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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.

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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: R370.0 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): 0.75%
Launch Date: July 2014
Fund Size: R370.0 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): 0.75%

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 30 June 2017 on a rolling monthly basis
Retail Class Fund (%) Benchmark (%)
1 year 1.80 2.46
3 year N/A N/A
5 year N/A N/A
Since inception 5.93 6.49

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 % 8.65
Lowest Annual % 1.80

Minimum Disclosure Document (Fund Fact Sheet)

Performance Fees FAQ

Illustrative Annualised Investment Performance

Satrix Low Equity Balanced Index Fund
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- 4.94%
2. GrowthPoint 1.19%
3. BTI Group 1.04%
4. Redefine 0.95%
5. MTN 0.93%
6. Sasol 0.92%
7. FirstRand / RMBH 0.86%
8. Stanbank 0.83%
9. Steinhoff Int Hldgs N.v 0.80%
10. New Europe Property Investments 0.69%
Cash And Money Market Assets
Inflation Linked Bonds
Property
International Assets
Bonds
Equities
1. Naspers -N- 4.94%
2. GrowthPoint 1.19%
3. BTI Group 1.04%
4. Redefine 0.95%
5. MTN 0.93%
6. Sasol 0.92%
7. FirstRand / RMBH 0.86%
8. Stanbank 0.83%
9. Steinhoff Int Hldgs N.v 0.80%
10. New Europe Property Investments 0.69%

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 0.65
Total Expense Ratio (TER) 0.76
Transaction Cost (TC) 0.10

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.

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 01 January 2016 to 31 December 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. Obtain the costs of an investment prior to investing by using the EAC calculator provided at www.satrix.co.za.

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.

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 leader board 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 Markets (EM) Index (+12%), Brazil’s Bovespa (+12%) and Hong Kong’s Hang Seng (+10%), but it’s also been a strong quarter for developed market (DM) equities with the Europe Stoxx 600 (+8%) and in the US the S&P 500 (+6%). With the first three months of the year now done 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, reflecting the view that real rates are in a bubble and there's risk of a significant repricing in the medium term as the rate hike cycle gathers steam. The Trump put 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 put 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, rating agency Standard & Poor’s (S&P) eliminated South Africa's foreign currency sovereign investment-grade (IG) rating, downgrading it to BB+ from BBB- with a negative outlook. While SA currently remains IG, SA’s IG status could be impacted following the review scheduled for this Friday by Moody’s, but it should be noted that Moody’s currently rates SA two notches above a sub-IG rating. Fitch is also likely to pull forward its decision earlier, likely to result in forced selling, as SA loses its IG status. Numbers involved here could be substantial.

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 Pravin 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 sector 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 year ahead

For our 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 the biggest threat of unfolding political developments is to SA bonds, where 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 newsflow 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?

Conclusion

The outlook for markets is again uncertain. The global backdrop is one of improvement on the margin, which all else being equal should be to the benefit of 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 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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