Skip Ribbon Commands
Skip to main content

Skip Navigation Linkssatrixbalancedindex Satrix Balanced Index Fund

The information on the Adviser and Institutional areas of this site have been tailored for investment professionals. Appropriate product, fund and service information for private investors can be accessed on the Personal area of our site. Terms & conditions.

continue
Do not show this again.

Contact

Call me back

Advice

Back

Email us

Skip Navigation LinksCore Funds

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. For more information contact your financial adviser or broker.

Fund Summary*

Satrix Balanced Index Fund

Launch Date: October 2013
Fund Size: R3 576 million
Benchmark: Proprietary Satrix Balanced Index
Time Horizon: 8 - 9 years
*As at 30 August 2018
 
Risk Profile: Moderate Aggressive
Fund Classification: SA - Multi-Asset - High Equity
Min Investment Amount: Lump sum: R10 000 | Monthly: R500
Total Expense Ratio (TER): 0.58%
Fees: View Fees

*As at 30 August 2018

Launch Date: October 2013
Fund Size: R3 576 million
Benchmark: Proprietary Satrix Balanced Index
Time Horizon: 8 - 9 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): 0.58%
Fees: View Fees
*As at 30 August 2018

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 Cumulative Growth of an investment of R100

Performance

Annualised Total Return on a rolling monthly basis
(as at 30 August 2018)
Retail Class Fund (%) Benchmark (%)
1 year 9.58 10.38
3 year 7.65 8.75
5 year N/A N/A
Since inception 8.27 9.5

Annualised return is the weighted average compound growth rate over the period measured
Highest and Lowest Annual Returns since inception
Highest Annual % 9.58
Lowest Annual % 6.16

Fund Factsheet

Cumulative Growth Over Time

Satrix Balanced Index Fund A1
Proprietary Satrix Balanced Index

Source of graph: Morningstar Direct

This graph illustrates how an investment of R100 would have grown had you invested for the time period displayed. 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 by this graph happened in the past and is not guaranteed. The performance is calculated by taking into account initial and ongoing fund manager fees and assumes that you reinvested all the income earned by the fund over this period.

The other line on the graph is for the performance of the designated benchmark of the fund – normally either an index or other funds in the industry that are comparable to the fund you’ve chosen.

The Manager has the right to close the portfolio to new investors in order to manage it more efficiently in accordance with its mandate. The actual fund performance can be viewed on the Minimum Disclosure Document. Annualised return is the weighted average compound growth rate over the period measured.

1. Naspers -N-6.71%
2. FirstRand / RMBH3.36%
3. Sanlam2.54%
4. Capitec2.14%
5. Clicks Group Ltd2.12%
6. Stanbank2.11%
7. Mr Price Group Limited2.02%
8. AVI1.77%
9. Truworths1.54%
10. Tiger Brands1.52%
Cash And Money Market Assets
Inflation Linked Bonds
International Assets
Equities
Property
Bonds
1. Naspers -N-6.71%
2. FirstRand / RMBH3.36%
3. Sanlam2.54%
4. Capitec2.14%
5. Clicks Group Ltd2.12%
6. Stanbank2.11%
7. Mr Price Group Limited2.02%
8. AVI1.77%
9. Truworths1.54%
10. Tiger Brands1.52%

All portfolios are managed and monitored by the Satrix investment team, a group of individuals highly skilled in portfolio management, quantitative research, risk management and portfolio solutions. The Satrix team offers unparalleled experience in efficiently managing index-tracking portfolios. Under leadership of CIO Kingsley Williams and its head of Portfolio Management, Johann Hugo, the team manages index tracking assets in excess of R70 billion.

All portfolios are managed and monitored by the Satrix investment team, a group of individuals highly skilled in portfolio management, quantitative research, risk management and portfolio solutions. The Satrix team offers unparalleled experience in efficiently managing index-tracking portfolios. Under leadership of CIO Kingsley Williams and its head of Portfolio Management, Johann Hugo, the team manages index tracking assets in excess of R70 billion.

Traditional Investing (when you invest via a financial adviser or other)

A1-Class (%)

Advice initial fee (max.) N/A
Manager initial fee N/A
Advice annual fee (max.) 1.14%
Manager annual fee 0.40%
Total Expense Ratio (TER) 0.66%
Transaction Cost (TC) 0.26%

Advice fee

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

Total Expense Ratio (TER)

This is the percentage of the value of the Financial Product that 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.

