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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 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.
Advice fee | Any advice fee is negotiable between the client and their financial advisor. An annual
advice fee negotiated is paid via a repurchase of units from the investor.
Total Expense Ratio (TER) | PERIOD: 01 January 2015 to 31 December 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 year was off to a strong start as international markets continued to power ahead
during January. International equity market indices as well as the local FTSE/JSE All
Share Index closed at record highs during the first month of the new year. The
positive start to the year subsequently reversed during February as a global stock
market sell-off ensued with headwinds from multiple fronts. Volatility levels
increased with measures such as the CBOE Volatility Index (VIX) also finally giving
way; after being at exceptionally low levels during most of 2017, the index increased
substantially and with its own associated volatility subsequently remaining at more
elevated levels for the rest of the quarter. The correction in global equity markets
was accompanied by a sharp increase in realised and expected equity volatility
levels. Volatility in other asset markets remained more subdued with implied volatility
levels across a broader range of asset classes still below longer-term average
The expectations of stronger economic growth and rising inflation initially pushed
bond yields higher during the first two months of the quarter, with US 10-year
government bond yields starting the year at 2.4% and trading above 2.9% during the
second half of February. The trend turned around during February and yields traded
lower for the remainder of the quarter, spurred by economic data releases and also
as trade tensions between the US and China intensified, with the perceived safety of
government bonds playing to the strength of these yields.
The international pickup in asset class volatility was not seen in local bonds, which
continued to power ahead almost relentlessly during the first quarter. Local yields
continued on their march downward, shaking off international headwinds and
instead taking cue from the positive developments on the local front. Locally, almost
all fundamental factors seemed to favour local bonds during the quarter - political
developments, fiscal policy, monetary policy as well as the inflation numbers all
played in favour of local interest-bearing assets during the quarter. Local bonds had
one of their strongest quarters on record and looking back towards the end of last
year, the South African 10-year government bond yield ended the first quarter
almost 140 basis points stronger compared to the highs seen in November 2017.
Local inflation continued to ease during the first quarter with headline CPI slowing
more than most expectations. Local CPI printed at 4.0% year-on-year (y/y) in
February, from 4.4% y/y in January 2018. Goods and services respectively slowed
to 3.2% y/y and 4.9% y/y in February from 3.7% y/y and 5.1% y/y in January.
However, CPI excluding food, non-alcoholic beverages, petrol and energy was
unchanged at 4.1% y/y in February. This also marked the trough in the current
disinflation cycle. We expect the 1.0% VAT increase announced in the February
Budget to add roughly 0.5% to headline CPI over the next 12 months, beginning in
April 2018. We expect headline CPI to remain contained within the SA Reserve
Bank (SARB)’s 3-6% inflation target band over the next two calendar years. Our
forecast is based on the assumptions that rand depreciation is in line with long-term
inflation differentials and that international oil prices remain relatively stable around
current levels. We expect a pickup in headline CPI during the second quarter given
that it is bottoming during the first quarter of 2018. Overall, we expect inflation to
remain relatively contained within the target band and that a lower than expected
inflation outcome could provide support for the SARB to ease the policy rate further.
The quarter was once again quite something on the political front, filled with a
number of positive developments. On 13 February the National Executive
Committee (NEC) of the ANC recalled Jacob Zuma as president of South Africa. At
the eleventh hour the next day he resigned with immediate effect and on 15
February Cyril Ramaphosa became the fifth democratic president of the Republic of
February Cyril Ramaphosa became the fifth democratic president of the Republic of
South Africa. Both the rand as well as local bonds subsequently strengthened even
further. The newly elected president finally delivered the delayed State of the Nation
(SONA) address on 16 February in which he demonstrated an intent and willingness
to address the country’s challenges and issues. Although the speech did not include
specific details, it provided enough indications that there is intent to implement a
framework of good governance, clearer policy direction, growing the economy and,
importantly, rooting out corruption. By the end of the month a number of Cabinet
changes were also announced, with changes to 24 of the 38 ministers, while also
restoring Nhlanhla Nene as minister of finance.
The much-anticipated South African Budget for 2018/19 was delivered during
February. National Treasury managed to deliver on its promised fiscal consolidation
with the future path for the primary budget balance improving from a deficit of -1.2%
of GDP in 2017/18 to 0% of GDP by 2020/21. This results in a much lower increase
in the debt ratio than previously indicated - to 56% of GDP by 2020/21 with net debt
at 52.2% of GDP. It is important to remember that this relies on Treasury’s projected
increase in real GDP growth and its ability to maintain a relatively subdued interest
rate on government debt. One of the main features of the Budget was the decision
to raise the VAT rate by 1% with resulting additional income of R23 billion to the
fiscus in the upcoming financial year. Together with another increase in the fuel levy
and excise duty increases in excess of inflation it means the dominant share of the
additional R36 billion collected in taxes in 2018/19 will come from indirect taxes. VAT
is widely considered a regressive tax since low income earners spend a larger
portion of their income on consumption. However, given zero ratings and exclusions
the tax is arguably mildly regressive or even progressive. Treasury has re-affirmed
its intention to stabilise its debt ratio, but its track record has been dented in 2017/18
with the deterioration in the primary budget balance to -1.2% of GDP, from -0.5% of
GDP in 2016/17. It needs to re-establish this record in the fiscal year ahead. On
balance, the risks associated with government finance have eased but have not
been eliminated entirely. If Treasury makes good on the intentions in this Budget,
then South Africa may have seen the worst of its fiscal deterioration.
During March, Treasury announced that the weekly auction levels for both fixed and
inflation-linked bond auctions will be decreased. The announcement was made on
the back of the February Budget, which noted that borrowing requirements are set to
decline and thus leading to a reduction in auction levels. Nominal bond auctions will
decrease by R900 million (from R3.3 billion to R2.4 billion) and inflation-linked bond
auctions will decrease by R300 million (from R900 million to R600 million). Real
yields as well as nominal yields reacted positively and strengthened further following
Fears of a potential credit rating downgrade of the South African government by
Moody’s also subsided on the back of the positive developments during the quarter.
This subsequently turned out to be right; Moody’s announced towards the end of
March that they decided to keep their rating of South Africa on hold and even
upgraded the outlook for South Africa’s government debt to stable. They noted that
their rating and outlook reflect their view that the previous weakening of South
Africa's institutions could gradually reverse under a more transparent and
predictable policy framework. In their view, a sustained recovery in the country’s
institutions could gradually support a corresponding recovery in the economy along
with a stabilisation of fiscal strength.