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 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 https://satrix.co.za/products

** 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 review

Global real GDP and industrial production momentum have been firm year-to-date, but growth momentum will be difficult to sustain unless productivity growth also lifts. In the US, rates were raised by 25 basis points while the median market participant still expects one more hike this year and another two to three next year. The Federal Open Market Committee (FOMC) appeared unfazed by the slew of weak inflation prints, believing it to be temporary.

In the US, the recovery story manifested itself via IT stocks with the NASDAQ up 13% in the first half of 2017. A bout of ransomware attacks on leading institutions globally further accentuated the importance of technology in our everyday lives. The appetite for growth assets appears to be whetted by low US bond yields. After rising from record lows of below 1.5% last year to 2.6% at the end of the first quarter of 2017, the US bond market is once again pricing borrowing costs below 2% as Fed tightening is seen as less of a threat. This has slain the VIX ‘fear index’ to 25-year lows and driven the S&P 500 Index to hit record highs above the 2 430 level in June. Recently released macroeconomic data is pointing towards a steady near-term growth path for China and at the latest ECB meeting the central bank was optimistic on growth and inflation with expected tapering to start early next year, which in general should be conducive for equity markets in general.

Portfolio performance and changes

The MSCI World Index (developed markets) realised a net return of 4.03 % in US dollar terms for the first 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 1.5% over the last three months. Over this period the rand appreciated by close to 2.6% against the US dollar.

The year ahead

Despite the rollercoaster of emotions, global equities hit record highs during the past quarter. Greed is winning and the VIX and similar fear indices in other countries are at decade lows!

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.