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Skip Navigation LinksCore Funds

Sanlam Investment Management
General Equity Fund

If you’re willing to take the bold step towards a share portfolio, there’s a team of investment professionals who carefully select these companies for you, scouting everywhere for good value.

Quick Facts About The Fund

Sanlam Investment Management (SIM) General Equity Fund

Launch Date: 26 Jun 1967
Fund Size: R7 242.2 million
Benchmark: FTSE/JSE All Share Index
Time Horizon: 3 – 5 years
Risk Profile: Aggressive
Fund Classification: SA - Equity - General
Min Investment Amount: Lump sum: R5 000 | Monthly: R200
Total Expense Ratio (TER): 1.25%
Launch Date: 26 Jun 1967
Fund Size: R7 242.2 million
Benchmark: FTSE/JSE All Share Index
Time Horizon: 3 – 5 years
Risk Profile: Aggressive
Fund Classification: SA - Equity - General
Min Investment Amount: Lump sum: R5 000 | Monthly: R200
Total Expense Ratio (TER): 1.25%

Fund Strategy

This fund aims to outperform the FTSE/JSE All Share Index through active stock selection across all sectors and market capitalisation on the JSE. The fund may at any time hold a maximum of 25% in offshore assets. This fund may also invest in derivatives for efficient portfolio management.


Illustrative Annualised Investment Performance

Performance

Annualised as at 31 Dec 2016 on a rolling monthly basis
Retail Class Fund Benchmark
1 year 0.81 2.63
3 year 5.20 6.16
5 year 12.73 12.97
10 year 10.95 10.50

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 % -22.14

Minimum Disclosure Document (Fund Fact Sheet)

Performance Fees FAQ

Illustrative Annualised Investment Performance

Sanlam Investment Management (SIM)
General Equity
Sanlam Investment Management (SIM)
General Equity Benchmark

Source of graph : Morningstar

Sanlam Investment Management (SIM) General
Equity
Sanlam Investment Management (SIM) General
Equity Benchmark

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. Naspers N 12.64%
2. BTI Group 6.17%
3. Steinhoff Int Hldgs N.v 6.09%
4. Sasol 5.98%
5. Stanbank 4.53%
6. Anglos 4.50%
7. MTN 3.87%
8. Old Mutual 3.80%
9. FirstRand / RMBH 3.22%
10. Barclays Group Africa 3.04%
Cash And Money Market Assets
International Assets
Exchange Traded Funds
Equity Technology
Equity Financials
Equity Telecommunications
Equity Consumer Services
Property
Equity Health Care
Equity Consumer Goods
Equity Industrials
Equity Basic Materials
Preference Shares
1. Naspers N 12.64%
2. BTI Group 6.17%
3. Steinhoff Int Hldgs N.v 6.09%
4. Sasol 5.98%
5. Stanbank 4.53%
6. Anglos 4.50%
7. MTN 3.87%
8. Old Mutual 3.80%
9. FirstRand / RMBH 3.22%
10. Barclays Group Africa 3.04%
Cash And Money Market Assets
International Assets
Exchange Traded Funds
Equity Technology
Equity Financials
Equity Telecommunications
Equity Consumer Services
Property
Equity Health Care
Equity Consumer Goods
Equity Industrials
Equity Basic Materials
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)

  • 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) 1.77%

Advice fee | Any advice fee is negotiable between the client and their financial adviser. 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. 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.

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

Total Expense Ratio (TER) | PERIOD: 1 July 2013 to 30 June 2016
Total Expense Ratio (TER) | 1.77% 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 1.77%, a performance fee of 0.49% of the net asset value of the class of participatory interest of the portfolio was recovered.

Transaction Cost (TC) | 0.24% 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) | 2.01% of the value of the Financial Product was incurred as costs relating to the investment of the Financial Product.

Manager annual fee | Performance Fees: Minimum fee: 1.25% p.a. (incl. VAT), maximum fee: 3.42% (incl. VAT) and sharing rate: 20%. Performance fees will only be charged once the performance benchmark is outperformed and only if the fund performance is positive. The performance fee is accrued daily, based on daily performance and paid to the manager monthly. Total Expense Ratio (TER) | PERIOD: 1 July 2013 to 30 June 2016 Total Expense Ratio (TER) | 1.77% 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 1.77%, a performance fee of 0.49% of the net asset value of the class of participatory interest of the portfolio was recovered.

Transaction Cost (TC) | 0.24% 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) | 2.01% of the value of the Financial Product was incurred as costs relating to the investment of the Financial Product.

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.

