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Skip Navigation LinksCore Funds

Sanlam Investment Management Active
Income Fund

When you rely on your investment to provide you with a regular, stable income you cannot afford to take on too much risk, but you need some share exposure for your income to keep up with inflation over time.

Quick Facts About The Fund*

Sanlam Investment Management (SIM) Active Income Fund

Launch Date: 03 November 2006
Fund Size: R7 359.2 million
Benchmark: STeFI+1% p.a.
Time Horizon: 1 - 2 years
*As at 31 October 2017
Risk Profile: Conservative
Fund Classification: SA - Multi Asset - Income
Min Investment Amount: Lump sum: R10 000 | Monthly: R500
Total Expense Ratio (TER): 0.92%
Launch Date: 03 Nov 2016
Fund Size: R7 359.2 million
Benchmark: STeFI+1% p.a.
Time Horizon: 1 - 2 years
Risk Profile: Conservative
Fund Classification: SA - Multi Asset - Income
Min Investment Amount: Lump sum: R10 000 l Monthly: R500
Total Expense Ratio (TER): 0.92%
*As at 31 October 2017

Fund Strategy

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

Performance

Annualised Total Return on a rolling monthly basis
(as at 31 October 2017)
Retail Class Fund (%) Benchmark (%)
1 year 8.37 8.60
3 year 7.92 8.07
5 year 7.42 7.43
10 year 8.29 8.27

Annualised return is the weighted average compound growth rate over the period measured
Highest and Lowest Annual Returns over 10 years
Highest Annual % 13.40
Lowest Annual % 6.52

Minimum Disclosure Document (Fund Fact Sheet)

Performance Fees FAQ

Cumulative Growth Over Time

Sanlam Investment Management (SIM) Active
Income Fund
STeFI +1%

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. FirstRand F/R 02092022 2.72%
2. HSBC CALL (SIM) 1.58%
3. FirstRand F/R 051217 1.56%
4. FirstRand F/R 020218 1.44%
5. Nedbank Call Account 1.23%
6. R186 RSA 10.50% 211226 1.22%
7. Standard Bank F/R 19052022 1.19%
8. Nedbank F/R 11042018 1.15%
9. FirstRand NCD 9.34% 18122018 1.08%
10. Nedbank NCD 8.4% 11092018 1.04%
Cash And Money Market Assets
Inflation Linked Bonds
Property
Bonds 12+ years
Bonds 7 - 12 years
Bonds 3 - 7 years
Bonds 0 - 3 years
Bond Cash
1. FirstRand F/R 02092022 2.72%
2. HSBC CALL (SIM) 1.58%
3. FirstRand F/R 051217 1.56%
4. FirstRand F/R 020218 1.44%
5. Nedbank Call Account 1.23%
6. R186 RSA 10.50% 211226 1.22%
7. Standard Bank F/R 19052022 1.19%
8. Nedbank F/R 11042018 1.15%
9. FirstRand NCD 9.34% 18122018 1.08%
10. Nedbank NCD 8.4% 11092018 1.04%

Melville du Plessis

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.

Melville du Plessis

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.

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

A1-Class (%)

Advice initial fee (max.) 1.14%
Manager initial fee N/A
Advice annual fee (max.) 1.14%
Manager annual fee 0.91%
Total Expense Ratio (TER) 0.92%

Sanlam Reality members may qualify for a discount on the Manager annual fee.

Please note that African Bank (ABL) has had a name change to African Phoenix Investments Ltd (AXL), with the effective date being 01/02/17. The suspension of the bank has been lifted.

Total Expense Ratio (TER) | PERIOD: 1 July 2014 to 30 June 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.

When you invest online

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

  • No initial account set-up fees – usually charged at 2%.
  • 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

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.

Market review

The third quarter of 2017 marked the ten-year anniversary of the start of the global financial crisis, generally agreed to have started during August 2007 with a series of credit shocks and leading to an international banking crisis. The economic downturn that followed was one of the worst recessions in decades in many global economies.

Reflecting back on the last decade, we have seen unprecedented economic policies being implemented. Expansionary fiscal policies were implemented in an effort to avert a repeat of the prolonged deep recessions and high unemployment rates which were seen in the 1930s. The increased levels of spending combined with lower economic growth levels have led to higher government debt levels worldwide. On the other hand we have also seen the use of unconventional monetary policy measures, with exceptionally low and even negative interest rates in some developed markets as well as quantitative easing policies implemented by a number of major economies, including the United States, United Kingdom, Europe and Japan. Global trade and global growth levels retreated sharply during the 2007 to 2008 global financial crisis. Since then, global growth levels have recovered to historical norms albeit below trend growth levels, while global trade has remained below pre-crisis levels. The higher growth rates have not been accompanied by higher inflation despite the expansionary monetary policy measures being implemented as wage growth has remained sluggish while corporate profits continued to rise. This has helped fuel political instability in many major economies worldwide. Global financial markets have performed well with global equity markets posting new all-time highs on a frequent basis. The financial and banking sectors have been left behind and underperformed equity markets in general while a number of technology stocks delivered phenomenal returns to those investors who were willing to hold on. Global bond markets have also delivered stellar performance over the last decade as the sustained downward trend in interest rates have resulted in healthy total returns. The world economy and financial markets have grown accustomed to the support of central banks’ accommodative policies and we are still to see the impact if they are adjusted or normalised going forward. The question remains to what extent these lower interest rates and accommodative monetary policies have resulted in inflated asset prices elsewhere in the financial system.

