Skip Ribbon Commands
Skip to main content

Skip Navigation Linkssimbalanced Sanlam Investments Management Balanced Fund

The information on the Adviser and Institutional areas of this site have been tailored for investment professionals. Appropriate product, fund and service information for private investors can be accessed on the Personal area of our site. Terms & conditions.

continue
Do not show this again.

Contact

Call me back

Advice

Back

Email us

Skip Navigation LinksCore Funds

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 324.4 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): 1.62%
Launch Date: 01 February 1995
Fund Size: R15 324.4 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): 1.62%

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 31 Mar 2017 on a rolling monthly basis
Retail Class Fund (%) Benchmark (%)
1 year 4.30 2.19
3 year 6.31 6.17
5 year 10.73 10.01
10 year 8.74 8.12

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 % 31.12
Lowest Annual % -16.94

Minimum Disclosure Document (Fund Fact Sheet)

Performance Fees FAQ

Illustrative Annualised Investment Performance

Sanlam Investment Management (SIM)
Balanced
(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
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

Patrice Rassou

Head of Equity - Sanlam Investment Management

Chartered Accountant, Patrice has a BSc (Econ) in Monetary Economics with first class honours and an MSc (Econ), both from the London School of Economics. He also has an MBA with distinction from Manchester Business School, which he completed in 2003.

Initially, he worked at PricewaterhouseCoopers in London and Johannesburg, then moved to Old Mutual Asset Managers where he won the Raging Bull and S&P award for top performance in 2004. Now, he is treasurer of the Association of Black Securities Professionals (ABSP) in the Western Cape and Head of Equity at Sanlam Investment Management. He managed the SIM Top Choice unit trust from the end of 2006 and in 2007 was promoted to voting member of the Model Portfolio Group, where he has a direct impact on the core house view equity portfolio.

Patrice Rassou

Head of Equity - Sanlam Investment Management

Chartered Accountant, Patrice has a BSc (Econ) in Monetary Economics with first class honours and an MSc (Econ), both from the London School of Economics. He also has an MBA with distinction from Manchester Business School, which he completed in 2003.

Initially, he worked at PricewaterhouseCoopers in London and Johannesburg, then moved to Old Mutual Asset Managers where he won the Raging Bull and S&P award for top performance in 2004. Now, he is treasurer of the Association of Black Securities Professionals (ABSP) in the Western Cape and Head of Equity at Sanlam Investment Management. He managed the SIM Top Choice unit trust from the end of 2006 and in 2007 was promoted to voting member of the Model Portfolio Group, where he has a direct impact on the core house view equity portfolio.

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

Retail Class (%)

  • Advice initial fee (max.) 3.42%
  • Manager initial fee 2.28%
  • Advice annual fee (max.) 1.14%
  • Manager annual fee 1.25%
  • Total Expense Ratio (TER) 1.62%

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: 1 October 2013 to 30 September 2016
Total Expense Ratio (TER) | 1.62% 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 1.62%, a performance fee of 0.25% of the net asset value of the class of participatory interest of the portfolio was recovered.

Transaction Cost (TC) | 0.15% 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) | 1.77% 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.

During 2016, global political uncertainty rose considerably. In Europe, the Brexit vote and the Italian referendum caused uncertainty with respect to the future of the European Union (EU) and Britain’s role within the EU. The election of Donald Trump as the US president has further increased uncertainty due to his proposed policies, some of which are impractical or ambiguous.

It is considerably easier to determine asset prices in an environment of political and economic stability. The value of assets depends on the future cash flows that they can generate, discounted by the time value of those cash flows - the risk-free rate. The future cash flows of companies, for example, are more uncertain in a political environment that is rapidly changing. Typically, we would require a higher risk premium or discount when buying assets to compensate for the increased risk. This is not something we are seeing in the pricing of international assets. Instead, they have become more expensive.

Local investments:

Local equities

We retained our underweight position in SA equities. The historical price-to-earnings (PE) ratio of the SA equity market is above 20. Given the increase in commodity prices, the earnings of the resources companies are expected to make a significant recovery. If this materialises, it should bring the PE to below 15 by year-end. However, this is still above our estimate of a fair PE of 12 to 13, given our long-run real required return of 7% for SA equities.

It is interesting to note that Naspers now makes up 16.5% of the SWIX Index. It is trading on a very high PE ratio because its price reflects a very rapid earnings growth. Excluding Naspers, the historical PE of the market drops to around 17.

