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.
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.
*As at 30 April 2018
The composite benchmark of the fund comprises the following asset class building blocks:
Asset class Index exposures
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
Minimum Disclosure Document (Fund Fact Sheet)
Cumulative Growth Over Time
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.
View more Satrix forms
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.
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
Total Expense Ratio (TER) | The 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 1 year. The TER is calculated since inception from
01 April 2017 to 31 March 2018. 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 1 year. Obtain the costs of an investment prior to investing by using the EAC calculator provided at www.satrix.co.za.
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.
In the US, equities began 2018 strongly, buoyed by ongoing strength in economic
data, robust earnings and the confirmation of a major tax reform package. US
business confidence reached an unexpected, multi-decade high in March, while
GDP for Q4 2017 was revised upwards to show growth of 2.9%. The latter part of
the quarter, however, saw a marked increase in volatility as investors first digested
the destabilising potential of an elevated US inflation reading and the possibility that
the Fed may need to become more proactive in raising interest rates, as well as
escalating US-China trade sanctions, which precipitated a renewed bout of
turbulence in March.
In the Eurozone, the economic backdrop remained encouraging over the three
months. GDP growth for Q4 2017 was confirmed at 0.6% quarter-on-quarter.
Unemployment was stable at 8.6% in January 2018. However, forward-looking
surveys painted a picture of slower future growth. The composite PMI hit a 14-month
low in March, albeit the reading of 55.3 still implies solid growth. European Central
Bank chairman Mario Draghi reiterated that interest rates would not rise until well
past the end of the quantitative easing programme. On the political front, the key
event of the quarter was Italy’s election, which yielded no overall winner. Germany
formed a new government after its inconclusive elections in September 2017.
Angela Merkel remains as chancellor after her centre-right CDU/CSU agreed
another grand coalition with the centre-left SPD.
Emerging markets saw positive returns in the first quarter despite a rise in market
volatility stemming from tensions over global trade. Brazil’s former president Luiz
Inácio Lula da Silva saw his criminal conviction upheld, while in Russia the central
bank cut interest rates and the country’s debt was upgraded to investment grade by
ratings agency S&P. In China, macroeconomic data remained broadly stable, albeit
there were ongoing signs of a gradual slowing in momentum, with official PMI
easing to 50.3. By contrast, there was concern in India over reported fraud at a state
Global equity markets declined in Q1 2018 with investors unnerved first by concerns
about the path of US interest rate rises and then worries over trade. US equities
began the year strongly, boosted by tax reforms, but ended the quarter lower amid
concerns over inflation and the impact of US-China trade sanctions. Following a
10% correction from its January highs and rallying back 8% by early March, the S&P
500 Index suffered another 5% pullback in the last few weeks, ending the month of
March down 2.5% and losing 0.8% over the last three months, which was the first
negative quarter since the third quarter of 2015. Eurozone equities posted negative
returns as worries over US rates and trade affected other markets. Italy’s election
was inconclusive but had limited impact on the equity market.
Emerging market (EM) equities outperformed, delivering a positive return in US
dollars. The MSCI EM Index was up +1.5% (total returns) in Q1 2018, ahead of the
MSCI World (Developed Market) Index, which was down 1.2%, the first quarterly
loss in two years. Over the last three months the FTSE/JSE All Share Index (ALSI)
posted a total return of -6.0%. This has been its worst quarterly performance in eight
years (Q2 2010: -8.2%). SA Industrials were the worst performer, returning -8.0%
(Naspers and Tiger Brands were both down 12%). SA Resources lost 3.8% (rising
global uncertainty) and SA Financials lost 3.6%.
Of the equity sectors, the top first-quarter performance came from Non-life
Insurance (+24.4%), Fixed Line Telecoms (+10.0%) and General Retailers (+9.2%).
The worst performance came from Real Estate Development and Services (-31.2%),
Software (-30.5%) and Household Goods (-29.0%).
US Treasury yields rose markedly across the curve over the quarter as expectations
of growth, inflation and interest rates shifted higher. Volatility returned to markets,
picking up sharply from low levels and impacting risk assets. In March, sentiment
was negatively impacted by rising trade tensions between the US and China. Tenyear
yields increased from 2.41% to 2.74%, reaching a high of 2.95% in February,
five-year yields increased from 2.21% to 2.56% and two-year yields from 1.88% to
The Bloomberg Commodities Index posted a modest negative return in Q1 2018.
This was attributable to weakness from industrial metals amid rising global trade
tensions and concern that further escalation could impact demand. Copper was
particularly weak, down 8.3%. Conversely, the energy and agricultural components
recorded solid gains. In agriculture, corn (+10.6%) and soy bean (+9.8%) prices
were notably strong. In the energy segment, Brent crude (+5.1%) rallied into quarter
-end amid rising confidence that Opec would maintain its production cuts through
the full year 2018. In precious metals, gold (+1%) posted a positive return but silver
(-5.1%) lost value.
EM local currency bonds largely ignored the increase in developed market (DM)
yields because the dollar was weakening and global growth projections were being
revised higher. Stronger EM currencies also led to lower inflation in EM economies.
South African bonds outperformed their EM counterparts as political risks waned
and the rand strengthened more than other currencies. The FTSE/JSE All Bond
Index (ALBI) returned 8.06% in Q1 2018 and the benchmark R186 yield fell to
7.99% from 8.64%.
