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for private investors can be accessed on the Personal area of our site. Terms & conditions.
The fund aims to enhance yield by investing in a blend of floating rate note and credit instruments in a range of maturities. 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
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.
Fixed Interest Portfolio Manager - Sanlam Investment Management
Melville joined Sanlam Investments in 2011. As portfolio manager within the fixed interest team, his responsibilities include portfolio management, research, trading, valuations, investment process management and development, as well as product development and execution. He manages both institutional and retail portfolios totalling R50 billion. After obtaining a B.Comm. (Honours) degree from the University of Stellenbosch, Melville joined Novare Investments as a consulting team member of hedge funds, multi-manager and pension funds and then as portfolio manager for multi-manager products. Melville is a certified Financial Risk Manager, a Chartered Financial Analyst and a Chartered Alternative Investment Analyst.
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: 1 October 2014 to 30 September 2017.
Total Expense Ratio (TER) | 0.49% 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) | 0.02% 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) | 0.51% of the value of the Financial Product was incurred
as costs relating to the investment of the Financial Product.
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 third quarter of 2017 marked the 10-year anniversary of the start of the global
financial crisis; generally agreed to have started during August 2007 with a series of
credit shocks and leading to an international banking crisis. The economic downturn
that followed was one of the worst recessions in decades in many global economies.
Reflecting back on the last decade, we have seen unprecedented economic policies
being implemented. Expansionary fiscal policies were implemented in an effort to
avert a repeat of the prolonged deep recessions and high unemployment rates
which were seen in the 1930s. The increased levels of spending combined with
lower economic growth levels have led to higher government debt levels worldwide.
On the other hand, we have also seen the use of unconventional monetary policy
measures, with exceptionally low and even negative interest rates in some
developed markets as well as quantitative easing policies implemented by a number
of major economies, including the US, UK, Europe and Japan. Global trade and
global growth levels retreated sharply during the 2007 to 2008 global financial crisis.
Since then, global growth levels have recovered to historical norms, albeit belowtrend
growth levels, while global trade has remained below pre-crisis levels. The
higher growth rates have not been accompanied by higher inflation despite the
expansionary monetary policy measures being implemented, as wage growth has
remained sluggish while corporate profits continued to rise. This has helped fuel
political instability in many major economies worldwide. Global financial markets
have performed well with global equity markets posting new all-time highs on a
frequent basis. The financial and banking sectors have been left behind and
underperformed equity markets in general while a number of technology stocks
delivered phenomenal returns to those investors who were willing to hold on. Global
bond markets have also delivered stellar performances over the last decade as the
sustained downward trend in interest rates have resulted in healthy total returns.
The world economy and financial markets have grown accustomed to the support of
central banks’ accommodative policies and we are still to see the impact if they are
adjusted or normalised going forward. The question remains to what extent these
lower interest rates and accommodative monetary policies have resulted in inflated
asset prices elsewhere in the financial system.
Taking a look at the third quarter of 2017 it was marked by strong performance and
new all-time highs in global equity markets, with volatility measures still at all-time
lows despite geopolitical tensions and the threat of central bank normalisation
looming. One of the central themes in financial markets towards the end of the third
quarter was the potential unwinding of monetary stimulus in the US and Europe
going forward. Global and local 10-year government bond yields started the quarter
at elevated levels following hawkish comments from the US Fed and the ECB in
Europe. We subsequently saw yields trending lower during July and August until
they gave back their gains and global bond yields moved upwards again during
September, with local yields following suit.
The South African Reserve Bank (SARB)’s Monetary Policy Committee (MPC)
surprised the market by cutting the repo rate by 25 basis points to 6.75% at their
scheduled meeting in July. The vote was split four to two, with four members voting
in favour of an interest rate cut. The SARB made unexpectedly large downward
adjustments to their inflation forecasts and this was one of the main drivers for the
decision. Most market participants subsequently expected the SARB to cut interest
rates at one of the next scheduled meetings in either September or November.
However, the central bank surprised again by keeping the repo rate unchanged at
their meeting in September, accompanied by a particularly hawkish statement highlighting the risks that sovereign credit rating downgrades pose combined with
fiscal slippage concerns. The surprise move and accompanying communication
highlighted the unusual nature of the current local conditions and their influence on
monetary policy. The current cutting cycle is proving to be very gradual and
measured. The decision in September was split equally, with three members in
favour of a policy rate cut and three against.
On the credit side, debt issuance in the primary bond market continued on a strong
pace during the third quarter. Credit issuances were muted during the first part of the
second quarter with the uncertainty on the political front and the effects of South
Africa’s sovereign credit rating and other ensuing credit rating downgrades weighing
on market sentiment. Subsequently though, the credit market has been very strong,
in particular from the demand side. Auctions have been clearing at strong levels with
very strong investor appetite. Looking at the volume of bids submitted and the range
of bid levels, there is a substantial amount of capital available and looking for
relatively fewer available opportunities. Issuance was dominated by the banks and
financials, which made up more than half of the total. Some of the issuance was
driven by regulatory capital considerations as a substantial amount of subordinated
paper was placed - Tier II debt as well as Additional Tier 1 debt. Subordinated
issuances were well supported and cleared at significantly lower levels compared to
where the paper was placed previously. Securitisations and corporates made up for
most of the balance of the issuance, with state-owned enterprises (SOEs) lagging
behind compared to previous years. On the municipal side, City of Cape Town was
in the market again for the first time in more than seven years, issuing a Green Bond
that also saw significant support and participation by investors. They managed to
place R1 billion at below the indicated price guidance, and received R4.3 billion
worth of bids.
In general, credit spreads in the secondary market seem to have stabilised and have
narrowed in some sectors. The difference in spread moves can be seen by looking
more closely at primary market placements and also by differentiating between
sectors. The tide has turned on the corporate and financial front where spreads in
the primary market are contracting - on the financials and banking front spreads
decreased on both senior and subordinated paper issuances. Spreads on SOEs
continue to trend higher and trade at elevated levels, as investor sentiment and
governance issues continued to weigh on the sector.
MTN Group released their interim results for the period ending June 2016 during the
third quarter. The group released their results in both reported-currency and
constant-currency terms due to the significant currency depreciation in a number of
the company’s operating countries, hyperinflation and also once-off items. Revenue
decreased significantly by 19% to R64 billion in the first half due to the impact of
local currency depreciations. For instance, the depreciation in Nigeria’s naira caused
overall group revenue to decline from 37% to 28% year-on-year. EBITDA was
reported at R21 billion, which is also down sharply from R29 billion in the first half of
2016 while the group’s cash flow from operations decreased by 26% to R18 billion,
again due in large part to lower profits from Nigeria. Credit quality and rating risks
are skewed to the downside with the potential for further downgrades. Moody’s
downgraded MTN in June to Ba1 and is currently rated Aa3.za on a national scale
rating with a stable outlook while S&P downgraded MTN to BB+ in November 2016
and is currently rated zaAA on a national scale rating with a stable outlook. Fitch
downgraded MTN in April to BBB- with a negative outlook and is currently rated AA
(zaf) on a national scale rating.