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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.
Cumulative Growth Over Time
Minimum Disclosure Document (Fund Fact Sheet)
Performance Fees FAQ
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.
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 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.
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
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 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
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.
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