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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.

Fund Summary*

Sanlam Investment Management (SIM) Active Income Fund

Launch Date: 03 November 2006
Fund Size: R7 019.3 million
Benchmark: STeFI+1% p.a.
Time Horizon: 1 - 2 years
*As at 30 April 2018
 
Risk Profile: Conservative
Fund Classification: SA - Multi Asset - Income
Min Investment Amount: Lump sum: R10 000 | Monthly: R500
Total Expense Ratio (TER): 0.92%
Fees: View Fees
Launch Date: 03 Nov 2016
Fund Size: R7 019.3 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%
Fees: View Fees
*As at 30 April 2018

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.


Illustrative Cumulative Growth of an investment of R100

Performance

Annualised Total Return on a rolling monthly basis
(as at 30 April 2018)
Retail Class Fund (%) Benchmark (%)
1 year 8.32 8.43
3 year 8.17 8.23
5 year 7.52 7.64
10 year 8.64 8.54

Annualised return is the weighted average compound growth rate over the period measured
Highest and Lowest Annual Returns over 10 years
Highest Annual % 15.8
Lowest Annual % 5.91

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 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.

1. HSBC CALL (SIM)1.67%
2. FirstRand F/R 020920221.42%
3. FNB Call1.17%
4. Nedbank NCD 8.4% 110920181.13%
5. FirstRand NCD 9.34% 181220181.09%
6. Standard Bank F/R 1109181.09%
7. R209 RSA 6.25% 3103361.08%
8. ABSA F/R 101120201.04%
9. Standard Bank NCD 8.4% 090720181.04%
10. FirstRand F/R 240520221.02%
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. HSBC CALL (SIM)1.67%
2. FirstRand F/R 020920221.42%
3. FNB Call1.17%
4. Nedbank NCD 8.4% 110920181.13%
5. FirstRand NCD 9.34% 181220181.09%
6. Standard Bank F/R 1109181.09%
7. R209 RSA 6.25% 3103361.08%
8. ABSA F/R 101120201.04%
9. Standard Bank NCD 8.4% 090720181.04%
10. FirstRand F/R 240520221.02%

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.) 1.15%
Manager initial fee N/A
Advice annual fee (max.) 1.15%
Manager annual fee 0.91%
Total Expense Ratio (TER) 0.92%

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.

When you invest online

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

  • 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 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 levels.

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 the announcement.

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.

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