Wednesday, August 17, 2022

Allan Gray Botswana offers  unit trusts to retail investors

Allan Gray Botswana, the asset management firm   sounded warning bells to the market about its intentions to  widen the scope for individual investors as it unveiled  its  superior long-term investment performance for Botswana  market  through a suite of nine unit trusts.

 Managing Director Tapologo Motshubi  praised the firm for its strong  growth  it registered over the past six years, that have  resulted in the company  managing  assets to the tune of  P3.25 billion .

┬á“Having established our credentials in the institutional market, we are now ready to open our doors to retail investors,” Motshubi said.┬á

 Founded in 2004, Allan Gray Botswana is an independent investment company that shares the investment philosophy and purpose of the broader Allan Gray group.

┬áThe funds being offered are the Allan Gray Equity Fund, Allan Gray Balanced Fund, Allan Gray Stable Fund, Allan Gray Optimal Fund, Allan Gray Bond Fund, Allan Gray Money Market Fund, Allan Gray-Orbis Global Fund of Funds, Allan Gray-Orbis Global Equity Feeder Fund, and Allan Gray-Orbis Global Optimal Fund of Funds.┬á The last three are invested in selected funds from Orbis, Allan Gray’s global asset management partner.

┬áIn keeping with the firm’s philosophy of simplicity, the funds are intended to be easy to understand, with names that clearly reflect their investment mandates.

┬áThe Allan Gray Equity Fund, for example, invests in South African equities; the Allan Gray Balanced Fund invests in a balanced portfolio of assets, such as shares, bonds, property and cash, and is managed in accordance with South African prudential investment guidelines. The Allan Gray Bond Fund invests in a combination of government and corporate bonds and cash, while the Allan Gray Money Market Fund is likewise self-explanatory.┬á There has historically been a close correlation between Botswana and South Africa’s exchange rates, given the later’s status as one of Botswana’s largest trading partners.

 One of the benefits of unit trusts is their comparative simplicity as an investment vehicle. Most investors find them easy to understand, easy to track from a performance perspective and easy to invest and disinvest. They also offer investors diversification, thereby limiting risk.

┬á“Risk is spread among investments that are uncorrelated. If you invest in a single share and that company performs badly and its share price goes down, you can suffer a significant loss. But investing in a fund that invests in 40 different company’s shares, for example, if one of those underperforms, the effect would be minimal and could even be cancelled out if another company’s share outperforms,”┬á he said.

┬áAlthough the firm believes that it is best to leave your money invested for three to five years in order to earn a decent return, Allan Gray’s unit trusts require no minimum investment period and investors are able to withdraw their investment whenever they need to without penalties.

┬áFurther, unit trusts provide access to experts, skilled in managing money, and usually backed by highly experienced research teams.┬á “It’s extremely hard for the average investor to track the fortunes of individual shares, to understand their financials in depth and construct a diversified investment portfolio,” Motshubi said.┬á


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