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Satrix Property Index Fund

Investing in bricks and mortar has been around for as long as people have had access to capital. But investing in one property has disadvantages: all your eggs are in one basket, and your property may stay on the market for longer than you wish before you get your asking price. This listed property fund addresses these concerns by diversifying across liquid property instruments.

This is a specialist index tracking fund tracking the performance of the FTSE/JSE SA Listed Property Index. It is best suited to investors with a long-term investment horizon. For more information contact your financial adviser or broker.

Fund Summary*

Satrix Property Index Fund

Launch Date: August 2012
Fund Size: R1 308.9 million
Benchmark: FTSE/JSE SA Listed Property Index (J253)
Time Horizon: 10 years+
*As at 31 July 2018
 
Risk Profile: Aggressive
Fund Classification: SA - Real Estate - General
Min Investment Amount: Lump sum: R10 000 | Monthly: R500
Total Expense Ratio (TER): 0.49%
Fees: View Fees
Launch Date: August 2012
Fund Size: R1 308.9 million
Benchmark: FTSE/JSE SA Listed Property Index (J253)
Time Horizon: 10 years+
Risk Profile: Aggressive
Fund Classification: SA - Real Estate - General
Min Investment Amount: Lump sum: R10 000 | Monthly: R500
Total Expense Ratio (TER): 0.49%
Fees: View Fees
*As at 31 July 2018

Fund Strategy

We believe that the benchmark choice and resulting returns form the most important elements of an equity strategy - by investing in a passive vehicle the returns to investment strategies are known. By applying a full replication strategy there is no risk of deviation from the chosen benchmark.


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 -14.04 -13.59
3 year -1.15 -0.91
5 year 6.99 7.52
Since inception 7.24 7.83

Annualised return is the weighted average compound growth rate over the period measured
Highest and Lowest Annual Returns since inception
Highest Annual % 30.06
Lowest Annual % -14.04

Fund Factsheet

Cumulative Growth Over Time

Satrix Property Index Fund
FTSE/JSE SA Listed Property Index (J253)

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. GrowthPoint22.97%
2. Redefine16.97%
3. NEPI ROCKCASTLE PLC12.62%
4. Hyprop7.84%
5. Vukile 4.29%
6. Resilient3.90%
7. Fortress Income Fund3.74%
8. ATTACQ Limited3.56%
9. SA Corp Real Estate3.44%
10. Fortressa3.19%
Equity Retail REITs
Real Estate Holding & Development
Equity Industrial & Office REITs
Equity Diversified REITs
Cash and Money Market Assets
1. GrowthPoint22.97%
2. Redefine16.97%
3. NEPI ROCKCASTLE PLC12.62%
4. Hyprop7.84%
5. Vukile 4.29%
6. Resilient3.90%
7. Fortress Income Fund3.74%
8. ATTACQ Limited3.56%
9. SA Corp Real Estate3.44%
10. Fortressa3.19%

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)

Retail Class (%)

Advice initial fee (max.) N/A
Manager initial fee N/A
Advice annual fee (max.) 1.14%
Manager annual fee 0.52%
Total expense Ratio (TER) 0.49%
Transaction Cost (TC) 0.10%

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.

The FTSE/JSE SA Listed Property Index (SAPY) achieved a total return of -2.2% in Q2’18, again underperforming other domestic asset classes such as cash and equities, as measured by the FTSE/JSE Shareholder Weighted Index (SWIX), which returned 2.08% for the quarter. Year to date (YTD), the SAPY has materially underperformed with a return of -21.4% versus -4.8% for general equities.

The best performing shares in the SAPY for the quarter included the likes of Greenbay, Fortress B and Resilient, with this grouping returning a total of 25-35% for the quarter, albeit from very depressed levels. Therefore, YTD, for example, this grouping is actually still the three worst performing SAPY shares - down 45-60%, even after their second-quarter rebound. The only other two shares that had a positive total return over the last three months were Sirius Real Estate and NEPI Rockcastle, which returned 10% and 6% respectively.

The worst performing shares in the quarter included Arrowhead, Attacq and SA Corporate, which returned a negative 10-15%.

Performance and portfolio changes

The current quarter was again very quiet on the corporate action front.

With the June 2018 FTSE/JSE SAPY rebalance, there were no additions or deletions to the index, but the weightings of Growthpoint and Redefine increased while Resilient and Fortress A decreased in the SAPY Index. The one-way turnover was somewhat higher than before at 3.2%.

Your fund performed in line with the SAPY benchmark. The fund experienced some positive cash drag due to the index being in the red over the last three months.

Outlook

Following the weak H1’18 returns, the SAPY has derated from a 6.8% clean forward yield at end Q4’17, to an attractive 8.1% trailing income yield, and about an 8.6% clean forward yield. The forward yield is a slight premium to the SA long-bond yield of 8.7%, which itself derated in Q2’18 as Ramaphoria faded, and amid general emerging market weakness on account of an impending trade war.

We consider these levels to be more attractive again, in absolute terms, and certainly relative to SA bonds and SA cash. With the SAPY, where investors achieve growth in dividends (unlike cash and bonds) of at least CPI in the long run (4-6% p.a.), the current price levels and entry level make for a total medium to long-term expected return of 12.5-14.5% p.a.

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