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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: 01 January 2015 to 31 December 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.
It has been roughly a decade since the start of the global financial crisis, generally
agreed to have started during the second half of 2007 with a series of credit shocks
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,
most notably in the United States, Europe and Japan. The world economy and
financial markets have grown accustomed to the support of central bankers’
accommodative policies and we are still to see the impact if these policy measures
are adjusted or normalised going forward.
Internationally, there are signs of stronger global growth and in particular a recovery
in Europe, the US and even Japan. The outlook for 2018 suggests relatively
synchronised global growth accompanied by divergent central bank policies.
European economies are on track to grow at the fastest pace in almost a decade,
while growth in the US has also been strong with employment at a 28-year low.
Japan has also finally surprised on the upside with consecutive quarters of stronger
growth. China posted third quarter growth figures in line with expectations, helping
to soothe some concerns and boost commodity prices. Eyes remain on the
important factors influencing economic growth going forward, such as the impact of
the divergent central bank policies worldwide, proposed tax reforms in the United
States as well as the impact of China on the rest of the world economy.
During October, the South African Reserve Bank (SARB) published its Monetary
Policy Review. The communication gave some previously unpublished details
regarding their assessment of the interaction between monetary policy and the
South African economy. It also discussed how the Monetary Policy Committee
(MPC) is changing its inflation forecasting model, a discussion around the output
gap and the neutral real interest rate. It essentially shows that local interest rate
policy has been reasonably accommodative since the global financial crisis. The
MPC kept the repurchase (repo) rate unchanged at 6.75% in a unanimous decision
at their scheduled meeting in November, which was also broadly in line with market
expectations. The inflation forecast profile suggested both headline and core
inflation to be close to the turning points, but that inflation risks are to the upside.
Governor Lesetja Kganyago mentioned that the inflation forecast had deteriorated
since the previous meeting on the back of a weaker currency, higher international oil
prices as well as higher wage growth. He also made specific mention that we are ‘at
a time when imminent key event risks contribute to an environment of particularly
elevated uncertainty,’ which highlights their acknowledgement of significant
deterioration on the fiscal side. They also mentioned the downgrade risks that
remain on the horizon, which also reinforces their cautious approach to the policy
rate in the face of the looming uncertainties.
South African yields continued on a bumpy path during the third quarter with yields
going up sharply and subsequently coming almost all the way back, as such going
almost full circle during the quarter. The South African 10-year government bond
yield started the quarter at 8.7% and subsequently traded weaker during October, in
particular after the delivery of the MTBPS at the end of October. Subsequently yields
particular after the delivery of the MTBPS at the end of October. Subsequently yields
continued to trade weaker with the South African 10-year government bond yield
closing above 9.6% during November. The market traded much stronger during
December as local interest rates rallied during the last few weeks of the year. The
local 10-year yield made back almost all the lost ground and finished the quarter 10
basis points higher than where it started the quarter, ending the year at 8.82%.
South Africa has seen a marked deterioration in the sovereign credit ratings of the
country’s local and foreign currency debt from all three major credit rating agencies
during the last few years. There were further downgrades during the last quarter of
2017 and the potential for another downgrade looming in the first quarter of 2018.
On the scheduled review date on 24 November, S&P announced that they
downgraded South Africa’s local currency debt to a non-investment grade level of
BB+, the highest junk rating. They also lowered South Africa’s foreign currency debt
rating by one notch to BB, putting it deeper into junk territory. On the same day,
Moody’s issued an update saying they have not changed their South African
sovereign debt rating but put it on review for a downgrade, which is due within 90
days of the announcement. This gives them the opportunity to incorporate the
numbers from the National Budget into their assessment, which is due to be tabled
in February 2018. Moody’s indicated that they would downgrade the credit rating if
their review finds that South Africa’s economic, institutional and fiscal strength
continues to weaken. Also, if measures to address the funding gaps are not
adequate or if there is not enough progress on structural reforms it would reinforce a
negative signal regarding the strength of South Africa’s institutions and
government’s effectiveness - all of which result in an environment which is not
conducive to investment and growth. Moody’s has both the local and foreign
currency rating at Baa3, the lowest investment-grade rating. Also, on the sovereign
rating front during November, Fitch Ratings affirmed South Africa's rating at BB+
with a stable outlook. Fitch noted that South Africa's ratings are weighed down by
low growth, sizeable government debt and contingent liabilities as well as
deteriorating governance standards. They did, however, note that these weaknesses
are balanced by a favourable government debt structure, deep local capital markets
and a flexible exchange rate, which helps to absorb external shocks.
Business confidence continued to stay at depressed levels and was relatively
unchanged towards the end of the year, with the fourth quarter number of 34
indicating that almost two-thirds of South African corporates find business conditions
‘unsatisfactory’ in the local economy. Businesses are surveyed in the wholesale,
retail, manufacturing, building and motor vehicle dealing businesses - all except
wholesalers remained deep in negative territory.
The local credit market was resilient during the year, with issuance strong and credit
spreads trading with a stronger bias in most sectors. During the final quarter of the
year issuance in the primary credit market continued on a strong path. Gross
issuance for the year reached a new record and surpassed the previous record
years, which were in 2012 and 2015. Issuance continues to be dominated by
financials and banks, while corporates made up an above-average portion of the
debt issuance during the year. Credit spreads traded stronger during the year, with
bank and corporate spreads trading stronger while state-owned enterprise spreads
continued to weaken. Credit spreads in general were supported by strong investor
appetite during the year, in particular during the second half of the year.
The events surrounding Steinhoff dominated headlines during December with the
local equity and credit markets both affected. Steinhoff’s share price was down
sharply after the announcement that it will no longer release its financial results due
to ‘accounting irregularities’. Steinhoff’s share price ended the last month of the year
down 92%. The Steinhoff Eurobonds traded internationally were also initially down
sharply, but since recovered some of the losses, even though the trading was on
thinner volumes and more sporadic. The local Steinhoff debt listed on the JSE did
not initially move as much by comparison, but over the following trading days during
December the local credit spreads moved higher and the locally held Steinhoff debt
also repriced to more appropriate and weaker levels.