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Satrix Balanced Index Fund Satrix Balanced Index Fund

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Satrix Balanced Index Fund

You are saving for the long term and looking for a well-diversified portfolio – some shares, some listed property and some fixed interest assets. You are comfortable with fluctuations in your capital value over the short term.

This fund is suitable for long-term retirement savings and offers diversified exposure to all the key local and international asset classes, with a smart SA equity (shares) core. The fund tracks a composite index, with a long-term strategic asset allocation. This fund is best suited to investors with at least a medium-term investment horizon (3-5 years). For more information contact your financial adviser or broker.

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Quick Facts About The Fund

Satrix Balanced Index Fund

Launch Date: Oct 2013
Fund Size: R1 311.9 million
Benchmark: Proprietary Satrix Balanced Index
Time Horizon: 3 – 5 years
Risk Profile: Moderate Aggressive
Fund Classification: SA - Multi-Asset - High Equity
Min Investment Amount: Lump sum: R10 000 | Monthly: R500
Total Expense Ratio (TER): 0.87%
Launch Date: Oct 2013
Fund Size: R1 311.9 million
Benchmark: Proprietary Satrix Balanced Index
Time Horizon: 3 – 5 years
Risk Profile: Moderate Aggressive
Fund Classification: SA - Multi-Asset - High Equity
Min Investment Amount: Lump sum: R10 000 | Monthly: R500
Total Expense Ratio (TER): 0.87%

Fund Strategy

The composite benchmark of the fund comprises the following asset class building blocks:

Asset class Index exposures

Smart SA equity core (55%) 25% Proprietary Satrix Stable Dividend Index
25% S&P Quality Index
50% Proprietary Satrix Momentum Index
SA bonds (8%) FTSE/JSE All Bond Index
SA property (6%) FTSE/JSE SA Listed Property Index
SA inflation-linked bonds (6%) Barclays SA Gov Inflation-Linked Bond Index
SA cash (5%) SA Nominal Cash
International equities (15%) MSCI World Equity Index
International bonds (5%) Barclays Global Treasury Index

The asset composition of the index aims to target a CPI+5.5% return over the long term.

Illustrative Annualised Investment Performance

Performance

Annualised as at 30 Jun 2016 on a rolling monthly basis
Retail Class Fund (%) Benchmark (%)
1 year 6.88 7.99
3 year N/A N/A
5 year N/A N/A
Since inception 8.90 10.35

Annualised return is the weighted average compound growth rate over the period measured
Actual highest and lowest annual figures for rolling 10 years
Highest Annual % 7.84
Lowest Annual % 6.88

Minimum Disclosure Document (Fund Fact Sheet)

Illustrative Annualised Investment Performance

Satrix Balanced Index A1
(ASISA) South African MA High Equity

Source of graph : Morningstar

This graph illustrates how an investment of R100 would have grown had you invested in 2010 until 2016. Like everything in life, all investments can change and come with some degree of risk. That’s why we need this disclaimer, to tell you that past performances are not necessarily a guide to future performances, and that the value of investments/units/unit trusts may go down as well as up. The performance shown in the table above is a graphical representation of your selection (of the benchmark’s past performance of the fund you selected) – including your investment objective, risk profile and fund choice – and is based on the past performance of the fund in relation to your investment. This performance is indicative and not guaranteed. The graph is for illustrative purposes only and investment performance is calculated by taking into account initial fees and all ongoing fees that you have to pay and the income reinvested on the reinvestment date. The actual fund performance can be viewed on the Minimum Disclosure Document. The Manager has the right to close the portfolio to new investors in order to manage it more efficiently in accordance with its mandate

