With the end of the financial year fast approaching, there are a few important things to note.

Distributions for all the Allan Gray Australia Funds will be made on 30 June, with payments expected to be made on or around Monday 15 July 2019.

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 five business days written notice prior to 28 June 2019 to change a distribution instruction.

The Allan Gray Australia Funds will reflect their new unit price from 1 July, with the exception of the Allan Gray Australia Balanced Fund. There may be delays of up to 10 business days after 30 June in calculating the unit price for the Balanced Fund. The Fund is characterised differently to our other Funds for tax purposes, which means that calculating its unit price after 30 June can take a bit longer. You can learn more about the reasons why in our FAQs.

What does this mean for you?

Investors who buy or sell units in the Balanced Fund during these 10 business days will have their transactions delayed until the unit price is calculated. The Fund will be valued daily, therefore the unit price will change daily, but investors won’t know the price they receive until the year-end distribution has been finalised and we release daily prices.

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 clearly 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 clientservices@allangray.com.au.