Typically this fund will hold a large weighting in JSE shares with a maximum equity
exposure of 75%. Capital exposure will also include investments in money market
instruments, bonds, listed property and up to 25% in offshore assets. Fund risk is
lower than that of a pure equity fund. This portfolio may also invest in participatory
interests of underlying unit trust portfolios.
Illustrative Annualised Investment Performance
Minimum Disclosure Document (Fund Fact Sheet)
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
Head of Equity - Sanlam Investment Management
Chartered Accountant, Patrice has a BSc (Econ) in Monetary Economics with first class honours and an MSc (Econ), both from the London School of Economics. He also has an MBA with distinction from Manchester Business School, which he completed in 2003.
Initially, he worked at PricewaterhouseCoopers in London and Johannesburg, then moved to Old Mutual Asset Managers where he won the Raging Bull and S&P award for top performance in 2004. Now, he is treasurer of the Association of Black Securities Professionals (ABSP) in the Western Cape and Head of Equity at Sanlam Investment Management. He managed the SIM Top Choice unit trust from the end of 2006 and in 2007 was promoted to voting member of the Model Portfolio Group, where he has a direct impact on the core house view equity portfolio.
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.
The portfolio manager may borrow up to 10% of the market value of the portfolio to bridge
insufficient liquidity. Fluctuations or movements in exchange rates may cause the value of
underlying international investments to go up or down. This fund is also available via certain
LISPS (Linked Investment Service Providers), which levy their own fees.
Sanlam Reality members may qualify for a discount on the Manager annual fee.
Total Expense Ratio (TER) | PERIOD: 1 April 2013 to 31 March 2016
Total Expense Ratio (TER) | 1.58% of the value of the Financial Product was incurred as
expenses relating to the administration of the Financial Product. A higher TER does not
necessarily imply a poor return, nor does a low TER imply a good return. The current TER may not
necessarily be an accurate indication of future TER’s. Inclusive of the TER of 1.58%, a
performance fee of 0.20% of the net asset value of the class of participatory interest of the
portfolio was recovered.
Transaction Cost (TC) | 0.14% of the value of the Financial Product was incurred as costs relating
to the buying and selling of the assets underlying the Financial Product. Transaction Costs are a
necessary cost in administering the Financial Product and impacts Financial Product returns. It
should not be considered in isolation as returns may be impacted by many other factors over time
including market returns, the type of Financial Product, the investment decisions of the investment manager and the TER.
Total Investment Charges (TER + TC) | 1.72% of the value of the Financial Product was incurred
as costs relating to the investment of the Financial Product.
Manager annual fee | Performance Fees: Minimum fee: 1.25% p.a. (incl. VAT), maximum fee:
2.85% (incl. VAT) and sharing rate: 20%. Performance fees will only be charged once the
performance benchmark is outperformed, irrespective of whether the fund performance is positive
or negative. If the fund performs in line with or below the benchmark, then the minimum fee of
1.25% p.a. (incl. VAT) is charged. The performance fee is accrued daily, based on daily
performance and paid to the manager monthly
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
SO YOU’RE ONLY CHARGED THE RELEVANT FUND-MANAGEMENT FEE
Sanlam Investment Management (SIM) is the local active asset management house within Sanlam Investments. When choosing a fund managed by us, you have on your side one of SA’s largest and most reputable, risk conscious investment teams, consistently meeting or exceeding our benchmarks. Sanlam Collective Investments has appointed SIM as the asset manager for its unit trust funds, catering for the full spectrum of risk profiles.
The second quarter of 2016 was not short of surprises.
In South Africa, the quarter kicked off with the President unexpectedly addressing
the nation to apologise for his handling of the Nkandla ruling by the Public Protector.
A month later the Minister of Finance released a media statement to address the
rumours that his arrest was imminent. Unemployment edged to 26.7%, the highest
since 2008, and SA business confidence fell to a new all-time low, hurt by poor
performances in sectors such as manufacturing and retail. Still, SA narrowly avoided
a downgrade to junk status by Standard & Poor's, but the agency maintained its
negative outlook. Days later data showed that SA GDP contracted by an annualised
1.2% in the first quarter of 2016, keeping the country tip-toeing in front of ratings
Internationally, the biggest surprise was British voters’ decision - with a 52% majority
- to leave the European Union and Cameron simultaneously leaving his post at 10
Downing Street. This immediately created a knee-jerk sell-off in international
markets. Germany’s highest court decided an ECB scheme to buy troubled states’
bonds in secondary markets is constitutional, causing 30-year German bond rates to
fall to their lowest level on record. In the Middle East, Saudi Arabia appointed a new
Energy Minister to stabilise its oil policies and Brent crude broke through the
$50/barrel mark for the first time this year. (The oil price remains an important
indicator of the strength of the global economy.) And in the US, in the absence of
signals that the US economy is heating up, the Federal Reserve indicated that it’s
keeping rates steady for now.
