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for private investors can be accessed on the Personal area of our site. Terms & conditions.
Returns are sought through tactical asset allocation and high conviction bets across the income-yielding universe, including corporate and government bonds, money market instruments, preference shares and listed property. Opportunities are taken across the entire duration and credit spectrum. The fund is mandated to invest in unlisted financial instruments (derivatives) for efficient portfolio management. This portfolio may also invest in participatory interests of underlying unit trust portfolios.
Illustrative Cumulative Growth of an investment of R100
Minimum Disclosure Document (Fund Fact Sheet)
Performance Fees FAQ
Cumulative Growth Over Time
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.
Portfolio Manager - Sanlam Investment Management
Melville du Plessis joined Sanlam Investment Management in 2011 as a Portfolio Manager in the fixed interest team. He is responsible for a range of actively managed mandates, including local Bond Funds, Enhanced Yield Funds and International Debt Portfolios. Prior to SIM he was with Novare Investments, having joined in 2006 as an analyst in the Fund of Hedge Funds and Investment Research teams, and later taking responsibility as portfolio manager of the Multi-Asset Class and Multi-Manager products. Melville has a BComm (Institutional Investments) and a BCommHons (Financial Risk Management), both from the University of Stellenbosch. He is also a CFA charter holder, a CAIA charter holder and a certified FRM.
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.
Total Expense Ratio (TER) | PERIOD: 1 October 2014 to 30 September 2017
Total Expense Ratio (TER) | 0.92% of the value of the Financial Product 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) | 0.00% of the value of the Financial Product 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) | 0.92% of the value of the Financial Product was incurred
as costs relating to the investment of the Financial Product.
Income funds derive their income from interest-bearing instruments as defined. The yield is a
current yield and is calculated daily.
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. Fluctuations or movements in exchange rates may cause
the value of underlying international investments to go up or down.
Our smart online system is working to make investing more profitable for you. The management fee you 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
SO YOU’RE ONLY CHARGED THE RELEVANT FUND-MANAGEMENT FEE
Sanlam Investment Management (SIM) is the local active asset management house within Sanlam Investments. When choosing a fund managed by us, you have on your side one of SA’s largest and most reputable, risk conscious investment teams, consistently meeting or exceeding our benchmarks. Sanlam Collective Investments has appointed SIM as the asset manager for its unit trust funds, catering for the full spectrum of risk profiles.
The fourth quarter of 2017 had more than its fair share of events to keep market
participants on their toes, but the positive momentum in performance across most
global and local asset classes continued. Global financial markets continued to
deliver strong performance with both international stock markets, as well as our local
equity market, reaching all-time highs during the last quarter of the year. Looking at
the full calendar year returns, global asset classes delivered either good or at least
positive returns to investors almost across the board. Global bond markets also
showed resilience and traded with a stronger bias even though factors such as the
growth outlook and the suggested monetary policy paths are against the already
stretched valuations. German Bunds were a notable outlier as they underperformed
compared to most global asset classes for the year. In the United States, the Fed
continued on their path of monetary policy normalisation with another hike in the
federal funds rate during December to 1.25-1.50%. The European Central Bank
(ECB) and the Bank of Japan (BoJ) kept their rates at 0.0% and -0.1% respectively.
Global markets seem to be somewhat complacent - looking at the VIX it is still
around its lowest level ever and was hovering below or around a level of 10 for most
of the quarter.
In terms of performance, South African fixed interest assets were outliers for most of
the year, with South African government bond yields showing higher volatility and
trading with a weaker bias during the year - in particular during the final quarter of
2017. South African bonds recovered in the nick of time, rallying strongly during the
last few weeks of December. In fact, December was one of the best months on
record for our ALBI in US dollar terms. After initially showing quite a bit of weakness
during October and November, South African interest rates subsequently turned
around and recovered the previous months’ losses during December.
