What are the key differences between the 10X RA and the Allan Gray retirement annuity?

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10X Retirement Annuity

Type of RA: 10X offers only the new-generation (unitised) RA.

Investment strategy: The 10X RA offers just one optimal portfolio. This portfolio is fully diversified across asset classes, securities, countries and currencies and adjusts automatically to your age and investment time horizon. 10X uses index funds.

Fund performance: the 10X High Equity Fund, owned by more than 90% of 10X investors, returned 12,3% pa for the five years ended 31 May 2017, after fees (assuming a 1,04% pa fee).  

Fees: The 10X RA charges just one investment management fee. The maximum investment fee is 1,04%. The TER (total expense ratio), which includes trading costs is 1,20%. The 10X reported returns are net of these trading costs. The investment fee drops to 0,8% pa on amounts above R1m and to 0,57% pa on amounts above R5m. 10X does not charge admin, initial, exit or performance fees.

Advisor: You have the option to invest directly online, or you can engage an adviser. You can negotiate a maximum advisor fee up to 1,14% pa.

Contributions:  The minimum contribution (monthly or ad hoc) is R1,000, and the minimum lump sum investment is R12,000.

Variation charges: none.

Allan Gray RA

Type of RA: The Allan Gray annuity fund offers only the new generation (unitised) RA.

Investment strategy: You have access to the Allan Gray range of unit trusts. The recommended offering is quite simple: there are four funds across the risk-return spectrum, ranging from a pure Equity to a Money Market fund, bracketing two multi-asset funds – the Balanced (high equity) and the Stable (medium equity) fund. These funds are all actively managed. But you can also build your own portfolio using their specialist unit trusts, as well as unit trusts from other investment managers.

Fund performance: The most apt comparison with the 10X High Equity Fund is the Allan Gray Balanced Fund. The return for the five years ended 31 May 2017 was 12,9% pa, after fees. The 12m total investment charge for this investment was 1,68%.

Fees: The TER (total expense ratio) varies per fund. The two multi-asset funds mentioned above have a published TER of 1,68% and 1,71% pa respectively.

The fee depends on how well the fund performs against their benchmark. The charge is 1% pa when the performance matches the benchmark return. If the return beats or lags the benchmark return, measured over two years, the fee increases or reduces by 0,1% for each percentage difference. The maximum fee is 1,71% pa.

If the Stable Fund's return over two years is equal to or less than 0%, Allan Gray does not charge a fee.

There are no other fees. 

Advisor: You have the option to invest directly online, or to engage an advisor. You can negotiate a maximum advisor fee up to 1,14% pa. The Allan Gray retirement annuity fund permits an initial fee of up to 3,42%. Where the annual fees are more than 0.5%, initial fees are capped at 1.5%. Where the initial fee is more than 1.5%, the maximum annual fee is 0.5%.

Variation charges: none.

Minimum contributions: R500 (monthly or ad hoc), with a minimum lump sum contribution R10,000.

Variation charges: none.

Source: 10X Investments; 10X Investment Report 31 May 2017; Allan Gray (www.allangray.co.za); Allan Gray Balanced Fund Fact sheet 31 May 2017. Information sourced on 28 June 2017.

Disclaimer: We are not affiliated, associated, authorized, endorsed by, or in any way connected with Allan Gray or any of its subsidiaries or its affiliates. Allan Gray’s website can be found at http://www.allangray.co.za. The use in this website and/or in related promotional print or video material of trademarked names and images is strictly for editorial and descriptive purposes, and no commercial claim to their use, or suggestion of sponsorship or endorsement, is made by 10X Investments. Any product names, logos, brands, and other trademark or images featured or referred to within this website are the property of their respective trademark holders. These trademark holders are not affiliated with 10X Investments, our products, services, or our websites.

Whilst all efforts are made to provide you with the most accurate details, 10X Investments bears no responsibility for the correctness and accuracy of the content sourced above.

The information and answers supplied in this section do not constitute advice as defined by the Financial Advisory and Intermediary Services Act, 37 of 2002.

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