our view may change. If this article is authored by Orbis, it does not prohibit the Orbis Funds from dealing in the securities before or after this article is published. This article constitutes general advice or information only and not personal financial product, tax, legal, or investment advice. It does not take into account the specific investment objectives, financial situation or individual needs of any particular person and may not be appropriate for you. We have tried to ensure that the information here is accurate in all material respects, but cannot guarantee that it is.
You should consider the relevant funds’ Product Disclosure Statement (PDS) or Information Memorandum (IM), as applicable, before acquiring, holding or disposing units in the Allan Gray or Orbis Funds. The PDS or IM can be obtained from
www.orbis.com.au and www.allangray.com.au.
Target Market Determinations (TMDs) for the Allan Gray products can be found at
allangray.com.au/PDS-TMD-documents,
while TMDs for the Orbis Funds can be found at www.orbis.com.au on the 'Forms' page under 'How to Invest'. Each TMD sets out who an investment in the relevant Allan Gray or Orbis Funds might be appropriate for and the circumstances that trigger a review of the TMD.
Managed investment schemes are generally medium to long-term investments. They are traded at prevailing prices and the value of units may go down as well as up. There are risks with investing the Fund and there is no guarantee of repayment of capital or return on your investment. Subject to relevant disclosure documents, managed investments can engage in borrowing and securities lending. A schedule of fees and charges is available in the PDS.
