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Sanlam Investment Management
Balanced Fund

You’ve heard it before: when it comes to investing, never put your shares in one basket. But how do you choose between different shares, listed properties, bonds and offshore assets? Wouldn’t it be great if a professional could choose the most promising assets for you?

Quick Facts About The Fund

Sanlam Investment Management (SIM) Balanced Fund

Launch Date: 01 February 1995
Fund Size: R15 779.9 million
Benchmark: Mean of the ASISA SA Multi Asset High Equity Category
Time Horizon: 3 – 5 years
Risk Profile: Moderate
Fund Classification: SA - Multi Asset - High Equity
Min Investment Amount: Lump sum: R10 000 | Monthly: R500
Total Expense Ratio (TER): 1.6%
Launch Date: 01 February 1995
Fund Size: R15 779.9 million
Benchmark: Mean of the ASISA SA Multi Asset High Equity Category
Time Horizon: 3 – 5 years
Risk Profile: Moderate
Fund Classification: SA - Multi Asset - High Equity
Min Investment Amount: Lump sum: R10 000 | Monthly: R500
Total Expense Ratio (TER): 1.6%

Fund Strategy

Typically this fund will hold a large weighting in JSE shares with a maximum equity exposure of 75%. Capital exposure will also include investments in money market instruments, bonds, listed property and up to 25% in offshore assets. Fund risk is lower than that of a pure equity fund. This portfolio may also invest in participatory interests of underlying unit trust portfolios.


Illustrative Annualised Investment Performance

Performance

Annualised as at 30 April 2017 on a rolling monthly basis
Retail Class Fund (%) Benchmark (%)
1 year 5.58 3.43
3 year 6.51 6.24
5 year 11.02 10.10
10 year 8.69 7.99

Annualised return is the weighted average compound growth rate over the period measured
Actual highest and lowest annual figures for rolling 10 years
Highest Annual % 28.20
Lowest Annual % -14.49

Minimum Disclosure Document (Fund Fact Sheet)

Performance Fees FAQ

Illustrative Annualised Investment Performance

Sanlam Investment Management (SIM)
Balanced Fund
(ASISA) South African Multi Asset High Equity

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.

1. Sanlam World Eq 13.62%
2. Naspers -N- 8.31%
3. SIM Enhanced Yield Fund Class B3 (D) 4.20%
4. Sanlam World Equity Tracker Fund Class I USD 3.84%
5. SIM Property Fund 3.51%
6. BTI Group 2.99%
7. Steinhoff Int Hldgs N.v 2.15%
8. Sasol 2.07%
9. MTN 1.99%
10. Sanlam Europe (ex UK) Equity Tracker Fund Class I 1.83%
Cash And Money Market Assets
International Assets
Equities
Bonds 3 - 7 Years
Bonds 0 - 3 Years
Bonds 12+ Years
Inflation Linked Bonds
Property
Bonds 7 - 12 Years
Preference Shares
Investment Products
1. Sanlam World Eq 13.62%
2. Naspers -N- 8.31%
3. SIM Enhanced Yield Fund Class B3 (D) 4.20%
4. Sanlam World Equity Tracker Fund Class I USD 3.84%
5. SIM Property Fund 3.51%
6. BTI Group 2.99%
7. Steinhoff Int Hldgs N.v 2.15%
8. Sasol 2.07%
9. MTN 1.99%
10. Sanlam Europe (ex UK) Equity Tracker Fund Class I 1.83%

Frederick White

Head - Balanced Funds

Over and above managing the SIM Balanced Fund, Fred has been the Head of Asset Allocation and Macro Research at Sanlam Investments since 2008. Up until then, he was Head of Resources, Strategy, and Process and Research. Fred holds an M.Eng from Stellenbosch University, is a qualified charted financial analyst (CFA) and obtained an MBA from Stanford University in 1996. Prior to joining Sanlam Investments, Fred held various roles at Investec Asset Management, including the Head of Resources.

Ralph Thomas

Ralph was appointed to his current role as portfolio manager in Balanced Funds in 2016. Ralph has more than 12 years of financial services experience specialising in multi-asset structuring. Before joining the Sanlam Group, Ralph was a director at Deutsche Bank AG (South Africa) and a senior manager at Standard Bank. Through prior roles, Ralph has gained extensive experience in trading, structuring, research and analysis across asset classes within global financial markets

Ralph holds a B.Business Science from the University of Cape Town, and obtained an MBA (cum laude) from University of Cape Town (GSB) in 2014.

Frederick White

Head - Balanced Funds

Over and above managing the SIM Balanced Fund, Fred has been the Head of Asset Allocation and Macro Research at Sanlam Investments since 2008. Up until then, he was Head of Resources, Strategy, and Process and Research. Fred holds an M.Eng from Stellenbosch University, is a qualified charted financial analyst (CFA) and obtained an MBA from Stanford University in 1996. Prior to joining Sanlam Investments, Fred held various roles at Investec Asset Management, including the Head of Resources.

Ralph Thomas

Ralph was appointed to his current role as portfolio manager in Balanced Funds in 2016. Ralph has more than 12 years of financial services experience specialising in multi-asset structuring. Before joining the Sanlam Group, Ralph was a director at Deutsche Bank AG (South Africa) and a senior manager at Standard Bank. Through prior roles, Ralph has gained extensive experience in trading, structuring, research and analysis across asset classes within global financial markets

Ralph holds a B.Business Science from the University of Cape Town, and obtained an MBA (cum laude) from University of Cape Town (GSB) in 2014.

