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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.

Fund Summary*

Satrix MSCI World Equity Index Feeder Fund

Launch Date: October 2013
Fund Size: R2 711.6 million
Benchmark: MSCI World Equity Index (in ZAR)
Time Horizon: 5 years +
*As at 30 April 2018
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 711.6 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 April 2018

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 April 2018)
Retail Class Fund (%) Benchmark (%)
1 year 4.97 5.95
3 year 8.28 9.16
5 year N/A N/A
Since inception 11.75 13.55

Annualised return is the weighted average compound growth rate over the period measured
Highest and Lowest Annual Returns since inception
Highest Annual % 19.96
Lowest Annual % 4.97

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 Co2.07%
2. Microsoft Corp1.67%
3. Facebook Inc1.02%
4. JP Morgan Chase & Co0.88%
5. Alphabet Inc Cl C0.81%
6. Johnson & Johnson0.80%
7. Exxon Mobil Corp0.78%
8. Alphabet Inc Cl A0.72%
9. Bankamerica Corp0.71%
10. Nestle SA CHF10.56%
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 Co2.07%
2. Microsoft Corp1.67%
3. Facebook Inc1.02%
4. JP Morgan Chase & Co0.88%
5. Alphabet Inc Cl C0.81%
6. Johnson & Johnson0.80%
7. Exxon Mobil Corp0.78%
8. Alphabet Inc Cl A0.72%
9. Bankamerica Corp0.71%
10. Nestle SA CHF10.56%
Application form: Satrix Individual Investors (new investors only) ENG
Application form: Satrix Tax-Free Unit Trusts (new investors only) ENG

View more Satrix forms

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 April 2017 to 31 March 2018. 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

What a volatile start for global markets during the first three months of 2018! A pullback in technology-driven shares, rising trade tensions and fears over higher rates and inflation led to a volatile first quarter of 2018 for the S&P 500 Index. Following a 10% correction from its January highs and rallying back 8% by early March, the index suffered another 5% pullback in the last few weeks, ending the month of March down 2.5% on a total return basis and losing 0.8% over the last three months (first negative quarter since the third quarter of 2015). The S&P 500’s correction of just over 5% in the first week of February was a reminder that rising bond yields are likely to cause much anxiety on the path to normalisation. While stocks were the worst-performing asset class in March, they finished the first quarter in the middle of the pack, beating both long-term Treasuries (-3.2%) and investment-grade corporate bonds (-2.2%) but lagging cash (+0.4%), gold (+2.5%), WTI oil (+5.3%) and the US Dollar Index (-0.7%).

Forgotten was the fact that the US implemented the biggest tax reform in three decades to drive the corporate income tax rate down from 35% to 21% and boost investment spending and productivity. The US is also encouraging corporates to repatriate some $2.5 trillion held offshore - but the impact on the US dollar should be limited as it is over 10 years and already held in dollars. The market, however, reminisced that the 1986 tax reform programme led to the considerable weakening of the greenback.

While recent data globally are mixed, credit impulse numbers and various leading indicators do suggest that growth expectations may still have room to drift lower. This could mean that downside risks for equities, yields and broader commodity prices are increasing, but in general the market positioning is much cleaner now and has probably priced in this ‘news’, leaving scope for a bounce. While February and March are historically weak, April is a seasonally strong month (+1.2% average total return since 1928, the third-best month of the year).

Portfolio and performance review

The MSCI World Index (developed markets) realised a net return of -1.28% in US dollar terms for the first quarter of 2018, which was worse than that of the MSCI Emerging Markets Index of 1.5%.

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 18 basis points. The MSCI World Index (in rand terms) managed a return of about -5.5% (-1.28% in US dollar) over the last three months - this difference in return was mainly due to the rand appreciating by more than 4% against the dollar over this period.

Conclusion

Volatility has once again become the dominant factor in financial markets globally, exemplified by the VIX fear index experiencing its biggest daily spike in history during the quarter. There are growing concerns that global businesses may be subject to new regulation and be the target of tariffs if a US-China trade war escalates. Political risk is dominating fundamentals and we now have progressed into a new era where central banks are not the backstop supporting financial markets.

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