MONEY MASTERS

Allan Gray: Stable Fund

Suhas Nayak. portfolio manager Allan Gray Australia

Humans love to move together and have a fear of missing out, and our investing behaviour is no different. The Allan Gray Australia Stable Fund goes against the grain and takes a contrarian perspective, seeking out-of-favour stocks and purchasing them at a discount for medium-to-long term returns. The fund takes opportunistic leaps that combat volatility and can provide stable returns suitable for retirees, pre-retirees or those who are making their first steps into the world of investing.

What you'll learn /

The Allan Gray Australia Stable Fund Money Masters course with Suhas Nayak will give you insights into:

How a cash-based fund can provide stable income over a medium to long-term period
How a contrarian philosophy can show long-term value in under-valued stocks
The value of a team with a variety of career backgrounds
The way Allan Gray combats the current climate of low interest rates

About the expert /

Suhas Nayak /

portfolio manager Allan Gray Australia


Suhas joined Allan Gray as an analyst in 2011 and had been a portfolio manager since 2016. Prior to this, Suhas spent five years at McKinsey & Co, leaving as an engagement manager. He has a Bachelor of Science with Honours from the California Institute of Technology and holds a Doctor of Philosophy in Mathematics from Stanford University.

  • CPD hours1
  • Knowledge AreaManaged Investments
  • TypeMoney Masters
  • PriceFree
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Outline of the course /

OVERVIEW

Fund Philosophy

Long-term, fundamental, contrarian. These words sum up the philosophy behind the Allan Gray Australia Stable Fund. With a default setting in cash, the fund moves in and out of the equity market whenever it sees value in an attempt to minimise permanent capital loss.

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01.

Competitive Advantage

By cutting through the noise, the Allan Gray Australia Stable Fund sees the long-term value in stocks that others miss. The group’s contrarian philosophy coupled with cash-heavy holdings means the fund goes into equities only when value presents itself.

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02.

Role in Portfolio

The Allan Gray Australia Stable Fund aims to provide returns better than inflation, as well as regular income for investors who are willing to invest over the medium to long-term. It can also offer a low-risk option for those who want returns higher than cash, but less volatile than equity.

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03.

The Team

Managed by Simon Mawhinney, the Allan Gray Australia Stable Fund is run by a team as different as the stocks they pick. These investment professionals came to Allan Gray after finding success as engineers, doctors, mathematicians and physicists. These varied backgrounds provide a competitive edge to their valuations.

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04.
STRUCTURE AND OBJECTIVES

Rules and Returns

The Allan Gray Australia Stable Fund will always be a minimum of 50 per cent cash and will only move into equities when it finds particular value opportunities. With a base fee of 25 basis points, the fund has a 20 per cent performance fee charged only when performance is above and beyond the best performance to date.

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05.
BEST SUITED FOR

The Ideal Investor

The Allan Gray Australian Stable Fund is ideally suited for retirees or pre-retirees seeking low-risk, stable income, as well as those investors who want to take their first steps in venturing away from term deposits. Those with a low-risk tolerance will appreciate the low volatility nature of the cash-based fund.

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06.

Key Considerations for Investors

Functioning in a low-interest rate environment where asset prices are currently very high, the Allan Gray Australia Stable Fund combats this trend with its contrarian and opportunistic philosophy. Equity is bought when markets are at a low and the fund maintains its cash-heavy philosophy to aim to provide lower volatility.

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07.

Test yourself /