Market returns were predominantly positive for the quarter. The FTSE/JSE All Share
Index gained 0.45% on a total return basis. Disguising much volatility during the
quarter, the rand ended the 3-month period only 0.3% stronger against the dollar,
but 8.1% stronger against the pound sterling, boosted by the Brexit vote. The All
Bond Index (ALBI) returned 4.4% this quarter. Cash returned 1.78%. On the global
front, the MSCI World Index and MSCI Emerging Markets Index posted 1.2% and
0.8% respectively for the quarter on a total return basis (USD).
Source: Statistics SA, Deutsche Bank | Three-month total returns up to 30 June
The rating agencies have recently confirmed South Africa’s investment grade rating.
Their ratings are a reflection of the ability of the country to service its foreign debt.
Even so, the yield difference (spread) between the South African 10-year USD
sovereign bonds and the USA 10-year sovereign bond is still at about 3%, which is
0.5% higher than where it traded on average in 2014 and 2015, before the surprise
dismissal of the Minister of Finance by the President in December 2015. This 3%
spread is also high relative to other investment grade countries and is a reflection of
the increased sovereign risk premium attached to South Africa by foreign investors,
despite the views of the rating agencies.
When we make asset allocation decisions we consider the real return on offer from
assets relative to their own long-run historical real returns. In addition to this we
have to overlay the medium-term macro-economic framework and make suitable adjustments.
For example, the world is currently still recovering from the 2008
financial crises and the developed world’s central banks have all engaged in
We similarly consider the real returns available from South African assets relative to
their own history. However, it is also useful to view these real returns relative to
assets in similar commodity based emerging markets. With several of these
countries, such as Brazil and Russia, there are similar concerns with regards to the
political stability in the countries.
We retained our underweight position in South African equities. Even though South
African equities are fairly priced using a bottom-up valuation of the individual
companies, we do continue to prefer global developed market equities ahead of
local equities. South African equities continue to trade at a substantial premium to
other emerging markets on both a price-to-earnings and a price-to-book basis.
We increased our overweight position in South African bonds in January when the
10-year bond yield traded at 9.6%. South African long bonds were and are still
offering among the highest local currency real yields in emerging markets.
Since January this year our long bonds have rallied, with the 10-year yield dropping
to 8.85% on 23 June and we therefore reduced the size of our overweight position.
This move was also partly motivated by a decision to reduce risk in the portfolio in
light of the upcoming Brexit vote.
At current yields and a 3% to 6% inflation target the real yield on offer, relative to
other asset classes, remains attractive. This is true especially in the light of global
developed market 10-year sovereign bond yields, which are currently at record low
We retain our overweight position in inflation-linked bonds, which we implemented
immediately after the dismissal of the Minister of Finance in December 2015. Tenyear
inflation-linked bonds then traded at real yields of 2.3%. We consider the
default risk on inflation-linked bonds to be low as the government is in control of the
rand printing presses. These bonds have now strengthened to 1.75%, but they still
trade above our current long-run assumption of fair value, which is 1.5%.
Local listed property
We retained our neutral holding in listed property. We prefer international listed
property companies, which we believe are cheaper.
Even though the rand has recovered from its weakest levels it remains one of the
weakest emerging market currencies relative to purchasing power parity. The rand
remains more than two standard deviations cheap against the USD and one
standard deviation cheap versus the GBP and EUR. We believe that purchasing
power parity holds over the long run. This has been the case for the rand in
2001/2002 and 2008 when it was cheap versus developed market currencies. In
both cases the rand recovered to purchasing power parity.
For this reason our portfolios retained their underweight position with respect to their
total offshore exposure.
We retained an overweight position in global equities. We are of the opinion that, on
a relative basis, global equities remains an attractive asset class and has become
even more attractive after Brexit. The dividend yield of developed market equities is
at 2.8%. This is higher than the average dividend yield of the past thirty years. Only
in 2008 were dividend yields substantially higher than current levels.
We have preferred Europe and the UK equity markets to the rest of the developed
world as the European companies traded at a lower price-to-book valuation and
higher dividend yields than most other developed markets. We believe these
markets have fallen considerably more than warranted given the issues surrounding
Brexit. We therefore retain this overweight.