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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: R6 798.5 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 | Monthly: R500
Total Expense Ratio (TER): 0.92%
Launch Date: 03 Nov 2016
Fund Size: R6 798.5 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%

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 Annualised Investment Performance

Performance

Annualised as at 31 Jan 2017 on a rolling monthly basis
Retail Class Fund (%) Benchmark (%)
1 year 9.4 8.47
3 year 8.03 7.65
5 year 7.27 7.37
10 year 8.47 8.23

Annualised return is the weighted average compound growth rate over the period measured
Actual highest and lowest annual figures for rolling 10 years
Highest Annual % 13.64
Lowest Annual % 4.95

Minimum Disclosure Document (Fund Fact Sheet)

Performance Fees FAQ

Illustrative Annualised Investment Performance

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

Source of graph : Morningstar

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 in the table above is a graphical representation of your selection (of the benchmark's past performance of the fund you selected) – including your investment objective, risk profile and fund choice – and is based on the past performance of the fund in relation to your investment. This performance is indicative and not guaranteed. The graph is for illustrative purposes only and investment performance is calculated by taking into account initial fees and all ongoing fees that you have to pay and the income reinvested on the reinvestment date.

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. Investec F/R 310717 1.55%
2. R186 RSA 10.50% 211226 1.55%
3. CAP Sett Acc SACTIV 1.28%
4. Standard Bank F/R 01032017 1.28%
5. FirstRand F/R 051217 1.22%
6. Standard Bank F/R 250417 1.19%
7. Standard Bank F/R 190617 1.15%
8. FirstRand F/R 020218 1.13%
9. Nedbank F/R 04052021 1.13%
10. Standard Bank F/R 110918 1.12%
Cash And Money Market Assets
Inflation Linked Bonds
Property
Bonds 12+ years
Bonds 7 - 12 years
Bonds 3 - 7 years
Bonds 0 - 3 years
1. Investec F/R 310717 1.55%
2. R186 RSA 10.50% 211226 1.55%
3. CAP Sett Acc SACTIV 1.28%
4. Standard Bank F/R 01032017 1.28%
5. FirstRand F/R 051217 1.22%
6. Standard Bank F/R 250417 1.19%
7. Standard Bank F/R 190617 1.15%
8. FirstRand F/R 020218 1.13%
9. Nedbank F/R 04052021 1.13%
10. Standard Bank F/R 110918 1.12%
Cash And Money Market Assets
Inflation Linked Bonds
Property
Bonds 12+ years
Bonds 7 - 12 years
Bonds 3 - 7 years
Bonds 0 - 3 years

Philip Liebenberg

Head of Absolute Returns – Sanlam Investments

As Head of Absolute Returns Phillip currently manages all Sanlam Investments flexible income portfolios, including the Active Income Fund. He first joined Sanlam Investments in 2005 as Senior Quantitative Analyst in the fixed interest team and was responsible for quantitative analytics and specialist fixed interest portfolios.

Before joining Sanlam Investments, Philip worked at RisCura where his responsibilities included quantitative analysis and consulting to pension funds and asset managers. He also gained experience at Kagiso Asset Management as a Portfolio Manager. He started his working career at BHP Billiton as a Production Engineer.

Philip is a Chartered Financial Analyst (CFA) and holds B.Eng. and M.Eng degrees from Stellenbosch University, as well as a Ph.D. (Chemical Engineering) from the University of Melbourne.

Philip Liebenberg

As Head of Absolute Returns Phillip currently manages all Sanlam Investments flexible income portfolios, including the Active Income Fund. He first joined Sanlam Investments in 2005 as Senior Quantitative Analyst in the fixed interest team and was responsible for quantitative analytics and specialist fixed interest portfolios.

Before joining Sanlam Investments, Philip worked at RisCura where his responsibilities included quantitative analysis and consulting to pension funds and asset managers. He also gained experience at Kagiso Asset Management as a Portfolio Manager. He started his working career at BHP Billiton as a Production Engineer.