Transaction Cost (TC)

This is the percentage of the value of the Financial Product that 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)

This is the percentage of the value of the Financial Product that was incurred as costs relating to the investment of the Financial Product.

For more detail please view the fund factsheet

Satrix is a South African ETF pioneer and caused a shake-up in the SA investment space when it introduced the country to ETFs in 2000 by launching the first ETF listed on the JSE. The Satrix TOP 40 ETF needs no introduction and serves as the go-to broad market exposure investment option for professional and amateur investors alike. So transformative have the Satrix product set and access options been to South Africans that people often (erroneously) refer to all index trackers as Satrix.

Since 2000 Satrix has listed 12 more ETFs. In fact, in 2017 alone it added a property ETF, an inflation-linked bond ETF, a Quality factor ETF and three offshore ETFs to its range. You can now build a completely diversified portfolio of local asset classes using only low-cost Satrix ETFs.

To make investing ever easier and cheaper (and online) we started working with the ground-breaking team at EasyEquities. The low-cost, no-minimum, online platform they had developed, which allowed fractional share trading, is perfect for our clients too. In no time at all we had our very own www.SatrixNOW.co.za platform up and running, which allows you to do everything online with no annual fees and extremely low trading costs. With SatrixNOW there really are no excuses as you can invest as little as R10.

Macro review

In the US, consumer confidence remained strong and retail sales data suggested a rebound in consumption from a softer Q1. The unemployment rate also reached an 18-year low of 3.8%, accompanied by robust wage growth. As expected, the Federal Reserve (Fed) raised the target for the federal funds rate by 0.25% and marginally increased its 2018 forecasts for growth and inflation. The positive economic data were, however, balanced by moves from the Trump administration to impose tariffs on Chinese imports and withdraw from the Iran nuclear accord.

In the Eurozone, the quarter was marked by the return of political risk. There were concerns that Italy could need fresh elections following the inconclusive outcome of the March vote, while Spain also saw a change of government, although this was largely greeted with calm by markets. German Chancellor Angela Merkel clashed with sister party the CSU over immigration policy. Economic data pointed to steady growth but at a slower pace than last year, as GDP growth for Q1 was 0.4%, down from 0.7% in Q4 2017. The European Central Bank (ECB) announced that it expects to end its quantitative easing programme in December 2018.

Emerging markets (EM) saw an escalation in global trade tensions which also contributed to risk aversion as US-China trade talks failed to deliver a sustainable agreement. Brazil experienced a truck driver strike which paralysed the economy and amplified political uncertainty. Turkey saw currency weakness which forced the central bank to implement an emergency rate hike in May. China observed concerns over growth which contributed to Yuan weakness.

Global and local market review

Global developed market equities made gains in a volatile Q2, as resilient economic and earnings data vied with an unsettling geopolitical backdrop to establish the market’s direction. The MSCI World Index posted a positive Dollar total return of 1.9% (-1.2% for Q1), outperforming the MSCI EM Index (-7.9% in Q2 vs +1.5% in Q1). In the US, equities advanced in Q2 with the S&P 500 gaining 3.4% in Dollars, with positive earnings momentum and supportive economic data ultimately outshining escalating US-China trade posturing. Eurozone equities also posted positive returns in Q2. In EMs, equities recorded a sharp fall with US Dollar strength a significant headwind. Worst performing countries were Brazil (-26.4%), Turkey (- 25.7%) and Hungary (-14.4%), while the only countries to post positive returns were Colombia (+6.8%) and Qatar (+3.5%).

The SA equity market started June on a strong note, reaching a month-to-date total return of 4.2% by 14 June before reversing this to post a loss of 1.5% by 26 June. The FTSE/JSE All Share Index recovered on the last day of trade to record a June total return of 2.8%. Large caps returned 3.8%, while mid-caps and small caps lost 2.1% and 3.3% respectively. On a sector level, SA Resources was the best performer returning a solid 19.6% (Q1: -3.8%). SA Industrials returned 4% (Q1: -8%) while SA Financials lost 6% (Q1: -3.6%).

