It’s been almost five years since independent investment advisors started their appeal to Allan Gray to extend their investment offering into the global mixed asset or Global Balanced Fund sphere.
The reason for this request was that advisors believed in Allan Gray and Orbis’s ability to manage money. We also felt that we needed another high quality Balanced Fund offering to bring to our clients. An offering which would not only do well while equity markets were on the up, which both Allan Gray and Orbis funds achieve handsomely, but one which would also protect our clients’ capital from falling too much while equity markets were moving downwards.
This week Orbis is launching their Global Balanced Fund to advisors at the various centres around the country as part of the annual Allan Gray roadshow. It certainly looks as though they have applied the same sort of rigorous analysis of the Global Balanced Fund space as we have come to expect of them whenever they embark on something new. Orbis have not looked outside of their own team of professionals for bond expertise. They have looked clearly at this asset class and have realised that when a stock is undervalued, that firm is also normally undervalued on the debt side of the balanced sheet. This has allowed them to apply their current expertise, with some adjustments, to this additional asset class and to therefore be able to include bonds in this new fund.
They have tested the process since January 2013 and have decided to launch the fund to new money around the world.
If the record of the Orbis Global Equity Fund, with its size now around US$14.7bn, is anything to go by, we can probably expect this new Global Balanced fund to reach US$1bn within two or three years.
As equity markets have now experienced almost 5 1/2 years of growth, the likelhood of a downturn increases. This could therefore lead to a mixed asset fund such as this becoming extremely popular in the coming weeks.
The fund factsheet can be accessed by copying and pasting this link into your browser:
https://www.orbisfunds.com/OurPerformance/FactSheets/OrbisFactSheet_GlobalBalanced-April-2014.pdf