1. Naspers N 5.27%
2. FirstRand / RMBH 3.27%
3. BTI Group 2.85%
4. Mediclinic International PLC 2.65%
5. Vodacom 2.20%
6. Brait 2.09%
7. AVI 1.98%
8. Truworths 1.68%
9. Sanlam 1.66%
10. Investec 1.59%
1. Naspers N 5.27%
2. FirstRand / RMBH 3.27%
3. BTI Group 2.85%
4. Mediclinic International PLC 2.65%
5. Vodacom 2.20%
6. Brait 2.09%
7. AVI 1.98%
8. Truworths 1.68%
9. Sanlam 1.66%
10. Investec 1.59%
Cash And Money Market Assets
Bonds
Property
Equities
International Assets
Inflation Linked Bonds

Unit Trust application forms

View, print and complete the form of your choice.
Email or fax the completed form to UTinstructions@sanlaminvestmentssupport.com or 0860 724 467

Unit Trust Application Form – Individuals Download PDF
Unit Trust Tax-Free Application Form Download PDF
Unit Trust Application Form Download PDF
Unit Trust Additional Investment Form Download PDF
Unit Trust Switching Form Download PDF
Unit Trust Investor Detail Update Form Download PDF

Helena Conradie

Chief Executive Officer – Satrix

With a CFA and multiple degrees in Maths and Applied Maths, Helena clearly knows numbers. She started in a small start-up investment team, cut her teeth as a statistical research officer at Sanlam Life and also worked on the creation of Sanlam’s linked-product company, now known as Glacier. Since rejoining Sanlam Investment Management in 2000, Helena has built up a smart-thinking team that manages the largest equity portfolio of exchange traded funds (ETFs) in South Africa. They also have more than R30 billion in assets under management. That's quite a number.

Helena Conradie

HChief Executive Officer – Satrix

With a CFA and multiple degrees in Maths and Applied Maths, Helena clearly knows numbers. She started in a small start-up investment team, cut her teeth as a statistical research officer at Sanlam Life and also worked on the creation of Sanlam’s linked-product company, now known as Glacier. Since rejoining Sanlam Investment Management in 2000, Helena has built up a smart-thinking team that manages the largest equity portfolio of exchange traded funds (ETFs) in South Africa. They also have more than R30 billion in assets under management. That's quite a number.

Traditional Investing (When you invest via a Financial Adviser or other)

  • Retail Class (%)
  • Advice initial fee (max.) N/A
  • Manager initial fee N/A
  • Advice annual fee (max.) 1.14
  • Manager annual fee 0.66
  • Total Expense Ratio (TER) 0.87
  • Transaction Cost (TC) 0.24

Advice fee | Any advice fee is negotiable between the client and their financial advisor. An annual advice fee negotiated is paid via a repurchase of units from the investor.

Where this fund invests into other unit trusts, it does so into zero fee classes except for offshore equity (0.30%) and offshore bonds (0.12%).

Total Expense Ratio (TER) | The Total Expense Ratio (TER) is the charges incurred by the portfolio, for the payment of services rendered in the administration of the CIS. The TER is expressed as a percentage of the daily NAV of the CIS and calculated over a period of 3 years on an annualised basis. The TER is calculated since inception to 31 March 2016. A higher TER does not imply a poor return nor does a low TER imply a good return.

The Transaction Cost (TC) is the cost incurred by the portfolio in the buying and selling of underlying assets. This is expressed as a percentage of the daily NAV of the CIS and calculated over a period of 3 years on an annualised basis.

When you invest online

Traditionally, investment advice come with a fee of up to 1%. But our smart online system is working to make investing cheaper and more profitable for you. The management fee you do pay is based on the fund selected and calculated on your total contributions, and then applied to the overall value of your portfolio.

YOUR INVESTMENT WILL NOT CHARGE THE FOLLOWING FEES

  • No initial account set-up fees – usually charged at 1.14%.
  • No switching fees
  • No exit fees
  • No account changes fees
  • No rebalancing fees
  • No commissions
  • No debit order fees
  • No fund manager rebates

SO YOU’RE ONLY CHARGED THE RELEVANT FUND-MANAGEMENT FEE

  • Total Annual Fee: 1.0%

Satrix, pioneers in the passive management space are now fully owned by Sanlam. It was the first to market with a passive solution and recently launched SA’s first smart beta multi-asset fund. The Satrix range is Sanlam’s answer to the growing demand for low-cost investments with a predictable index-linked outcome.