The FTSE/JSE SA Listed Property Index (SAPY) delivered a total return of -19.6%
during the three months to the end of March 2018, mainly due to company-specific
concerns. Relative to other asset classes, the property index materially
underperformed equities (ALSI: -6.0%; cash: 1.8%; bonds: 8.1%) over this period.
On a rolling 12-month basis, the sector’s total return is -7.1% due to the negative
first quarter of 2018.
Momentum: Globally, cyclical sectors performed more strongly in January and
February, when the market was focused on faster rate hikes, while in March the
broader decline in risk appetites saw more defensive areas outperform. From a style
perspective, this was consistent with the global Momentum and Growth factors’
correction during March, as rotation and perhaps profit-taking have dragged on a
generally positive Momentum factor during 2018, primarily driven by perceived
increased risk to global growth.
In South Africa, there was large consistency with global outcomes, as back-endloaded
cyclical pressure over the quarter dampened an otherwise strong Momentum
signal. Earnings Revisions (a sub-component of Headline Momentum), on the other
hand, once again has not performed in line with Price Momentum, generating
negative returns as poor earnings sentiment failed to deliver in an environment with
high levels of corporate uncertainty.
As an overall factor however, the Momentum strategy struggled during Q1 2018
relative to the FTSE/JSE Shareholder Weighted Index (Swix). The strategy’s
performance was attributed on the positive side to exposure to its off-benchmark
underweight positions in property stocks, including Resilient (RES), NEPI
Rockcastle (NRP) and Fortress (FFB), while overweight positions in Standard Bank
(SBK) and Barloworld (BAW) aided the strategy. On the negative side, cyclical
exposure to Northam Platinum (NHM), African Rainbow Minerals (ARI), Kumba Iron
Ore (KIO), Exxaro (EXX) and Assore (ASR) weighed on the strategy, while
speculation around Capitec (CPI) fundamentals also contributed negatively.
At the last rebalance date (mid-March), we transitioned the portfolio based on the
evaluation of new factor signals and the risk levels in the portfolio. Based on these
signals, Exxaro (EXX), Reinet (RNI) and Impala Platinum (IMP) were removed, and
Harmony (HAR) and The Foschini Group (TFG) were added. Exposures in British
American Tobacco (BTI) and African Rainbow Minerals (ARI) have also been
reduced while exposures to Mr Price (MRP) and JSE (JSE) were added in line with
the risk objective of the fund.
We remain convinced of the 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.
This monthly Minimum Disclosure Document should be viewed in conjunction with the Glossary Terms Sheet.
Issue Date: 25 Apr 2018
implementation and extraction of the factor.
Quality: After a stellar 2017, the S&P Quality South Africa Index experienced
another strong quarter as investors continue to favour stocks with defensive
characteristics. Despite largely pro-cyclical domestic sentiment (e.g. leadership
optimism, declining risk of credit rating downgrade, improving inflation outlook),
global macro concerns have instead dominated mindshare and subsequently
weighed on the local share market.
This environment continued to suit companies with strong balance sheets, clean
earnings and high return to equity, as represented in our Quality basket.
Furthermore, based on our analysis, the valuation gap between Quality and the
market is still not pricing in the substantial historic premiums of a Quality strategy,
and thus still presents value to investors who seek the strategy’s diversification
benefits within this factor portfolio construct.
In terms of stock selection, the largest relative outperformance over the quarter
came from the overweight positions such as Mr Price (MRP), Truworths (TRU),
Standard Bank (SBK) and Clicks (CLS), as well as underweight positions such as
Naspers (NPN), Resilient (RES) and NEPI Rockcastle (NRP). By not holding these
stocks, the fund accreted substantial value relative to the Swix. On the other hand,
the largest two detractors in Value came from overweight positions in Capitec (CPI)
and Tiger Brands (TBS), as a speculative report from Viceroy and an outbreak of
listeriosis respectively weighed on these counters. Other overweight detractors
included Exxaro (EXX) and Kumba Iron Ore (KIO). There were no constituent
changes to the S&P Quality South Africa Index over the prior quarter, as this index
rebalances in June and December each year.
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 not meaningfully compromising returns during up
Stable Dividend: After a fantastic performance during the 2016 calendar year,
Value measures have experienced a disparate 2017 and start to 2018. The
divergence between deep value measures (e.g. price-to-book) and yield measures
(e.g. dividend yield) has been substantial, with the former struggling, and the latter
continuing to perform well as investors seek defensive qualities during a period of
high levels of uncertainty and flight to safety.
The impact of the news in December regarding the accounting irregularity at
Steinhoff still has investors on edge, with further speculation surrounding Capitec
and technology shares continuing to weigh on market sentiment. Further to these
stock-specific issues, global forward macro momentum has slowed, which has
largely favoured defensive shares with high dividend yields, in particular domesticorientated
shares, of which the Stable Dividend strategy has significant exposure to.
During Q1 2018, overweight exposure to Foschini (TFG), Mr Price (MRP), Truworths
(TRU), AECI (AFE) and JSE played a strong positive role here, while an
underweight position in Naspers (NPN) also added excess return. Holdings in
Exxaro (EXX) and African Rainbow Minerals (ARI) detracted from the index’s
There were many changes to the Satrix Stable Dividend strategy during the prior
quarter, including 13 counters coming into the index, and 10 counters leaving the
Volatility has once again become the dominant factor in financial markets globally,
exemplified by the VIX fear index experiencing its biggest daily spike in history
during the quarter. 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
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 are unrealistic.