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We believe that the benchmark choice and resulting returns form the most important elements of an equity strategy - by investing in a passive vehicle the returns to investment strategies are known. By applying a full replication strategy there is no risk of deviation from the chosen benchmark.
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.
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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.
Retail Class (%)
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. This fund is also available via certain LISPS (Linked Investment Service
Providers), which levy their own fees.
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 from 01 October 2016 to 30 September 2017. 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
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, the third quarter saw increased political uncertainty amid rising tensions
between the US and North Korea and the ongoing failure of the Trump
administration to implement its policy goals. These tensions were a key factor
behind the temporary rotation into lower-risk assets in August. In the wake of
hurricanes Harvey and Irma, economic data and activity indicators deteriorated
towards the period end. However, capital markets discounted the potential negative
impact on growth as minimal, as did the US Federal Reserve (Fed) in its statement
following the latest Federal Open Market Committee meeting. At this meeting, the
Fed kept interest rates steady but confirmed that measures to reduce its balance
sheet would begin in October, despite persistently weak inflation.
In the Eurozone region, economic data remained robust over the prior three months.
GDP growth was confirmed at 0.6% in the second quarter, up from 0.5% in the first
quarter. Economic sentiment rose to its highest level since July 2007, while
unemployment in the Eurozone remained at 9.1% in August, which was stable
compared to July, and the lowest rate since February 2009. The possibility that the
European Central Bank could reduce its stimulus measures continued to be a focus
for the market, as the committee kept policy rates unchanged in September. Also
noteworthy was Angela Merkel winning a fourth term as the Chancellor of Germany
in September. For the UK, the economy showed clear signs of slowing down, while
inflation picked up, reaching 2.9% in August. During the quarter the Bank of England
struck a more hawkish note with Governor Carney and a number of members of the
Monetary Policy Committee openly discussing rate rises.
Emerging markets saw a positive economic backdrop of steady global growth,
modest inflation, US dollar weakness and a continued momentum in the Chinese
economy through a pickup in commodity prices. In China, Industrial profits rose 20%
year-on-year in August vs. 16.5% year-on-year in July, driven by a rebound in
industrial prices. In South Africa, the South African Reserve Bank (SARB) lowered
the repo rate by 25 basis points in July, yet surprised markets by keeping the policy
rate steady at 6.75% in September. GDP growth momentum recovered in the
second quarter to lift by 2.5% %q/q saar after a brief technical recession in the first
Global equity markets advanced in the third quarter with the MSCI World Index
returning 5.0% in US dollars, and 16.5% year to date (YTD). This advance was
largely driven by stable economic growth, benign inflation and positive earnings
releases. Emerging market equities however outperformed their developed world
counterparts, returning 8.0% during the third quarter and 28.1% YTD, in dollars. This
streak of outperformance ended in September after eight months of positive relative
performance. Top performers in emerging markets in the third quarter were Brazil
(+23%), Russia (+18%) and Chile (+17%), while Pakistan (-16%), Greece (-12%)
and Qatar (-7%) were the laggards. Brazil saw some reform progress and central
bank easing, while Russian equities rallied as crude prices picked up and lower
inflation opened the door for further interest rate cuts. In contrast, Pakistan’s market
was weighed by their Supreme Court’s disqualification of the prime minister, while
Greece declined amid a sell-off in banking stocks.
Year to date, South African equities (Swix) delivered a healthy 10.6%,
underperforming bonds (+4.0%) and cash (+3.7%) as commodity prices rallied and rate expectations buoyed equity markets during the third quarter. Over the quarter,
the Swix returned 7.0%, driven by Materials (+17.8%), while Industrials (+7.4%) and
Financials (+5.1%) also rallied. Within Industrials, Naspers (15.0%) continued to
outperform on the back of a strong performance in Tencent. Interest rate-sensitive
sectors such as Retail and Banks also bounced early in the third quarter, around the
first rate cut in July, although the SARB surprised markets in September by keeping
the policy rate steady at 6.75%. MTN (+11.2%) also drove the equity market as
MTN’s new management conveyed its aspirational growth potential, while Aspen
(+5.7%) rallied after announcing the AstraZeneca (AZN) deal.
Value measures have experienced a poor 2017 thus far, after a fantastic
performance during the 2016 calendar year, both domestically and globally. The
yield factor specifically has struggled to get out of the blocks despite the continuing
high levels of economic and policy uncertainty typically being a fertile environment
for this factor. To this end, it appears that the Value style turnaround has somewhat
stalled in line with protracted domestic economic recovery.
In line with attractive relative dividend yields in the Resource sector, this portfolio
strategy is positioned with a meaningful overweight in this sector relative to the
Swix. A strong relief rally in commodity prices during the third quarter - where
industrial metals recorded a robust return as economic momentum in China
remained firm, and iron ore was up 14.9% - assisted the strategy with positive
contributions from Resource counters in the third quarter. However, YTD overall
stock selection based on dividend yield has not produced consistent
During the third quarter, exposure to South32 (S32) and African Rainbow Minerals
(ARI) played a strong positive role here, while an underweight exposure in Steinhoff
(SNH) also added. The concentrated nature of our market index proxies and its
Naspers exposure also largely contributed to the relative underperformance; this
index holds no Naspers exposure. Holdings in Liberty Holdings (LBH), Telkom
(TKG) and Life Healthcare (LHC) detracted from the index’s relative performance.
Additions to the FTSE/JSE Dividend Plus Index during the prior quarter included
Anglo America (AGL) and Kumba Iron Ore (KIO), while deletions included Old
Mutual (OML) and Santam (SNT).