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Satrix Low Equity Balanced Index Fund

Humans experience the pain from a financial loss twice as acutely as the pleasure derived from a gain of the same size. That’s why investing fully in shares is perhaps not for everybody, even though it has been the outperforming asset class over the very long term.

This diversified fund are for those who are not comfortable with large fluctuations in their investment value over the short term.

Quick Facts About The Fund

Satrix Low Equity Balanced Index Fund

Launch Date: July 2014
Fund Size: R311.0 million
Benchmark: Proprietary Satrix Low Equity Balanced Index
Time Horizon: 3 years
Risk Profile: Cautious
Fund Classification: SA - Multi Asset - Low Equity
Min Investment Amount: Lump sum: R10 000 | Monthly: R500
Total Expense Ratio (TER): 0.77%
Launch Date: July 2014
Fund Size: R311.0 million
Benchmark: Proprietary Satrix Low Equity Balanced Index
Time Horizon: 3 years
Risk Profile: Cautious
Fund Classification: SA - Multi Asset - Low Equity
Min Investment Amount: Lump sum: R10 000 l Monthly: R500
Total Expense Ratio (TER): 0.77%

Fund Strategy

The composite benchmark of the fund comprises the following asset class building blocks:

Asset class Index exposures

SA equity (25%) FTSE/JSE Shareholder Weighted Index
SA bonds (20%) FTSE/JSE All Bond Index
SA property (5%) FTSE/JSE SA Listed Property Index
SA inflation-linked bonds (10%) Barclays SA Inflation-Linked Bond Index
SA cash (20%) SA Nominal Cash
International equities (10%) MSCI World Equity Index
International bonds (5%) Barclays Global Treasury Index
International cash (5%) International Cash Index (Notional)

 

Illustrative Annualised Investment Performance

Performance

Annualised as at 31 Jan 2017 on a rolling monthly basis
Retail Class Fund (%) Benchmark (%)
1 year 5.38 5.74
3 year N/A N/A
5 year N/A N/A
Since inception 6.34 6.90

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 % 5.38
Lowest Annual % 4.07

Minimum Disclosure Document (Fund Fact Sheet)

Performance Fees FAQ

Illustrative Annualised Investment Performance

Satrix Low Equity Balanced Index
Proprietary Satrix Low Equity 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- 4.00%
2. GrowthPoint 1.36%
3. MTN 1.02%
4. Sasol 1.02%
5. Redefine 0.99%
6. BTI Group 0.98%
7. FirstRand / RMBH 0.95%
8. Steinhoff Int Hldgs N.v 0.84%
9. Stanbank 0.83%
10. New Erupe Property Investments 0.71%
Cash And Money Market Assets
Inflation Linked Bonds
Property
International Assets
Bonds
Equities
1. Naspers -N- 4.00%
2. GrowthPoint 1.36%
3. MTN 1.02%
4. Sasol 1.02%
5. Redefine 0.99%
6. BTI Group 0.98%
7. FirstRand / RMBH 0.95%
8. Steinhoff Int Hldgs N.v 0.84%
9. Stanbank 0.83%
10. New Erupe Property Investments 0.71%
Cash And Money Market Assets
Inflation Linked Bonds
Property
International Assets
Bonds
Equities

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

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.

Traditional Investing (When you invest via a Financial Adviser or other)

Retail Class (%)

  • Advice initial fee (max.) N/A
  • Manager initial fee N/A
  • Advice annual fee (max.) 1.14%
  • Manager annual fee .0.63%
  • Total expense Ratio (TER) 0.77%
  • Transaction Cost (TC) 0.12%
  • Total Expense Ratio (TER) 1.26%

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.

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.

Where this fund invests into other unit trusts, it does so into zero fee classes except for offshore equity (0.30%) and offshore bonds (0.15%).

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 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.

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.

Disclaimer

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.

The year 2016 was definitely full of surprises starting with the Bank of Japan stunning the market with a surprise move to negative interest rates, muted Chinese GDP growth and the Brexit vote that wiped out about $2 trillion of global stocks overnight and knocked the British pound to 31-year lows. This was followed by Trump winning the presidency in a historic election upset in the US, which led to the dollar reaching a 14-year high in November and also the long-awaited Fed interest rate hike in December, with probably more to come in 2017.

The standout event over the last quarter must be the spectacular sell-off in US long bonds following the election of Donald Trump as president. The yield of the 30-year bond increased from 2.3% in October to 3.2% in mid-December as markets priced in the likelihood of fiscal stimulus with the Republicans firmly in control. The Fed continued on a path of vigilance against inflation as leading indicators point to growth and the first signs of wage inflation become visible. Both these events are a harbinger for a process that is likely to lead to higher global bond yields in future.

The 2016 performance of global equity markets was reasonable at best. The USD return of the MSCI Developed Markets Index was 8.2% and that for the MSCI Emerging Markets (EM) Index was 11.6%. The MSCI World Value Index outperformed its Growth counterpart by 7.8% over the last six months, a level that only occurred for 6% of the time over the last 20 years. Despite the 2016 rally, the MSCI Value shares are still close to historic lows in terms of earnings, valuations and price levels relative to Growth shares. The underperformance of Value stocks has closely tracked bond yields and inflation expectations, both of which are in a bottoming process. Foreign bonds had a particularly tough final quarter of 2016 (- 7.1% in USD), but returned 2.1% in USD for the full calendar year. The global bond sell-off (post the Trump victory) came on the back of higher inflation and economic growth expectations accompanied by a steeper interest rate trajectory.

It is our view that global growth will be driven by an acceleration in the US with stable growth in the Eurozone. The Chinese economy will probably grow at a slightly lower rate as fiscal stimulus and the leveraging of the property sector slow down. We also expect stable growth in emerging markets in general and SA recovering from a low base as commodity prices stabilise. The MSCI SA Index (+18.4%) outperformed the MSCI EM Index (+11.6%) in USD in 2016, as the rand (+12.6%) recovered to end 2016 as the third-best performing EM currency, helped by the political landscape stabilising somewhat, SA avoiding the foreign currency ratings downgrade and an improvement in commodity prices and EM sentiment.

However, in local currency terms, the FTSE/JSE All Share Index (+2.6%) underperformed SA bonds (+15.5%), SA property (10.2%), cash (+7.4%) and SA inflation-linked bonds (6.3%) in 2016. From a sector perspective 2016 was a year for value cyclicals with General Mining (+61.6%), Platinum (+50.5%) and Banks (+33.6%) among the best performing sectors. The eventual appointment of Finance Minister Pravin Gordhan, who helped SA avoid the ratings downgrade in 2016, and an improvement in EM risk sentiment helped the rand to achieve its best year since 2009, appreciating by 12.6% in 2016.

In Closing

While the capital markets have 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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