Traditional Investing (When you invest via a Financial Adviser or other)

Retail Class (%)

Advice initial fee (max.) 3.42%
Manager initial fee N/A
Advice annual fee (max.) 1.14%
Manager annual fee 1.25%
Total Expense Ratio (TER) 1.60%

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.

Obtain a personalised cost estimate before investing by visiting www.sanlamunittrustsmdd.co.za and using our Effective Annual Cost (EAC) calculator. Alternatively, contact us at 0860 100 266.

The portfolio manager may borrow up to 10% of the market value of the portfolio to bridge insufficient liquidity. Fluctuations or movements in exchange rates may cause the value of underlying international investments to go up or down. This fund is also available via certain LISPS (Linked Investment Service Providers), which levy their own fees.

Sanlam Reality members may qualify for a discount on the Manager annual fee.

Total Expense Ratio (TER) | PERIOD: 2 January 2014 to 31 December 2016
Total Expense Ratio (TER) | 1.60% 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. Inclusive of the TER of 1.60%, a performance fee of 0.22% of the net asset value of the class of participatory interest of the portfolio was recovered.

Transaction Cost (TC) | 0.16% 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) | 1.76% of the value of the Financial Product was incurred as costs relating to the investment of the Financial Product.

Manager Performance Fee (incl. VAT) | Performance Fee Benchmark: Mean of the ASISA SA Multi Asset High Equity Category, Base Fee: 1.25%, Fee at Benchmark: 1.25%, Fee hurdle: Mean of the ASISA SA Multi Asset High Equity Category, Sharing ratio: 20%, Minimum fee: 1.25%, Maximum fee: 2.85%, Fee example: 1.25% p.a. if the fund performs in line with its Performance Fee benchmark being Mean of the ASISA SA Multi Asset High Equity Category.

The performance fee is accrued daily, based on performance over a rolling one year period with payment to the manager being made monthly. Performance fees will only be charged once the performance fee benchmark is outperformed and only if the fund performance is positive. A copy of the performance fee FAQ is available on www.sanlamunittrusts.co.za

When you invest online

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

  • No initial account set-up fees – usually charged at 2.28%.
  • 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

  • Total Annual Fee: 1.14%

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 first quarter of 2017 was quite a challenging one during which to manage a fund, due in large part to political developments. Internationally the Trump administration with it’s ‘wild card’ flavour just took control of the world’s largest economy, while Europe saw the practical start of Brexit and the lingering question of whether there is more to follow elsewhere in the punch-drunk European Union. For South Africans, the significance of these events seemed to disappear towards the end of the quarter when local political events, unleashed by our president, rocked our fixed interest and currency markets.

Interestingly enough though, by the end of the quarter most asset classes experienced only very small net movements for the quarter. Local asset classes all showed small net gains varying between 1.5% and 3.5% - including bonds, despite the jump in bond yields towards the end of the quarter. And with the currency having made only a marginal net move for the quarter, foreign assets too showed relatively small moves, with global equities being the best performer of the bunch with a gain of around 5%. Effectively the losses induced by local developments towards the end of the quarter just about took away the gains experienced for the global backdrop, which was one that marginally favoured emerging market assets. From a performance perspective our fund came through the quarter with positive returns, illustrating again the benefit of a diversified multi-asset portfolio.

The downgrade of SA’s debt was not a big surprise and prior to the event we deemed markets to be priced for absorbing a downgrade. However, markets were not prepared for the additional political risk that eventually got introduced, which negatively impacted the outlook for fiscal prudence at state owned enterprises. After Minister Nene’s dismissal, the quick removal of Des van Rooyen and reappointment of Minister Gordhan was seen as ‘sanity prevailing’ and the disruption to pricing in financial markets turned out to be a great buying opportunity. This time around, some assets are again offering great value, but there is significantly more doubt that sanity will prevail and prove the current pricing levels to be another great buying opportunity. As value oriented investors it certainly is the natural bias in our approach to buy more assets when they seem to offer above-average returns. But this time around it is with more hesitation that we actually do so.

The fund’s foreign exposure was taken to its maximum position of 25% and for now we retain that position, despite the latest movements in the currency pushing it back towards cheap territory, since the now increased risk of a second downgrade by S&P would really send the currency in a tailspin. Our local equity holding did also benefit from a solid exposure to rand hedge stocks and performed well during the quarter-end week of turmoil. The positioning within equities is, however, an outcome of where we see long-term value in the asset class, rather than a currency view or theme.

From a portfolio management perspective, the repositioning of the fund to align more closely with our house view models in the various asset classes, has been largely complete. The fund is well positioned to get maximum value from the input of all specialist teams within Sanlam Investments. We have also introduced some derivative hedges that are consistent with our strategy of using these instruments to introduce an additional element of risk management into our balanced portfolios and we are optimistic that in the long run our investors will benefit from the effect these structures will have on the fund’s performance.

The outlook for markets is still/again uncertain. The global economic backdrop is one of improvement on the margin, which all else being equal should benefit SA assets and the currency. Relative to this support, the risk of additional downgrades to SA’s credit ratings will now cast a new shadow over SA assets. Should a ‘sanity prevails’ event occur in the near future, the impact of that on SA bonds and the currency could be material. But in the absence thereof, investors will be faced with the impossible question of whether local assets are priced cheaply enough to reward investments in them despite the additional downgrade risk that President Zuma’s actions have brought. We are cautiously optimistic that they are, but not certain enough of this to bet the farm.

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A professional financial adviser is an invaluable aid along your savings journey.

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