Philip is a Chartered Financial Analyst (CFA) and holds B.Eng. and M.Eng degrees from Stellenbosch University, as well as a Ph.D. (Chemical Engineering) from the University of Melbourne.

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%

On 29 July the SIM Absolute Return Income Fund merged with the SIM Active Income Fund.

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

In April 2016 African Bank’s curatorship effectively ended. The old African Bank (ABIL) was split into a ‘good’ (ABK) and ‘bad’ (RDS) bank. 80% of all senior unsecured exposure to ABIL was rolled into instruments issued ABK, while a 10% cash repayment was received and 10% of nominal exposure remains in RDS. The ABK bonds will receive interest at the same rate as previous ABIL instruments and start to mature after a 2 year interest-only period. Recovery expectations w.r.t the 10% exposure in RDS is low at this stage, although recent results from African Bank were more positive than expected.

Total Expense Ratio (TER) | PERIOD: 1 July 2013 to 30 June 2016
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) | 0.01% 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) | 0.93% 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

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%

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 year 2016 will be remembered for a few big geopolitical surprises, namely Brexit and the election of Donald Trump as US president. Both of these events were largely driven by populism and protectionism. One could call it the ‘revenge of the middle class’. The election of Donald Trump led to a sharp increase in US treasury yields (and global yields) as markets priced in possible fiscal stimulus from the US, deregulation and a possible increase in trade barriers. We saw a global sell-off in previously loved asset classes like property and bonds, while value stocks started to outperform substantially in the aftermath of the US election results.

On the domestic front we had to deal with ongoing political infighting, which led to frequent bouts of currency volatility. We started 2016 dealing with the aftermath of the ‘Nenegate’ episode and a weak currency. Fortunately, South Africa managed to retain its investment grade rating for the time being. The rand recovered some lost ground over the course of the year and closed at R13.68/$ from R15.49/$ the previous year. This off course affected all portfolios with offshore exposure significantly and reminded investors that the rand is not always a one-way bet, unlike the previous couple of years. One could argue that stabilising growth in China and significant infrastructure spend from the US will support commodity prices and hence currencies like the rand; the counter argument could be that rising global yields might exert a bit more pressure on emerging market currencies as a whole.

We maintain that we are close to the top of the domestic tightening cycle with the repo rate at 7%. Hopefully we’ll also get some reprieve from a slowdown in especially food inflation during the course of the year. The 10-year RSA bond yield closed the year at 8.92%, down from 9.69% at the beginning of 2016. Nominal bonds had a fantastic year following the terrible 2015 and posted an annual return of 15.5%. Inflation-linked bonds returned +6.3% for the year, while cash delivered +7.4% for the year. Property posted a decent +10.2% for the year with most of it recorded during December (+4.3%).

What we did

Over the quarter the overall fund duration stayed fairly constant at about one year with little changes between the different fixed-income asset classes. We continued the process of yield enhancement although corporate credit looks expensive relative to bank credit spreads. Our clear preference for fixed-rate negotiable certificates of deposit (NCDs) and nominal bonds over inflation-linked bonds paid dividends over the calendar year, although, admittedly, we started 2016 at very attractive nominal yield levels. The fund comfortably exceeded the targeted return for the calendar year after a more testing 2015.

Our strategy

As stated last quarter, South African fixed-income assets remain attractive as an investment case, despite very good 2016 performances. Real yields of between 2% and 3% are still on offer in the fixed-income space with the yield of the fund comfortably approaching 9%. Although breakeven inflation levels have come down from the first-quarter levels, we still prefer nominal bonds over inflation-linked bonds over the medium term. Some of the possible headwinds for the local fixed-income market could be rising global inflation expectations, rising global bond yields and currency weakness from unexpected political surprises. On balance, we prefer to add to the overall portfolio risk, given the general favourable valuations.

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