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Satrix MSCI World Equity Index Feeder Fund

Diversifying across countries can benefit your portfolio. Also, investors planning future international studies or travel, or perhaps an offshore retirement may want to look outside SA for wealth preservation. Investors don’t need an offshore bank account to invest in this fund; the returns will be paid into an SA bank account.

Quick Facts About The Fund*

Satrix MSCI World Equity Index Feeder Fund

Launch Date: October 2013
Fund Size: R2 039.7 million
Benchmark: MSCI World Equity Index (in ZAR)
Time Horizon: 5 years +
*As at 30 September 2017
Risk Profile: Aggressive
Fund Classification: Global - Equity - General
Min Investment Amount: Lump sum: R10 000 | Monthly: R500
Total Expense Ratio (TER): 0.89%
Launch Date: October 2013
Fund Size: R2 039.7 million
Benchmark: MSCI World Equity Index (in ZAR)
Time Horizon: 5 years +
Risk Profile: Aggressive
Fund Classification: Global - Equity - General
Min Investment Amount: Lump sum: R10 000 | Monthly: R500
Total Expense Ratio (TER): 0.89%
*As at 30 September 2017

Fund Strategy

The Sanlam World Equity Tracker Fund (underlying fund) employs optimisation techniques to track the performance of the index, rather than attempting to hold all of the securities in the index.


Illustrative Cumulative Growth of an investment of R100

Performance

Annualised Total Return on a rolling monthly basis
(as at 30 September 2017)
Retail Class Fund (%) Benchmark (%)
1 year 15.14 16.22
3 year 12.95 14.25
5 year N/A N/A
Since inception 14.41 16.50

Annualised return is the weighted average compound growth rate over the period measured
Highest and Lowest Annual Returns since inception
Highest Annual % 15.14
Lowest Annual % 11.30

Minimum Disclosure Document (Fund Fact Sheet)

Cumulative Growth Over Time

Satrix MSCI World Equity Index Feeder Fund
MSCI World Equity Index (in ZAR)

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.

1. Apple Computer Co 1.96%
2. Microsoft Corp 1.31%
3. Facebook Inc 1.00%
4. Alphabet Inc Cl C 0.82%
5. Johnson & Johnson 0.80%
6. JP Morgan Chase & Co 0.78%
7. Exxon Mobil Corp 0.76%
8. Alphabet Inc Cl A 0.62%
9. Bankamerica Corp 0.62%
10. Nestle SA CHF1 0.62%
Equity Energy
Equity Utilities
Equity Health Care
Equity Information Technology
Equity Financials
Equity Telecommunication Services
Equity Consumer Discretionary
Equity Consumer Staples
Equity Industrials
Equity Materials
1. Apple Computer Co 1.96%
2. Microsoft Corp 1.31%
3. Facebook Inc 1.00%
4. Alphabet Inc Cl C 0.82%
5. Johnson & Johnson 0.80%
6. JP Morgan Chase & Co 0.78%
7. Exxon Mobil Corp 0.76%
8. Alphabet Inc Cl A 0.62%
9. Bankamerica Corp 0.62%
10. Nestle SA CHF1 0.62%
Application form: Satrix Individual Investors (new investors only) ENG
Application form: Satrix Tax-Free Unit Trusts (new investors only) ENG

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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.

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.

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

Advice initial fee (max.) N/A
Manager initial fee N/A
Advice annual fee (max.) 1.14%
Manager annual fee 0.57%
Total expense Ratio (TER) 0.89%
Transaction Cost (TC) 0.09%

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 July 2016 to 30 June 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

** The Satrix MSCI World Equity Index Feeder Fund invests in a share class of the underlying fund (Sanlam World Equity Tracker Fund Class I) which reinvests all income declared and received. As such, the Satrix MSCI World Equity Index Feeder Fund does not distribute.

A Feeder Fund is a portfolio that, apart from assets in liquid form, consists solely of participatory interest in single portfolio of a collective investment scheme (Sanlam World Equity Tracker Fund I; fee 0.30%).

