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

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 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.sanlamunittrustsmdd.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.

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

• 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) 1.00%
• Transaction Cost (TC) 0.07%

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.

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 commentary

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 some time this year.

Portfolio performance

The MSCI World Index (developed markets) realised a net return of 6.38% in US dollar terms for Q1 2017, which was worse than that of the MSCI EM Index (11.5%). 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 20 basis points. The MSCI World Index (in rand terms) managed a return of about 4.3% over the last three months. Over this period the rand appreciated by close to 2% against the US dollar.

Conclusion

The global backdrop is one of improvement on the margin, which all else being equal should bode well for global equities. Against the worsening political climate in South Africa the uncertainty around the rand has increased and any weakening from this level could further enhance your rand returns from this portfolio.