Local bonds

We retained our overweight position in SA long bonds. SA long bonds are still offering among the highest local currency real yields in emerging markets. Even if inflation settles at the top end of the 3% to 6% inflation target, a real return of 3% is on offer. This is particularly attractive given the low real returns available in equity markets, as well as global bond markets.

Inflation-linked bonds

We introduced a 0.5% overweight position in local inflation-linked bonds (ILBs) in December 2015 when their yields briefly spiked to 2.3% after the Minister of Finance was dismissed. ILBs rallied in the first part of 2016, but in the last quarter of 2016 the 10-year inflation-linked yield weakened to above 2%. We consider this to be an attractive real yield, as this is the real return that conventional 10-year long bonds have returned in SA over the past century. Unlike conventional bonds, ILBs provide protection against unexpected inflation and are therefore considerably less risky. SA ILBs are also attractively priced relative to developed market ILBs.

The SA government is in effect in control of the rand printing press so the default risk on randdenominated SA ILBs is low, as long as the inflation-linked component of the SA government’s total debt stays at a reasonably low level. Currently it is at 24%. There is probably more risk with the accuracy of the measurement and the measurement methodology of inflation, especially during periods of very high inflation or hyper-inflation. If this is a problem, then the inflation adjustment applied to these bonds would be compromised.

We still prefer SA conventional bonds to ILBs as is reflected in the position sizes. Implied inflation, calculated by subtracting the inflation-linked yield from the conventional bond yield, is priced to be well above 6%.

Local listed property

We have a neutral holding in listed property. We believe that JSE-listed properties are slightly expensive at a current dividend yield of 6.2%. Approximately 40% of JSE-listed property companies’ earnings are now from outside South Africa. We’ve retained the neutral position due to the geographic diversification of the income stream, and the fact that this is still a relatively highthe geographic diversification of the income stream, and the fact that this is still a relatively highyielding asset class in an environment starved for yield.

Global investments:

On a purchasing power parity (PPP) basis the rand is approximately one standard deviation cheap against the US dollar, while it is trading above fair value versus the British pound and the euro. We retained the underweight position with respect to our portfolios’ total offshore exposure. The interest rate differential on cash investments is at approximately 7%.

Global equities

We cut our overweight position to neutral in global developed market equities in the third quarter of last year. This is after a good eight-year run with the MSCI World Index giving an annualised return of 11% during this period.

After Trump was elected as US president, world markets, and the US market in particular, rallied significantly. This might be in expectation of rising corporate profits given Trump’s promised plans of cutting corporate taxes and also new infrastructure spending.

The US market is expensive on a current rolled PE of 20 and a price-to-book ratio of 2.8. We are of the opinion that the market is over-optimistic about Trump’s policies. On a PPP basis, the US dollar is considerably overvalued versus emerging market currencies, making US companies less competitive. Furthermore, non-financial US companies have increased their financial leverage considerably since 2012 to buy back shares, with debt to assets now at record high levels of around 27%.

We did retain a neutral position in developed equity markets as real returns from competing assets were not attractive. However, with rising global bond yields we are reconsidering this decision.

Global bonds

Even though global sovereign bond yields weakened after the election of Trump as president, we retained our underweight position. At a yield of about 2.4%, US long bonds offer a positive real return relative to our long-run inflation assumption of 2% for the developed world. We are concerned about long-run global inflation (see the discussion below) and would require an attractive premium above 2% before investing in developed market bonds.

Global property

We retained our overweight position in international properties via listed real estate investment trusts (REITs). Our portfolio currently consists of nine companies that have properties in the USA, UK, Europe and Australasia. The average dividend yield of the portfolio is 6.0%. These REITs typically have a 40% debt-to-equity ratio so rising bond yields would increase their cost of funding over the longer run. However, since we do expect some growth in earnings from these property companies, especially if inflation rises, they should outperform global bonds in the long run.

Risks and opportunities ahead

We are worried that global inflation might become a problem. Commodity prices have recovered rapidly in 2016 and this has already caused corporate goods prices to start increasing in China. Also, Trump’s plans for fiscal stimulus, through infrastructure spend, could push up inflation. All of this should be seen in the light of the quantitative easing policies of the past few years with central banks printing money to fund rising government debt in the US, Europe, UK and Japan. US government debt to GDP has increased from 65% in 2007 to well over a 100% now.

Invest Online

Quick, smart and convenient.



Find an Adviser

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

Invest Online

Quick, smart and convenient.

Find an Adviser

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

Sanlam Life Insurance is a licensed financial service provider.
Copyright © Sanlam