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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: R3 166.8 million
Benchmark: MSCI World Equity Index (in ZAR)
Time Horizon: 10 years +
*As at 31 July 2018
 
Risk Profile: Aggressive
Fund Classification: Global - Equity - General
Min Investment Amount: Lump sum: R10 000 | Monthly: R500
Total Expense Ratio (TER): 0.89%
Fees: View Fees
Launch Date: October 2013
Fund Size: R3 166.8 million
Benchmark: MSCI World Equity Index (in ZAR)
Time Horizon: 10 years +
Risk Profile: Aggressive
Fund Classification: Global - Equity - General
Min Investment Amount: Lump sum: R10 000 | Monthly: R500
Total Expense Ratio (TER): 0.89%
Fees: View Fees
*As at 31 July 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 31 July 2018)
Retail Class Fund (%) Benchmark (%)
1 year 9.82 11.07
3 year 9.4 10.29
5 year N/A N/A
Since inception 12.95 14.82

Annualised return is the weighted average compound growth rate over the period measured
Highest and Lowest Annual Returns since inception
Highest Annual % 19.77
Lowest Annual % 8.29

Fund Factsheet

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 Co2.22%
2. Microsoft Corp1.78%
3. Facebook Inc0.97%
4. Alphabet Inc Cl C0.94%
5. JP Morgan Chase & Co0.87%
6. Johnson & Johnson0.79%
7. Alphabet Inc Cl A0.79%
8. Exxon Mobil Corp0.75%
9. Bankamerica Corp0.66%
10. Wells Fargo & Co0.59%
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 Co2.22%
2. Microsoft Corp1.78%
3. Facebook Inc0.97%
4. Alphabet Inc Cl C0.94%
5. JP Morgan Chase & Co0.87%
6. Johnson & Johnson0.79%
7. Alphabet Inc Cl A0.79%
8. Exxon Mobil Corp0.75%
9. Bankamerica Corp0.66%
10. Wells Fargo & Co0.59%

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 0.58%
Total expense Ratio (TER) 0.89%
Transaction Cost (TC) 0.09%

Advice fee

Any advice fee is negotiable between the client and their financial adviser. An annual advice fee negotiated is paid via a repurchase of units from the investor.

Total Expense Ratio (TER)

This is the percentage of the value of the Financial Product that was incurred as expenses relating to the administration of the Financial Product. A higher TER does not necessarily imply a poor return, nor does a low TER imply a good return. The current TER may not necessarily be an accurate indication of future TER’s.

Transaction Cost (TC)

This is the percentage of the value of the Financial Product that was incurred as costs relating to the buying and selling of the assets underlying the Financial Product. Transaction Costs are a necessary cost in administering the Financial Product and impacts Financial Product returns. It should not be considered in isolation as returns may be impacted by many other factors over time including market returns, the type of Financial Product, the investment decisions of the investment manager and the TER.

Total Investment Charges (TER + TC)

This is the percentage of the value of the Financial Product that was incurred as costs relating to the investment of the Financial Product.

For more detail please view the fund factsheet

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.

Macro review

While 2016-2017 could be described as a global synchronised recovery, 2018 is turning out to be a year of regional divergence. In recent months, US economic surprises and leading indicators have remained strong but have rolled over abroad. Divergence is also evident in corporate profits and interest rate differentials.

During the last three calendar months (Q2 of 2018) the MSCI World (DM) index posted a USD return of 1.9% (versus -1.2% for Q1), outperforming the -7.9% of Emerging markets (EM). Year to date EM posted a loss of 6.5%, while developed markets realised a positive return of just 0.8%.

A protracted slowdown in global growth remains the main fundamental risk, with trade wars and a China slowdown being the most specific challenges.

This could be negative for global growth and EM (we could still see more capitulation). It is a known fact that trade wars have no winners and it is therefore our investment view that a full-blown trade war scenario will not play out. However, the market's willingness to give politicians the benefit of doubt over the past six months might have perversely prolonged the game of chicken. The irony now is that a market correction might be needed to reduce the risk of a trade war, which could be the dynamics of the markets in the weeks to come. The outlook for EM is turning more ‘stagflationary’, in the sense that growth risks have shifted decisively to the downside, while inflation risks are creeping up.

Earlier in the year it was our view that international markets could rally somewhat this year; we are now more cautious as the risk of trade wars rises.

Performance

The MSCI World Index (developed markets) realised a net return of 1.73 % in USD terms for the second quarter of 2018, which was better than the -7.96% of the MSCI Emerging Markets.

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 1600 shares included in the index. We do the tracking of this index through a process of optimisation with a tracking error ranging between 15 and 18 basis points.

The MSCI World Index (in Rand terms) managed a return of about 17.68% (1.73% in USD) over the last three months. This difference in return was mainly due to the Rand depreciating by about 15.9 % against the USD over this period.

Conclusion

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 back stop supporting financial markets.

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