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

Retail Class (%)

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 2016 to 31 March 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.sanlamunittrustsmdd.co.za.

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

• No initial account set-up fees – usually charged at 2.28%.
• No switching fees
• No exit fees
• No account changes fees
• No rebalancing fees
• No commissions
• No debit order fees
• No fund manager rebates

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

On the back of all the negative newsflow SA listed property stocks have had a very subdued reaction relative to the bond market. Historically, the performance of listed property shares tracked that of the bond market, but that correlation has started to wane partly because of the local listed companies’ increased offshore exposures. Will they feel the brunt in the weeks to come?

The FTSE/JSE SA Listed Property Index (SAPY) managed a total return of 1.4% over the first quarter of 2017, underperforming the FTSE/JSE All Share Index (3.8%) and SA cash (1.8%).The best-performing shares in the SAPY over the first quarter included the likes of Rebosis and Delta. By contrast, some of the worst-performing shares included rand hedge stocks or stocks with UK and EU exposure such as Nepi, Rockcastle, Intu and Capital & Counties. This was due to the rand strengthening in the first quarter, however, at the time of writing this has unfortunately (for the country) reversed sharply following President Jacob Zuma’s recall of finance minister Pravin Gordhan, and flowing from this the country’s double downgrade to junk status by S&P and Fitch. Portfolio performance and actions.

Your fund performed in line with the SAPY benchmark.

During the quarterly rebalance in March, Liberty Two Degrees replaced Stenprop in the index and some of the larger company weight changes included Fortress, Octodec, Resilient and Vukile. Total one-way turnover came to about 1%. Other corporate actions that took place was the scheme of arrangement whereby Pivotal was acquired by Redefine.

The FTSE/JSE is currently working on some changes that they want to implement on the listed property indices. They will communicate this information to the market well in advance before it happens.

Outlook

The SAPY is currently on a 7.3% clean forward yield, with two-year expected growth in dividends of about 7% p.a. This yield is now a 170 basis points (bps) premium to (i.e. below) the long-bond yield. The spread versus bonds has narrowed, however, from as high as 260bps in the first quarter of 2016, due to our local bonds rallying and the SAPY derating slightly from 6.6%, when it also yielded less than SA cash. The implied average yield of SA-specific counters is closer to 8% currently.

We consider these levels to be fair to marginally cheap in absolute terms and rather attractive on a relative basis for the long-term investor when compared to bonds and SA cash. This is considering that listed property gives you growth in income distributions while bonds and cash do not. Over the longer term, e.g. three or more years, one would still expect an inflation-beating absolute total return from listed property of 11% to 13% per annum, which is expected to comfortably beat inflation, cash and bonds.