Why does it matter that we invest our money in the same way that we invest yours?
We know that we need to earn your trust
There are certain things in life that you can only entrust to the experts, like your and your family’s health. To trust any expert with an important life decision requires trust and credibility. When you ask your doctor if he would use the medication or undergo the treatment that he prescribes himself or give to his family, it would give you great peace of mind if he says ‘yes’. (On the other hand, you would be very concerned if he said ‘no’.) The conviction and credibility of his recommendation is sealed when he is willing to apply it to his own life. The same applies to investing your hard-earned money.
When it comes to following an investment strategy, we do what we say we will
We write and talk a lot about our contrarian approach to investing – we go against the crowd and aim to underpay rather than to overpay for any investment we buy. We believe this is the most effective way to grow wealth over time. In fact, we are so convinced about the approach that we invest our own money this way. All of these accounts invest in the same investments as our clients, on the same basis and according to the same terms.
Even our business is structured to make sure that we benefit if our clients benefit
Our business is privately owned by people who work at Allan Gray Australia. The owners’ equity is tied up while they work for the firm, PLUS 10 years after they leave the firm. This incentivises senior management and the owners to make good long-term business decisions. From an investment point of view, to apply our contrarian approach successfully requires us to take a long-term view (because it takes time for market perceptions about stocks that are currently unloved to normalise). We also charge performance-based fees so that if our clients receive better performance, we earn better fees.
We are therefore incentivised to a much higher degree than many other investment managers to ensure that we take a long-term approach in all our business and investment decisions.
And this isn’t just what we say…
According to the independent research firm Lonsec, one of the strongest features of the management of the Allan Gray Australia Equity Fund is its alignment of interest with investors. In fact, they regard the level of co-investment by the team as rare. This provides evidence of our conviction in our investment philosophy.
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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.
Allan Gray’s contrarian investment philosophy and absolute alignment of interest are the major reasons that I choose to use Allan Gray for my own portfolio, and also for my clients. I run the same principles in my business, in that my clients receive the same professional managed portfolios that also appear in my portfolio. Clients appreciate that, as do I of the professional managers that I employ.
Hi Adam. Many thanks for your feedback. It is a great compliment to have advisers invest their clients with us because that is where they invest their own money. We appreciate the opportunity to work with advisers like yourself who have a strong investment in their clients’ best interests. No doubt your clients do too!