Barring a catastrophic collapse in the gold bullion price, and therefore in the share prices of gold miners, there is a single balanced fund among the five largest that will handily outperform this year.
That this is the largest balanced fund in SA is astonishing, given that it has nearly R100 billion more assets under management than the second-largest balanced fund.
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Being a balanced fund is important given that these funds are the options that South Africans are able to invest their retirement funds into, under so-called Regulation 28.
This regulation, under the Pension Funds Act, sets various limits on how funds can invest in various asset classes to ensure diversification, in an effective exchange for tax deductions for contributions.
Read: Planning commission punts use of Regulation 28 to redirect funds to infrastructure [Dec 2025]
| Assets under management* | Year-to-date** | Percentile rank** | Total expense ratio (TER)*** | |
| Allan Gray Balanced Fund | R239.8 billion | 22.75% | 18 | 1.46% |
| Coronation Balanced Plus Fund | R145.6 billion | 18.59% | 52 | 1.62% |
| Ninety One Opportunity Fund | R97.9 billion | 11.02% | 93 | 2.1% |
| Discovery Balanced Fund | R53.1 billion | 18.93% | 49 | 2% |
| M&G Balanced Fund | R32.8 billion | 21.71% | 25 | 1.41% |
* As at 31 October 2025, excluding M&G which is at 30 September
** As per Morningstar at 5 December
*** Retail units (A- or R-class)
The simple reason for Allan Gray’s fund being in the top quarter in terms of performance has been “its preference of equities over bonds” versus the rest.
It certainly wasn’t hindered by its exposure to gold, although some other funds have exposures among their top 10 holdings double that of Allan Gray.
AngloGold Ashanti is the Allan Gray Balanced Fund’s third-biggest holding, at about 3% of the fund. Interestingly, it maintains it has an underweight position in precious metal shares on the JSE.
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At the end of September, fund managers Duncan Artus, Rory Kutisker-Jacobson and Tim Acker said that “the fund has delivered 19% year to date, outperforming its benchmark by 4%”.
“Over the last three years, the fund has achieved an annualised return of 17%, compared to inflation of 4%. While the performance is pleasing, we recognise that the level of real returns generated is higher than what we would expect the fund to sustain over the long term.”
| Gold share holdings in top 10 | Local equities | Foreign equities | |
| Allan Gray Balanced Fund | AngloGold Ashanti 2.9% | 41.1% | 33.2% |
| Coronation Balanced Plus Fund | AngloGold Ashanti 1.8%
Gold Fields 1.5% |
36.9% | 33.9% |
| Ninety One Opportunity Fund | – | 29.9% | 35.1% |
| Discovery Balanced Fund | Gold Fields 3.1%
AngloGold Ashanti 2.2% |
40.4% | 32.5% |
| M&G Balanced Fund | Gold Fields 3.6%
AngloGold Ashanti 3.4% |
40.4% | 26.1% |
Allan Gray says “gold shares have delivered exceptional recent returns and now account for 16% of the index [as at 30 September]”.
“While each company has its own idiosyncratic fundamentals, the dominant driver has been the rising gold price. Gold and shares of gold mining companies can offer valuation diversification benefits in a portfolio. At the current gold price, valuations for gold shares are not high, which adds to their appeal.
“However, forecasting the gold price with confidence is notoriously difficult, so some humility in this area is advised,” it adds.
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“History reminds us that most gold mining companies have been poor businesses over the long term, often destroying value through acquisitions or overspending on new projects. We balance these factors by carefully considering the fund’s total exposure to the sector, without blindly anchoring to the weight in the Index.”
At the end of June, it detailed its exposure to gold (both directly and indirectly via its offshore partner, Orbis) with 6.2% of the fund exposed to either miners (4.3%) or commodity-linked exchange-traded funds (1.9%).
It noted at the time that, over the past decade, the rand gold price “has appreciated 320%, outpacing the MSCI World Index total return of 308% and the FTSE/JSE All Share Index total return of 161%”.
Gold ‘repositioning’
Allan Gray analyst Umar-Farooq Kagee argues that “gold seems to be repositioning from a passive reserve asset to an active pillar of monetary strategy” due to it being politically agnostic (in a geopolitically fraught world), having zero default risk, and because of new trade blocs – including Brics and increasing importance of the European Union.
He says: “Although the US dollar’s dominance remains unmatched for now, the paradigm shift is undeniable. Gold’s ancient role – as a reserve of last resort – is finding new relevance in a world where geopolitical risk is no longer a tail event, but a structural feature. Central bank purchases have surged, particularly in emerging markets, with gold bulls arguing that the International Monetary Fund’s official disclosure grossly understates the true magnitude of this trend.”
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It must be noted that Ninety One’s stark underperformance among balanced funds should be seen in the context of 29.9% of its fund being allocated to the technology sector, with a further 25.2% in financials, 14.7% in consumer staples and 12.3% in consumer discretionary. Only 2.7% of its fund is in basic materials.
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