Global bond markets suffered from bouts of volatility in Q2 due to a confluence of factors. These included a greater dispersion between accelerating US growth and a softening of economic activity elsewhere, escalating trade tensions between the US and China and the formation of a populist coalition government in Italy. US 10-year Treasury yields rose from 2.74% to 2.86%. They rose significantly in April, touching a seven-year high in mid-May, as growth and inflation expectations continued to build, before risk aversion and ‘safe haven’ buying led to a significant retracement. Bund 10-year yields fell from 0.50% to 0.30% on safe haven demand and as European data saw further softening. The Bloomberg Commodities Index posted a slightly positive return in Q2. Crude oil prices continued to rally, with President Trump’s decision to withdraw the US from the Iran nuclear accord contributing to higher prices, despite OPEC announcing plans to boost supply. The industrial metals index registered a small gain.

Momentum: Global trade uncertainties and other geopolitical risks weighed heavily on investor minds over the prior quarter. This resulted in a clear risk-off performance of global styles. While Low Risk, and in particular Low Beta, were the best performing factors, the cyclical factors such as Momentum and Growth did not completely roll over and instead only suffered from some mild rotation and profittaking. In South Africa, there was large consistency with global outcomes, where we saw factor reversals as the cyclical Price Momentum factor underperformed. What was interesting, however, was how Earnings Momentum (a sub-component of headline Momentum) and Price Momentum exhibited divergent performances over the quarter. As opposed to Price Momentum, Earnings Revisions came alive in Q2 as investors gravitated towards companies with positive earnings sentiment. This could be seen as investors viewing Earnings Revisions as a more defensive component, which is aligned to how we utilise this factor in our overall Momentum strategy.

Quality: After a stellar 2017, underlying Quality factors, in particular Return on Equity (ROE), continue to experience strong signal strength during the first half of the year as investors favour stocks with defensive characteristics. Global macro concerns continue to weigh on risk appetites, which has compelled investors to seek companies that return high profits despite macro headwinds. This defensive posturing has been present notwithstanding the largely pro-cyclical domestic sentiment, e.g. leadership optimism, declining risk of credit rating downgrade, improving inflation outlook. The conundrum, however, has been that during Q2, this signal has been overwhelmed by stock-specific, sector and Rand risk in the portfolio. These impacts have significantly outweighed the Quality premium embedded in the portfolio, as well as the valuation gap the Quality basket offers relative to history.

Stable Dividend: After two consecutive very poor quarters, deep Value factors such as Price to Book rekindled its 2016 performance where cyclical value was favoured. To some extent the unwinding of Momentum has benefited these cyclical value measures in the short term, however, should macro uncertainty continue and deepen, we may see a shift towards more defensive Value or Quality strategies. Price to Book remains the worst performing strategy over 12 months. Dividend Yield, on the other hand, has experienced mixed fortunes, as the environment tussled between flight to safety and pro-risk. Over the previous year, however, investors continued to show a preference towards yield as opposed to more deep value. The conundrum, however, has been that during Q2, this Yield signal has been overwhelmed by sector and Rand risk in the portfolio. These impacts have significantly outweighed the Value and Yield premium embedded in the portfolio. There were no changes to the Satrix Stable Dividend Index over the prior quarter.

In Closing

There are growing concerns that global businesses may be subject to new regulation and be the target of tariffs if a US-China trade war escalates. Political risk is dominating fundamentals and we now have progressed into a new era where central banks are not the backstop supporting financial markets. In South Africa, the sentiment pendulum has swung from pessimism to optimism with the new political administration driving business and consumer confidence higher with expectations of a solid economic recovery being discounted. Either way, economic mood swings tend to be exaggerated. Also, the expectation that President Ramaphosa will, in one fell swoop, reverse years of maladministration and corruption is unrealistic.

Watch Video

Index tracking funds are great for peace of mind – if you’re concerned about underperforming the market. In addition, Kingsley Williams, CIO of Satrix, argues that balanced funds are perhaps the most effective way of saving over the long term, as they give you long-term average returns that are very close to that of equity funds, but with much less volatility over the shorter term.

Find an Adviser

Advanced Search

or
or

Find your nearest BlueStar

Start now. It’s the smartest thing you’ll do today.

Start Investing

Sanlam Life Insurance is a licensed financial service provider.
Copyright © Sanlam