The information on the Adviser and Institutional areas of this site have been tailored for investment professionals. Appropriate product, fund and service information
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.
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.
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 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
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.