South African inflation (CPI) slowed to 4.6% year-on-year in November from 4.8% in
October with core CPI slowing to 4.4% year-on-year from 4.5% in October. We are
still importing deflation but disinflation stemming from the exchange rate is fading
out. The inflation print continues to reinforce that CPI is to bottom out during the first
quarter of 2018 before starting to pick up again. We expect CPI to remain relatively
contained within the SA Reserve Bank (SARB) inflation target band of 3% to 6% and
our forecast is for an annual average of 5.1% in 2018. The risk to the inflation
number stems from the potential for exchange rate volatility as well as the impact of
South African GDP growth for the third quarter was an annualised 2.0% year-onyear
following an upwardly revised 2.8% in the second quarter. If one excludes
agriculture, the economy grew at a much slower rate of 1.1%. The momentum in the
primary sector has been relatively more robust, averaging 15% for the first three
quarters of the year, while the secondary sector grew at 0.2% and the tertiary sector
contracted by 0.2%. Only two sectors of the economy were positive for the first
three successive quarters of 2017, with agriculture being the one and mining and
quarrying the other. The numbers show that household consumption expenditure
has been holding up relatively well. Also encouraging is that there was a rebound in
gross domestic fixed investment - driven by both the public and private sectors. The
economic growth trends remain concerning and growth momentum has relied on the
volatile primary sector while the more stable tertiary sector has been weakening.
Finance Minister Malusi Gigaba delivered his maiden Medium-Term Budget Policy
Statement (MTBPS) during October. The Minister noted that the economic growth
outlook for South Africa has been downwardly revised and the primary deficit was no
longer forecast to narrow, resulting in an escalating debt ratio. It was indicated that
longer forecast to narrow, resulting in an escalating debt ratio. It was indicated that
National Treasury will increase its borrowings in the international market and also
increase issuance locally to fund the higher borrowing requirements. The MTBPS
stated that a team of cabinet ministers will develop proposals to ‘stabilise the
national debt over the medium term’, including proposals to narrow the deficit and
try to ensure the expenditure ceiling is adhered to. It was also noted that asset sales
are being considered over and above additional fiscal consolidation measures,
including expenditure cuts and revenue raising measures which are to be presented
in the 2018 Budget. South African bonds were punished in response to the MTBPS
with local bond yields trading higher. Offshore investors started offloading South
African bonds and the rand also weakened substantially. The All Bond Index lost
2.3% during October as the South African 10-year government bond yield ended the
month 54 basis points higher. In contrast, the JSE hit a record high on the back of
the weaker rand.
South Africa has seen a marked deterioration in the sovereign credit ratings of the
country’s local and foreign currency debt from all three major credit rating agencies
during the last few years. There were further downgrades during the last quarter of
2017 and the potential for another downgrade looming in the first quarter of 2018.
On the scheduled review date on 24 November, S&P announced that they
downgraded South Africa’s local currency debt to a non-investment grade level of
BB+, the highest junk rating. They also lowered South Africa’s foreign currency debt
rating by one notch to BB, putting it deeper into junk territory. On the same day,
Moody’s issued an update saying they have not changed their South African
sovereign debt rating but put it on review for a downgrade, which is due within 90
days of the announcement. This gives them the opportunity to incorporate the
numbers from the National Budget into their assessment, which is due to be tabled
in February 2018. Moody’s indicated that they would downgrade the credit rating if
their review finds that South Africa’s economic, institutional and fiscal strength
continues to weaken. Also, if measures to address the funding gaps are inadequate
or if there is not enough progress on structural reforms it would reinforce a negative
sign regarding the strength of South Africa’s institutions and government’s
effectiveness - all of which result in an environment which is not conducive to
investment and growth. Moody’s has both the local and foreign currency rating at
Baa3, the lowest investment-grade rating. Also on the sovereign rating front during
November, Fitch Ratings affirmed South Africa's rating at BB+ with a stable outlook.
Fitch noted that South Africa's ratings are weighed down by low growth, sizeable
government debt and contingent liabilities as well as deteriorating governance
standards. They did, however, note that these weaknesses are balanced by a
favourable government debt structure, deep local capital markets and a flexible
exchange rate, which helps to absorb external shocks.
The last quarter of the year also had its fair share of local political events. During
October, President Zuma implemented his second cabinet reshuffle for the calendar
year. Some of the ANC’s top officials said they were not consulted in the decisions.
The changes included the Higher Education Minister Blade Nzimande being fired
and a further six changes to the Cabinet. The ANC’s national conference was held
during December with most of the country keeping a keen eye on the race for who
would be the next party president, with the frontrunners being Nkosazana DlaminiZuma
and Cyril Ramaphosa. In the end, Cyril Ramaphosa was elected as the ANC’s
next president with the top six positions in the ANC’s National Executive Committee
(NEC) being an even split between those aligned to Ramaphosa versus those who
are more loyal to President Zuma. The composition of the entire NEC suggests that
there might be a bit more broader support for Mr Ramaphosa.