Sanlam Collective Investments (RF) (Pty) Ltd and Satrix Managers (RF) (Pty) Ltd, a registered and approved Manager in Collective Investment Schemes in Securities. Collective investment schemes are generally medium- to long-term investments. Past performance is not necessarily a guide to future performance, and that the value of investments / units / unit trusts may go down as well as up.

A schedule of fees and charges and maximum commissions is available from the Manager on request. Collective investments are traded at ruling prices and can engage in borrowing and scrip lending. The Manager does not provide any guarantee either with respect to the capital or the return of a portfolio.

Annualised Total Returns
Annualised return is the weighted average compound growth rate over the period measured.

Amid the turmoil that greeted an end to a dramatic second quarter domestic fixed interest asset classes again proved their defensive mettle. Both nominal bonds and inflation-linkers contributed handsomely to the Balanced Fund, returning 4.4% and 4.7% respectively. Despite the volatility experienced in both local and global equity markets both managed to render a positive return as well. The ALSI and SWIX returned 0.4% and 1.3% respectively over the quarter while the MSCI World delivered a steady return of 1.0% in USD. Foreign bonds also provided welcome diversification posting a healthy 2.9% return in USD. Domestic property was the only asset class that faltered over the quarter, posting a return of -0.4%. The UK vote to leave the EU surprised almost everyone, especially market participants and it left unprecedented uncertainty about future economic and political relations between the UK and the EU. From a US perspective, the market sell-off has been large but orderly.

The short-term Brexit issues seemed to wash out of markets during the last few days of June with almost all global market indices recovering to pre-Brexit levels, largely on the back of hints from both the Bank of England and the European Central Bank that stimulus may again be on the cards if required. That being said, longer-term trade policy and UK political leadership issues will still be a concern for a long time to come. Whereas spot prices have stabilized, there appears to be little conviction amongst financial market participants about the course of exchange rates and asset prices going forward. Interestingly, gold also remained high despite sentiment shifting back towards risk-on. Maybe the market is trying to tell investors something?

In terms of central bank policy, there is now a growing belief that, in light of the recent global uncertainty, the Fed might keep interest rates unchanged this year. This renewed belief in easy money - as well as lower yield in the US - has also led to some renewed interest from international investors in emerging markets. In local markets, the trade surplus for May came in significantly higher than expected at R18.7 billion, giving further impetus to an already strengthening rand. Being one of the most volatile emerging market (EM) currencies, the rand was the second best EM performer against the dollar in June, gaining 6.7% over the month. Given this currency improvement, somewhat stronger economic data, the fact that credit agencies left SA’s credit rating unchanged and a recent inflation reading coming in lower than expected, investors will be eager to see whether the MPC decides to halt its rates upcycle, for now.

In South Africa, the Shareholder Weighted Index (SWIX) still managed to end the quarter up about 1.3% and the All Share Index up 0.4%, despite all the volatility and the very poor performance from the basket of SA corporates, with exposure to UK earnings - namely INTU Properties, Capital and Counties, Redefine, Brait, Investec and Bidcorp, to name just a few. During the quarter we saw strong performances from Resources (+6.4%), whilst Industrials also managed a positive return of 0.5% and Financials returned a very weak -4.3%.

South Africa also saw significant inflows into equities (R58bn) during the month of June, reversing year-to-date numbers to a positive figure of around R20 billion. Market sentiment remains tentative and small catalysts could be very disruptive in future. Uncertainty can induce a significant drag on economic growth. The Brexit vote amplifies uncertainty with unprecedented economic and political considerations whose impact on global economic activity is difficult to discern.

