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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.

Quick Facts About The Fund

Satrix Balanced Index Fund

Launch Date: October 2013
Fund Size: R1 428.6 million
Benchmark: Proprietary Satrix Balanced Index
Time Horizon: 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): 0.76%
Launch Date: October 2013
Fund Size: R1 428.6 million
Benchmark: Proprietary Satrix Balanced Index
Time Horizon: 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): 0.76%

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 Apr 2017 on a rolling monthly basis
Retail Class Fund (%) Benchmark (%)
1 year 2.44 3.69
3 year 6.86 8.19
5 year N/A N/A
Since inception 7.54 8.87

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 % 15.99
Lowest Annual % 2.44

Minimum Disclosure Document (Fund Fact Sheet)

Performance Fees FAQ

Illustrative Annualised Investment Performance

Satrix Balanced Index Fund A1
Proprietary Satrix Balanced Index

Source of graph : Morningstar

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 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 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- 5.52%
2. FirstRand / RMBH 3.27%
3. Sanlam 2.49%
4. Steinhoff Int Hldgs N.v 2.32%
5. Capitec 2.01%
6. BTI Group 1.98%
7. Stanbank 1.91%
8. Bidvest 1.78%
9. Kumba 1.65%
10. Truworths 1.62%
Cash And Money Market Assets
Inflation Linked Bonds
International Assets
Equities
Property
Bonds
1. Naspers -N- 5.52%
2. FirstRand / RMBH 3.27%
3. Sanlam 2.49%
4. Steinhoff Int Hldgs N.v 2.32%
5. Capitec 2.01%
6. BTI Group 1.98%
7. Stanbank 1.91%
8. Bidvest 1.78%
9. Kumba 1.65%
10. Truworths 1.62%

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 – Individual Investors Download PDF
Unit Trust Tax-Free Application Form Download PDF
Unit Trust Application Form - Non-Individual Investors Download PDF
Unit Trust Additional Investment Form Download PDF
Unit Trust Switching Form Download PDF
Unit Trust Investor Details Update Form Download PDF

View additional forms

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)

A1-Class (%)

Advice initial fee (max.) N/A
Manager initial fee N/A
Advice annual fee (max.) 1.14
Manager annual fee 0.69
Total Expense Ratio (TER) 0.76
Transaction Cost (TC) 0.30

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 1 year. The TER is calculated since inception for 1 October 2015 to 30 September 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 1 year on an annualised basis.

When you invest online

Traditionally, investment advice come with a fee of up to 1.14%. But our smart online system is working to make investing cheaper and more profitable for you and hence no initial or annual advice fees will be charged. 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 2.28%.
  • 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: 1.14%

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.

Visit the Satrix website for more information

Market review | Global and Local Capital Markets

Year to date Asia and Latin America have been the best-performing equity markets. Looking at the global leaderboard for Q1 2017, 33 out of 39 assets actually ended the quarter with a positive total return. Silver (+15%) led the way but the dominant theme was the strong performance from equities with the Spanish IBEX (+14%), Emerging Market (EM) equities (+12%), Brazil’s Bovespa (+12%) and Hong Kong’s Hang Seng (+10%) all performing well, but it’s also been a strong quarter for developed market (DM) equities with the Europe Stoxx 600 returning 8% and the S&P 500 6%.

After the first three months of the year, on a normalisation in investor sentiment (in Q1 2017 the VIX Index had its lowest average quarter since Q4 2006), the general call for the second quarter is to remain overweight equities and underweight bonds/cash. This reflects the view that real rates are in a bubble and there's risk of a significant re-pricing in the medium term as the rate hike cycle gathers steam. The Trump run may have a bit more to go. By avoiding a drawn-out battle over the Health Care Bill, investors' focus has shifted to tax reform and as this takes centre stage, stimulus-fuelled optimism could wane as friction around funding the Tax Bill rears its head. Stocks have been boosted by accelerating global growth and improving confidence. But the risk today is that, just as the Trump run may begin to fade, data could grow choppier. With positive economic surprises at five-year highs, the math alone makes it difficult for data to accelerate from here. With the French elections, Turkish referendum, OPEC, and Brexit all on the calendar at a time when global central banks are transitioning to a tightening bias, we see a chance that the markets might take a breather at some time this year.

As anticipated, S&P eliminated South Africa's foreign currency sovereign investment-grade (IG) rating, downgrading to BB+ from BBB- with a negative outlook. The MSCI SA Index (-0.1%) underperformed the MSCI EM Index (+2.5%) in March in dollars, as the rand (+2.6%) was the worst-performing EM currency, on the back of a Cabinet reshuffle, with Finance Minister Gordhan removed.

The FTSE/JSE All Share Index (ALSI) managed to deliver a good return of 3.8% over the last three months, with the best-performing sectors being Consumer Discretionary, which was driven by the very good returns of Richemont, British American Tobacco and Naspers. In the Basic Materials sector Coal Mining and Forestry and Paper experienced a very good quarter. Laggards were Healthcare (-7%), heavily influenced by Netcare (-18%), and Banks (-6%), which were down on a weaker rand, weighing on the inflation outlook and consumer confidence. The worst-performing sector was Industrial Engineering, down a massive 15%.

The FTSE/JSE Shareholder Weighted All Share Index (SWIX) managed a total return of 3.3%, which was slightly worse than that of the ALSI, mainly driven by the higher weighting of resource companies in the latter.

