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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 267.5 million
Benchmark: STeFI+1% p.a.
Time Horizon: 1 - 2 years
*As at 31 August 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 267.5 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%
*As at 31 August 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.


Cumulative Growth Over Time

Performance

Annualised Total Return as at 31 August 2017 on a rolling monthly basis
Retail Class Fund (%) Benchmark (%)
1 year 8.98 8.63
3 year 8.02 8.01
5 year 7.40 7.30
10 year 8.50 8.40

Annualised return is the weighted average compound growth rate over the period measured
Highest and lowest annual returns over since inception
Highest Annual % 14.27
Lowest Annual % 5.51

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 and Sanlam Investments

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. STDB0670 Bond Cash SACTIV 3.82%
2. HSBC CALL (SIM) 2.47%
3. Investec F/R 310717 1.56%
4. R186 RSA 10.50% 211226 1.25%
5. FirstRand F/R 051217 1.21%
6. Standard Bank F/R 19052022 1.18%
7. FirstRand F/R 020218 1.10%
8. Standard Bank F/R 110918 1.09%
9. FirstRand F/R 040917 1.07%
10. ABSA F/R 160717 1.05%
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. STDB0670 Bond Cash SACTIV 3.82%
2. HSBC CALL (SIM) 2.47%
3. Investec F/R 310717 1.56%
4. R186 RSA 10.50% 211226 1.25%
5. FirstRand F/R 051217 1.21%
6. Standard Bank F/R 19052022 1.18%
7. FirstRand F/R 020218 1.10%
8. Standard Bank F/R 110918 1.09%
9. FirstRand F/R 040917 1.07%
10. ABSA F/R 160717 1.05%

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 April 2014 to 31 March 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) | 0.01% 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.

Total Expense Ratio (TER) | PERIOD: 1 April 2014 to 31 March 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) | 0.01% 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%. 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%.
  • 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 effects of the local political developments continued to play out during the second quarter following the replacement of the South African finance minister and his deputy amid a Cabinet reshuffle by the President towards the end of March. This resulted in local bond yields and the rand trading significantly weaker towards the end of the first quarter. Yields subsequently strengthened again during the following months on the back of global capital flows towards emerging markets, including South Africa. Local yields weakened in the last week of June on the back of international bond yields trading higher with local rates following along. South Africa’s sovereign credit rating was downgraded by all three of the major credit rating agencies during the second quarter, following shortly on the heels of the political developments in March. S&P downgraded South Africa’s credit rating early in April. They downgraded the local currency rating from BBB to BBB- and the foreign currency rating to BB+ from BBB- with a negative outlook. Also in April, Fitch downgraded both the local currency and foreign currency ratings to BB+ with a stable outlook. In June, following a visit to South Africa, Moody’s downgraded both the local currency and foreign currency credit rating to Baa3 from Baa2 while keeping their negative outlook. The key underlying drivers noted by the agencies for the downgrades were mainly threefold: firstly, the weakening of South Africa's institutional framework, as highlighted by the political changes and potential implications for policy considerations going forward. Secondly, the weak economic growth outlook with few identifiable and credible policy endeavours to address this, as well as disappointing progress on structural reforms. Thirdly, the continued deterioration of the fiscal outlook on the back of rising public debt levels as well as contingent liabilities.

South Africa’s sovereign downgrade also led to downgrades in the state-owned enterprises (SOEs) due to the combination of the government being the main shareholder and also macroeconomic concerns. The credit ratings of most of the SOEs were aligned with the government’s local and foreign currency ratings, with the exception of Eskom, which has a rating of B+ by S&P for both the local currency as well as the foreign currency rating with a negative outlook - a reflection of the rating agency’s view that Eskom’s has a very poor standalone credit profile. A similar principle was applied to the banks with their view that the government has a decreased ability to provide support to the local financial institutions and in particular the banking entities. The four largest banks in South Africa are now rated sub-investment grade by Fitch and S&P on the foreign currency rating, however they still carry investment grade ratings from Moody’s. Fitch has a BB+ foreign currency rating for all four of the largest banks as well as their holding companies, the same level as the South African sovereign rating. S&P rates FirstRand Bank, Nedbank and Investec Bank at BB+ due to their bank ratings being capped at the same level as the foreign currency rating of the sovereign. Moody’s downgraded the five largest banks (Absa Bank, FirstRand Bank, Investec Bank, Nedbank, and Standard Bank) to Baa3/negative in line with the sovereign. The only rating that Moody’s has on group level, Standard Bank Group, was dropped to Ba1. Adcorp released disappointing FY:17 results during May, which saw lacklustre revenue growth and a significant increase in gearing with an accompanied increasing debt/EBITDA ratio. Adcorp was put on review for downgrade by GCR earlier in May and was subsequently downgraded with the national scale rating being downgraded from BBB to BBB- while the senior secured rating was downgraded from A to BBB+. They expressed concern regarding the pressure on Adcorp’s earnings, which has the potential to impact the EBITDA Interest Cover Ratio even further.

The financial results of African Bank released for the six months ended March 2017 appear to show that credit risk remains controlled, however the weak economic environment would limit the potential for growth and new initiatives still have to get off the ground. S&P revised their outlook on African Bank from negative to stable noting that the rating changes were on the back of better than expected earnings as well as improvement in African Bank's capitalisation. The earnings outlook remains on the low side and with the bank's balance sheet mainly wholesale-funded it would be more susceptible to investor confidence levels and economic weakness. Primary market credit auctions received strong support during the second quarter, in particular during May and June after issuance almost halted during April on the back of the local political events and South African credit rating downgrades - with locals opting on the side of caution given the uncertainties. During May and June, the large banking entities issued senior paper and received strong support, while Santam and Bidvest also had very successful auctions, which were strongly supported (and over- subscribed) by the market with spreads clearing at strong levels.

SIM strategy

Credit spreads have been widening since the second half of 2014 and during the last two years we have been able to identify opportunities for the Fund which offer significant value. Spreads in the secondary market have been trending higher over this period and in particular new issuances in the primary market have been pricing at levels which offer value compared to previous years. More recently, spreads in some sectors have been coming in, but the overall trend remains largely sideways. After a strong first quarter of issuance, primary market issuance pulled back sharply in April on the back of the local uncertainty, sovereign and other local credit rating downgrades. Issuance subsequently recovered during May and June with a number of good quality issuers coming to the market and investor appetite for paper very strong. We invested for the Fund in some of these opportunities during the quarter using a combination of inflows and portfolio liquidity to finance the purchases. We used the opportunity to align the Fund in favour of more attractive opportunities and a more conservative positioning given the local and market outlook.

We have been more cautiously positioned in the Fund for some time and continued to implement a more measured interest rate investment strategy. The short to medium area of the yield curve, in particular, was trading stronger while the uncertainties continued to increase on the local outlook and policy front. The positioning of the Fund worked well towards the end of the quarter as it was relatively more insulated from the subsequent weakness during the last week of the month.

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