Taking a look at the third quarter of 2017 it was marked by strong performance and new all -time highs in global equity markets, with volatility measures still at all-time lows despite geopolitical tensions and the threat of central bank normalisation looming. One of the central themes in financial markets towards the end of the third quarter was the potential unwinding of monetary stimulus in the United States and Europe going forward. Global and local 10-year government bond yields started the quarter at elevated levels following hawkish comments from the Fed in the United States and the European Central Bank in Europe. We subsequently saw yields trend lower during July and August until they gave back their gains and global bond yields moved upwards again during September, with local yields following suit.

The South African Reserve Bank’s (SARB) Monetary Policy Committee (MPC) surprised the market by cutting the repo rate by 25 basis points to 6.75% at their scheduled meeting in July. The vote was split four to two, with four members voting in favour of an interest rate cut. The SARB made unexpectedly large downward adjustments to their inflation forecasts and this was one of the main drivers for the decision. Most market participants subsequently expected the SARB to cut interest rates at one of the next scheduled meetings in either September or November. However the Bank surprised again by keeping the repo rate unchanged at their meeting in September, accompanied by a particularly hawkish statement highlighting the risks that sovereign credit rating downgrades pose combined with fiscal slippage concerns. The surprise move and accompanying communication highlighted the unusual nature of the current local conditions and their influence on monetary policy. The current cutting cycle is proving to be very gradual and measured. The decision in September was split equally, with three members in favour of a policy rate cut and three against.

Headline CPI decelerated to 4.6% year-on-year in July from 5.1% year-on-year in June and marked the fourth month that headline inflation remained contained within the SARB’s inflation target band of 3-6%. Core CPI eased to 4.7% year-on-year in July from 4.8% year -on-year in June. Similarly, producer inflation drifted lower to 3.6% year-on-year in July from 4.0% year-on-year in June. Headline CPI subsequently inched up to 4.8% year-onyear in August. With relatively fewer items surveyed in August, the uptick in inflation was largely on the back of the petrol price increase combined with base effects. We expect core inflation to remain relatively contained for the remainder of the year and inflation to bottom in the first quarter of 2018. The upside risks to the inflation profile stem from the potential for higher electricity tariffs, as well as unfavourable political outcomes, which could lead to a weaker rand.

Local yields started the quarter at elevated levels with the yield on South African government bonds touching 9% at the beginning of the third quarter. Local yields subsequently traded stronger during July, August and the first half of September before reversing the trend towards the end of September. This was due to local interest rates reacting to the hawkish comments from the United States Fed in addition to the SARB surprising the market by coming out with their own hawkish statement and keeping the repo rate unchanged, while the market was expecting a relatively strong probability of a policy rate cut. One could have expected that positive bond market fundamentals would have been more supportive given the contained inflation and good trade numbers. However, local nominal yields traded significantly higher during the last two weeks of the month. Local nominal bonds still delivered good returns for the third quarter, outperforming inflation-linked bonds and cash with the longer end of the nominal yield curve being the best performing sector.

South African gross domestic product (GDP) growth momentum recovered during the second quarter, from a technical recession during the first quarter. The growth rate climbed to 2.5% in the second quarter following -0.6% in the first quarter and -0.3% in the fourth quarter of 2016. Annualised real GDP growth improved marginally to 1.1% in the second quarter from 1.0% in the first quarter. The recovery is on the back of the combination of the fading impact of severe drought, favourable terms of trade, improved global growth, retreating domestic inflation and a weak base. Most of the sectors were in positive territory with agriculture and electricity accelerating to 33.6% and 8.8% respectively. Finance, transport, manufacturing and personal services increased to 2.5%, 2.2%, 1.5% and 1.1% respectively. Wholesale and retail increased to 0.6% from -5.9% in the first quarter of 2017. Construction and general government services were in negative territory for the quarter, declining to -0.5% and -0.6% respectively. Leading indicators suggest some growth this year, albeit at a modest pace. Overall, we are still expecting sub trend growth of around 0.75% in 2017 and 1.25% in 2018 with policy uncertainty and weak confidence levels tilting risks to the downside. The low grow rate and weak fixed investment spending are weighing on the labour market. The country needs stronger and labour-absorbing economic growth to bring down the high unemployment rate on a sustained basis. Stats SA released the second quarter unemployment statistics after a delay in publishing them, with the unemployment rate unchanged at 27.7% in the second quarter, still the highest level since 2004.

On the political front, there was a motion of no confidence vote against President Zuma - the eighth one which he has faced since taking office in 2009. After a significant build up to the event, the motion was eventually rejected with 198 votes against compared to 177 in favour of it, with nine abstaining. This was the result generally expected by most political analysts. But the margin of votes in favour was higher than many had anticipated. The local politics did not have the same dominant effect on local financial market moves as it was more muted during the third quarter compared to the previous few years. However, the political and policy uncertainty is still a material risk for both the medium- to longer-term outlook and adds to the looming threat of the potential for further credit rating downgrades in the short to medium term.

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