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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
Minimum Disclosure Document (Fund Fact Sheet)
Performance Fees FAQ
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.
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.
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
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
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 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%).
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.
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.