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Momentum is defined for the index in terms of a composite of price momentum and
earnings momentum as measured by analyst revisions. The index is reviewed monthly with cognizance given to the liquidity of individual counters and the turnover of the benchmark as a whole. The benchmark is also moderated in terms of sector and stock specific risks. The universe for selection of stocks to be included in the Satrix Momentum Index is all stocks on the JSE that meet the applicable liquidity screening requirements referred to in the calculation methodology, excluding listed property stocks.
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.
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.
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 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, 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 (bps) 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% (quarter-on-quarter, seasonally adjusted annual rate)
after a brief technical recession in the first quarter.
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.
Globally, the Momentum factor (particularly Price Momentum) continues to lead the
race among factor performances YTD, followed closely by Quality/Profitability and
Growth. In South Africa, we are starting to see an alignment with global outcomes,
as Price Momentum’s strong recovery in the third quarter of 2017 has seen this
factor among the leading factors in the domestic market YTD. This, after a
particularly poor 2016 calendar year, has seen the Momentum factor redeem itself
somewhat and recoup much of the losses it experienced last year. Earnings
revisions, however, has not seen the same recovery, and continues to be tepid
during 2017, given still high levels of domestic economic and policy uncertainty
flowing over to uncertain corporate earnings estimates.
Notwithstanding the testing environment, our Momentum offering (which combines
Price Momentum and Earnings revisions) has steadily improved its year-to-date
performance relative to the Swix. 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.
Stock selection within the resource sector was the primary driver of positive relative
performance over this quarter, where names such as Kumba Iron Ore (KIO), Exxaro
(EXX), Assore (ASR), and Glencore (GLN) were the largest contributors from
overweight positions. Industrial counters such as Barloworld (BAW), Naspers (NPN),
both overweights, and Remgro (REM), an underweight, also lent support to
outperformance. On the other hand the largest detractors were underweights in
Anglo American (AGL) and BHP Billiton (BIL), and overweights in British American
Tobacco (BTI) and Sappi (SAP).
At last rebalance date, we transitioned the portfolio based on the evaluation of new
factor signals and the risk levels in the portfolio. Based on these signals, Sappi
(SAP), Old Mutual (OML) and Curro (COH) were removed, and African Rainbow
Minerals (ARI) and Reinet (REI) were added. Exposures in RMI (RMI) and Kumba
Iron Ore (KIO) have also been reduced while exposures to Assore (ASR) and
Richemont (CFR) were increased in line with the risk objective of the fund. 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.
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