Momentum: Amid an ever tightening environment both locally and globally the price momentum and earnings revision factors continued to struggle in the first half of 2016. The lack of visibility emanating from the surprising and severe Brexit event and its contagion posed further challenges to the trending momentum factors as we closed out the first half of the year. Stocks with significant EBITDA exposure to the UK economy found it particularly hard going and detracted most over the quarter. The factor’s weakness over the quarter was primarily due to stock selection in the financial and resource sectors. Stock that detracted most in the financial sectors were overweight positions in Brait (BAT), Investec Ltd (INL) and Investec plc (INP); the overweight position in Truworths (TRU) also detracted. Our overweight positions held in Clicks (CLS) and Mediclinic (MEI) and the underweight positions in Richemont (CFR) and Sanlam (SLM) contributed positively to the relative performance experience.

As we closed the quarter, we transitioned the portfolio based on the evaluation of new factor signals and the risk levels in the portfolio, with new entrants coming in the form of Anglo American (AGL), Anglo Platinum (AMS) and the Johannesburg Stock Exchange (JSE) that demonstrated very strong price and earnings momentum attributes. Exxaro (EXX), Woolworths (WHL) and KAP Industrial (KAP) completely exited the portfolios based on waning factor signals. We remain convinced of the momentum factor’s medium- to long-term significance and the premium it offers in the South African capital market and remain disciplined in our implementation and extraction of the factor.

Stable Dividend: Using our very own extraction of the yield (value) factor through the Satrix Stable Dividend Index we have negotiated the first full calendar quarter extremely well. While the yield factor has rerated sharply since the beginning of the year, the Stable Dividend Index proved far more defensive in May relative to the FTSE/JSE Dividend Plus Index. Since 18 March (previous rebalance) until the end of June the Stable Dividend Index outperformed the FTSE/JSE variant by 3.6%. Over the quarter, though, the month of May proved telling and the yield (value) factors are both lagging the market.

The large underweight exposure to Naspers (NPN) and overweight positions in Netcare (NTC), Truworths (TRU), BID Corporation Ltd (BID) and Investec Ltd (INL) were negative relative detractors. Significant positive relative contributors were found in the overweight positions in Bidvest (BVT), Mr Price (MPC) and the JSE (JSE) along with the underweight position in Steinhoff (SNH). The Stable Dividend Index seeks to gain exposure to stocks that have increased and maintained dividends over the recent past while avoiding certain yield traps.

Quality: The low beta, quality character of the factor helped finish off the second quarter strongly while exposure to mid-cap stocks assisted in starting the quarter off strong. Despite a difficult May wherein the role that Naspers plays in our concentrated market was hard to ignore, given that no Naspers exposure is held, the quality factor finished ahead of the market over the quarter. The factor performed extremely well in June negotiating the downside really well and investors who wanted to keep exposure to the equity risk premium during an uncertain time retreated to ‘quality’ counters.

At the semi-annual index review in June the S&P Quality index basket increased the stock count from 21 to 26: * Additions to the index included Astral (ARL), City Lodge Hotels (CLH), Capitec (CPI), Holdsports (HSP), Lewis (LEW), Mediclinic (MEI), Merafe (MRF), Pan African Resources (PAN), Reunert (RLO), Sanlam (SLM) and Santam (SNT). * Deletions from the index included Kumba Iron Ore (KIO), Liberty (LBH), Life Healthcare (LHC), Momentum (MMI) and Oceana (OCE).

The underweight position in Naspers and overweight position in Brait (BAT) were the largest performance detractors while overweight positions in Mr Price (MPC), Clicks (CLS), Pioneer Food Group (PFG) and Vodacom (VOD) were the largest relative performance contributors. The index and portfolio remain focused in its extraction of Quality and should markets give way to further risk aversion, the defensive character of the basket should prove rewarding.

While the capital markets have provided a less than pleasant experience in the riskier asset classes in the recent short term (year), we remain convinced of the medium- to long-term investment strategy of having measured strategic exposure to all the necessary asset classes for the purpose of diversification.

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