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.
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 April 2015 to 31 March 2018
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.
South African fixed interest assets delivered superb returns during the first quarter of
the year. This was within the context of emerging market bonds delivering good
returns in general - in absolute terms as well as compared to bond markets and
most asset classes worldwide. South Africa was ahead of the pack by delivering
very good returns in both local currency as well as dollar terms. Global equities
ended the quarter under pressure after starting the year on a very strong note while
developed market bond yields ended the quarter roughly in line with where they
started the year, resulting in global bonds not giving much back to investors over the
quarter. When also taking into account the strong performances delivered by South
African bonds during December, then the returns investors have seen from investing
in South African fixed interest assets over the four months to the end of March have
been superb - both in local currency as well as dollar terms.
There was a relatively unanticipated turnaround in the outlook for the global
economy during the first quarter. The year started with a good outlook for global
growth, in particular a recovery in Europe, the US and Japan - with suggestions of
even synchronised global growth. However, more recent data releases have raised
concerns that the strength of the global economy is not as strong as previously
suggested. The speed of the loss in growth momentum has caught many by
surprise. Even harder to predict at the start of the year was the scale and speed of
protectionist policies and tariffs being implemented by the US and China. If these
trends continue it could result in international bond yields continuing their more
recent turnaround on the back of the growth outlook.
Back in South Africa, real GDP accelerated to 1.5% year-on-year during the fourth
quarter of 2017 from an upwardly revised 1.3% in the third quarter. The economy
picked up the pace to 1.3% in 2017 from an upwardly revised 0.6% in 2016.
Although there were some substantial historical data revisions, the improvement
broadly reflects the fading impacts of drought, high terms of trade, lower consumer
inflation and a more buoyant global economy. The sector breakdown shows that
both secondary and tertiary sector momentum improved to 3.1% and 2.7% in the
fourth quarter, from 1.5% and 1.1% respectively in the third quarter. The
improvement in the secondary sector was led by manufacturing as well as electricity,
gas and water, which outweighed a decline in construction. The tertiary sector was
buoyed by a recovery of wholesale and retail as well as transport, while finance and
general government also both improved. By contrast, the primary sector momentum
slowed to 4.9% in the fourth quarter from 13.7% in the third quarter with the
slowdown triggered by a decline in mining and quarrying momentum while
agriculture increased at a slightly reduced pace. We believe the economy can
potentially lift on the back of improving confidence levels and we have a cautiously
optimistic outlook, albeit accompanied by some concerns. Agriculture is unlikely to
sustain the robust momentum observed in recent quarters and the terms of trade
have flattened out, although at elevated levels. Furthermore, consumer inflation is
bottoming out and the improvement in nominal income growth has been relatively
modest, while the Western Cape could be a drag on GDP growth due to the
The Monetary Policy Committee (MPC) at the South African Reserve Bank (SARB)
decided to keep the repo rate unchanged at their scheduled meeting in January,
followed by a cut in the repo rate by 25 basis points at their scheduled meeting in
March. The split of votes amongst the members of the MPC was 5 to 1 in January,
while the split was more finely balanced at 3 to 4 in March. The inflation forecast at
the last meeting in March was left unchanged at an annual average of 4.9% for 2018
and decreased to 5.2% for 2019 compared to 5.4% previously, with the stronger
and decreased to 5.2% for 2019 compared to 5.4% previously, with the stronger
exchange rate expected to largely offset the impact of the 1.0% VAT hike announced
in the February Budget. The expectation for real GDP growth is to improve
moderately in 2018 to 1.7% compared to 1.4% previously. However, this is projected
to slow marginally to 1.5% in 2019 compared to the previous estimate of 1.6%. The
risks that previously prevented the MPC from cutting the policy rate have subsided
and they indicated that future policy decisions would be more dependent on
economic data outcomes. Although the door is open for a further cut, it has been
made clear that inflation targeting towards the middle of the target band will be a key
consideration going forward. We expect the easing cycle to be relatively shallow
accompanied by a contained inflation outlook, while subdued credit growth and the
economic growth outlook do provide a basis for policy support.
Against this backdrop, local bond yields ended 2017 with a bumpy fourth quarter last
year, but local interest rates could seemingly only go in one direction for most of the
first quarter of this year. South African fixed interest assets had one of the stronger
quarters on record with the rally in local rates fuelled from seemingly all sides. The
positive developments on the local political and policy front alleviated investor
concerns with the market subsequently pricing in the good news. These favourable
outcomes also paint a better picture for the South African economy going forward.
The fears of a potential credit rating downgrade of the South African government by
Moody’s subsided during the quarter on the back of the positive developments. 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 their rating and
outlook reflects 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
There was little in the way of further concrete information coming to light
surrounding the affairs of Steinhoff after the company shocked financial markets and
dominated local headlines during December. The Steinhoff debt listed locally on the
JSE did not initially react to the news, but did trade weaker during December as the
local credit spreads moved higher and repriced to weaker levels. During January,
Steinhoff announced the early redemption of all their debt securities issued under
the Steinhoff Services Limited Domestic Medium Term Note Programme (DMTN).
After the necessary approvals were obtained, they proceeded to redeem all
outstanding debt in the local market during February thus paying back holders of
their local debt in full.
Also making headlines was Capitec Bank, which was in the spotlight towards the
end of January after the release of an unfavourable report by research firm Viceroy.
It was the same company which published a report on Steinhoff’s accounting
misstatements a day after the resignation of the company’s CEO during December.
The South African Reserve Bank allayed fears by swiftly confirming that Capitec
meets all prudential requirements as set out by the industry regulator. However, the
share price continued to trade with a weaker bias for the remainder of the quarter
even though the research report was of poor quality and the bank subsequently
released a healthy set of results for the financial year ending 28 February 2018
towards the end of the quarter.
The local credit market continues to deliver healthy returns on investment and the
investment case remains a compelling one. Credit spreads are still trading with a
stronger bias in most sectors given the significant demand compared to available
supply. This suggests that a more cautious approach is possibly warranted. There is
a continued emphasis on ensuring the fundamentals are aligned with the
compensation for risks taken given the tightening in credit spreads on the back of
continued support stemming from strong investor appetite.