The Satrix MSCI World Equity Index Feeder Fund invests in the dollar based Sanlam World Equity Tracker Fund listed on the Irish Stock Exchange. The performance of the Satrix MSCI World Equity Index Feeder Fund relative to its benchmark may be affected on a day to day basis as a result of the differing timezones, pricing points, transactions and exchange rates, all which are associated with the daily price calculation of the Satrix MSCI World Equity Index Feeder Fund.

The price of the Satrix MSCI World Equity Index Feeder Fund for the current business day is based on the prevailing closing price of the Sanlam World Equity Tracker Fund (the underlying fund) of the previous business day. Transactions on the underlying Sanlam World Equity Tracker Fund is executed at the next pricing point (based on forward pricing) that may also affect the performance of the Satrix MSCI World Equity Index Feeder Fund relative to its benchmark on a trading day in addition to exchange rate conversions.

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.

Market review

Global markets, up 5% in US dollars this quarter, have remained buoyed by the $1.7 billion central bank injection this year and 13% increase in earnings growth. Global growth is strong at 3.5%, accompanied by low unemployment and improved consumer and business confidence. The current bull run in global equities is near the strongest in history, yet global valuations are only near the trough levels of 2003. Moreover, prospects for earnings are the most positive in nearly five years. On the face of it, the outlook appears serene, but on most historical measures the US seems to be on the expensive side while other regions prove to be cheaper.

History has shown us that the toughest month in the calendar year for the Dow Jones is October, which has coincided with emerging market (EM) currency sell-off since early September. The question is whether this should be a cause for concern, as in the grander scheme of things these are small moves as EM currencies are still up 5% vs the US dollar year to date. Most importantly for SA investors, the rand has declined versus the greenback and has wiped out most of this year’s currency gains. There have been four main drivers for the rebounding of the dollar: 1) mainly that US inflation is likely to move higher over the coming months, suggesting a December hike by the Fed; 2) reversing quantitative easing from October; 3) President Trump’s overhauled plans on tax reform, including cutting the corporate tax rate to 20%; and 4) Chancellor Merkel’s reduced majority in the German elections. The rebalancing of the Chinese economy continues with strong double-digit growth in retail spending while investment spending growth is slowing down into the single digits. The services economy is growing faster, attracting three quarters of fixed investment in the economy. The housing market remains resilient especially on the commercial side with a tapering off of residential sales due to restrictions to cool off activity. The cynics, however, always point out that Chinese data comes out 17 calendar days after the period end, but there is no doubt that the economy has showed some resilience this year.

We believe that right now we are in ‘EM giving back some of the strong gains of 2017’ territory. But moves in the dollar are something to watch in the immediate future.

Performance and portfolio actions

The MSCI World Index (developed markets) realised a net return of 4.8 % in US dollar terms for the third quarter of 2017, which was worse than that of the MSCI Emerging Markets Index (6.4%).

Our feeder fund buys and sells units in a ‘parent fund’ called the Satrix MSCI World Index fund, which tracks 23 developed countries with more than 1 600 shares included in the index. We do the tracking of this index through a process of optimisation with a tracking error varying between 15 and 20 basis points.

The MSCI World Index (in rand terms) managed a return of about 8% over the last three months. Over this period the rand depreciated by about 3.5% against the US dollar. The main question facing investors, as in the third quarter of 2017, is whether valuations and positioning point to a tactical pullback from risk. We think that the general market view currently is that it would probably not. This year’s equity rally has been driven by earnings growth, not multiple expansion; while the pace of this growth might slow, stocks should still out-earn bonds. It is difficult to see a plausible catalyst that could upset valuations in risky assets for the rest of 2017.

If we contrast the fortunes of overseas markets to our local one, it is clear that investor confidence is an important behavioural factor driving investment markets. Companies which have delivered results below expectation are being marked down heavily and a number of former darling stocks have suddenly been found wanting

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