The year ahead

For many of our clients, the question is why does a downgrade matter? There is an obvious risk that, in order to balance the books, taxes will rise, import tariffs will increase the cost of living and higher interest rates will discourage private sector investment and job creation. The key concern remains our local currency debt junk rating, which could make it more expensive to meet our fiscal commitments in the long term. The Cabinet changes have had a significant impact on financial markets to date. South Africa relies on foreign capital flows to fund its deficits, and with increasingly likely downgrades of its sovereign debt looming, further sharp declines in the rand is possible. The importance of the loss of independence of an institution like the Treasury is not something that should be underestimated.

While SA domestic equities might appear close to the bottom, failure to deliver on a turnaround in confidence in the political landscape could see the likelihood of a further near-term sell-off (with a vote of no confidence unlikely until early May), therefore we think that domestic equities such as Banks and Retail should offer better entry opportunities in the weeks to come. On the upside one could see some further outperformance of some industrial rand hedges, on the back of a further weakening in the currency.

We believe SA bonds are most threatened by unfolding political developments, as there is no place to hide, unlike SA equities where shelter can be taken in ‘safe-haven’ stocks. SA bonds could face headwinds from foreign unwinding of local currency bond positions (foreigners comprise more than a third of SA local currency bonds) on the threat of further credit rating downgrades and fiscal expedience creeping in under a mantra of the need for ‘radical economic transformation’ of the economy. On the back of all this negative news flow SA listed property stocks have had a very subdued reaction relative to the bond market. Historically the performance of listed property shares tracked that of the bond market, but that correlation has started to wane partly because of the local listed companies’ increased offshore exposures. Will they feel the brunt in the weeks to come?

Momentum

Price momentum and earnings revision factors have been sternly tested in 2016. This last calendar year has brought with it extraordinarily high levels of economic and policy uncertainty on both the domestic and international stages, keeping us pensive. The first quarter of 2017 has not failed to disappoint in contributing to the uncertain outlook. On the international stage the price and earnings revision factors have also been among the poorer performers. There has, though, been a continuing recovery in the factor during this first quarter of 2017, mainly driven by the earnings revision factor while price momentum was more muted. Given that most of the stocks enjoying the highest earnings revision characters are hard commodities, the higher beta nature of these counters will likely influence the portfolio’s factors over the coming months. In spite of this the portfolio weathered the uncertainty of the first quarter rather well, posting a positive relative performance above the market benchmark (SWIX).

Once again stock selection within the resource sector was the primary driver of positive relative performance over this quarter. Industrials were benign in effect while Financials were slightly negative. Stocks that detracted most were Bidvest (BVT), FirstRand (FSR) and Spar (SPP). In the Resources sector the overweight position in Kumba Iron Ore (KIO) added most. British American Tobacco (BTI) and Exxaro (EXX) also lent steady support contributing to the positive result. 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 two shares (Blue Label Telecom: BLU and JSE Ltd: JSE) being removed. Glencore (GLN) and Barloworld (BAW) have been additions over the quarter while exposures in Mediclinic (MEI), Steinhoff (SNH) and Anglo American (AGL) have been reduced. Underweights in MTN Group Ltd (MTN) and Sasol (SOL) were narrowed to keep tracking error limits within bounds. The biggest fundamental change in the portfolio’s positioning over the course of 2016 has been the rotation into the hard commodity stocks whose price and earnings revision signals remain strongest in our domestic universe. Stable Dividend: Dividend yield and other cash flow related measures of value had a strong 2016 along with deeper extractions of value like price to book. The yield factor struggled to get out of the blocks in 2017 but still kept tread with the market. On an absolute basis the value family of factors provided a solid start taking inflation into account. Exposure to Truworths (TRU) and Richemont (CFR) played a strong role here. The concentrated nature of our market index proxies and its Naspers exposure were pretty much behind the relative under performance; this index holds no Naspers exposure. Our Satrix Stable Dividend Index had its review in March. A summary of the major additions and deletions are below:

Additions: Exxaro (EXX), Steinhoff (SNH), Spar (SPP), Tsogo Sun (TSH)
Deletions: AVI (AVI), MTN (MTN), Foschini (TFG)

As long as the extraordinarily uncertain market environment persists this factor is likely to provide investors with the necessary defensive character inside their portfolios. Quality: The S&P Quality Index had a topsy-turvy start to the year as risk-on and risk-off environments changed hands quite regularly with the last week of the quarter proving decisive. Having run ahead of the market leading into the last week of the quarter the final week’s underperformance resulted in a negative quarter relative to the market (SWIX). In spite of this, its diversification benefits have been of significant value within this factor portfolio. As with our Dividend Yield (Value) factor, the largest relative underperformance came from the underweight position in Naspers (NPN) while overweight positions in Kumba Iron Ore (KIO), Capitec (CPI) and Sanlam (SLM) helped offset the performance relative to the market (SWIX). The low beta character of this index was challenged given that high beta resource (earnings revision) ideas rerated and featured strongly this quarter. There were no changes to the S&P Index over the past quarter.

The index and portfolio remain focussed in its extraction of Quality and should markets give way to further risk aversion, the defensive character of the basket should prove rewarding.

In Closing

We remain convinced of all equity factors’ medium- to long-term significance and the premium they offer in the South African capital market and remain disciplined in our implementation and extraction of all factors.

The outlook for markets is again uncertain. The global backdrop is one of improvement on the margin, which all else being equal should benefit SA assets and the currency. Relative to this support, the risk of additional downgrades to SA’s credit ratings will now cast a new shadow over SA assets.

Should a ‘sanity prevails’ event occur in the near future, the impact of that on SA bonds and the currency could be material. But in the absence thereof, investors will be faced with the impossible question of whether local assets are priced cheaply enough to reward investments in them despite the additional downgrade risk that President Zuma’s actions have brought. While the capital markets 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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