While 2016 will be remembered as a lacklustre year for equities with the Shareholder Weighted Index (SWIX) delivering a 4% total return, this figure belies the fact that deep value cyclical stocks staged a sharp recovery after hitting lows at the end of 2015. The recovery was assisted by unpredictable policy and political events. As the year drew to a close, another vox populi unhinged global markets in the shape of the shock victory of Donald Trump at the ballot box. Yet again, pollsters got it wrong and for the second time this year, the black swan proved to be less elusive than thought. A clean sweep Republican victory is likely to deliver a cocktail of tax cuts and fiscal spending, a probability which has wrecked havoc in the bond market with 30-year US bonds experiencing their most vicious sell-off in the last 40 years. This may be the beginning of the global bond yield climb as the inflation risk rises via a cocktail of profligate spending, tax cuts and import tariff protection. The cliché is now that financial markets appear to have become accustomed to black swan events with Brexit impacting markets for three weeks, the Trump election influencing markets for three days and the surprising impact of the Italian elections having a negative impact for only three minutes!

In South Africa, perceptions of political risk drove the market. The rand staged a recovery during the course of the year, gaining 11% against the US dollar from oversold levels after the Nenegate wobble at the end of 2015 and the Finance Minister being able to sidestep accusations from the Hawks. In addition, the sovereign downgrade event risk was also kicked down the road. This was therefore a year for contrarians with deep value cyclical stocks trumping high quality stocks.

Resources stocks led the way and were up 29%, outperforming financial and industrial stocks, which posted a small decline. Commodity prices were also up by a third on average during the year, driven by aggressive credit expansion in China and the anticipation of fiscal stimulus supporting loose monetary conditions globally. Supply discipline was also significant with The Organisation of the Petroleum Exporting Countries (OPEC) agreeing to cut output for the first time in eight years at the tail end of the year, driving the oil price up 45% after falling for the previous two years.

Rand hedges, especially those with a significant sterling component, came under pressure as a result of the rand strengthening during the year and the impact of Brexit - with the pound sterling being even weaker on a relative basis.

Rising bond yields and growth expectations have also trumped fears related to the start of the Fed rate hiking cycle. In fact, the election of Donald Trump was another political black swan and markets initially feared an all-out international trade war, but quickly embraced his pro-growth, pro-business rhetoric leading to a bond rout and further support to the cyclical recovery story.

What did we do last quarter?

The FTSE/JSE All Share Index (ALSI) was down 2% for the quarter, with the industrial sector under severe pressure, down close to 5% as the rand strengthened versus the major European currencies, which weighed on dual-listed stocks. The financial sector gained close to 3% as South Africa averted a sovereign credit downgrade. During the period, the fund underperformed its benchmark but posted a positive return for the year. The fact that the fund ranks amongst the bestperforming equity funds over the last 10 years means that it is ideally placed to create wealth for investors over the long term and often short-term volatility provides the opportunity to accumulate quality assets at a discounted price. the opportunity to accumulate quality assets at a discounted price.

What added to, and what detracted from performance?

Barclays Africa was up close to 12% as South Africa eluded the much feared sovereign credit downgrade. Internationally, banks have rallied on the back of a steepening yield curve and on the expectation that a more pragmatic President Trump would push back against some of the more penal regulatory rules which have been threatening to cripple the growth prospects of the banks. At the end of the year, we also saw a number of large financial institutions, including Deutsche Bank, settle fines with the US Department of Justice, which was seen as reducing the systemic risk linked to such institutions having to face protracted and expensive legal battles.

The fund benefited from the strong performance from Sappi, which was up almost 27%, with profits almost doubling over the past year. The company was buoyed by strong pulp markets, solid packaging sales and cost cutting. The company has deleveraged considerably, which also points to much lower financial risk, and this allowed the company to declare its first dividend since the Global Financial Crisis, testimony to their strong financial position.

Our largest holding, Naspers, delivered a poor -15% return during the quarter. This is despite solid performance in its Chinese associate, Tencent. With the stake in Tencent being worth more than the Naspers market cap, the Naspers valuation remains solidly underpinned.

Among the top holdings, Steinhoff International delivered another disappointing - 7% return for the quarter after being down the previous quarter. The company provided a positive trading update on its acquisition of Mattress Firm, the largest mattress retailer in the US, and its acquisition of Poundland, a UK high street retailer. Also, the core Conforama business in Europe is doing better operationally, which served initially to reassure investors. However, this was unhinged by the news that Steinhoff is considering a bid to buy a controlling stake in Shoprite Holdings in exchange for its stake in Pepkor Africa with the announcement being scant on detail.

Our strategy

The value recovery needs to be supported by fundamentals to continue into 2017. So far, lead indicators globally continue to remain positive and this should support the earnings momentum for cyclical stocks. Globally analysts expect earnings growth to accelerate by some 13% after a lacklustre 4% growth in 2016, leading global equities to be priced on a 16x price-earnings (PE) ratio. For the JSE, we expect earnings to grow by a robust 20%+ and the JSE to be priced at a reasonable 14x earnings.

Resources companies, especially diversified miners, have recently demonstrated an unusual degree of capital discipline, which has delayed the supply response, and they have also prioritised cash flow generation. The only proviso here remains the financial risks in China, which have led to a spike in interbank rates, the yuan falling to eight-year lows and bond yields reflecting ongoing capital outflows.

On the other hand, a number of domestic cyclicals have been sold off and are looking attractive. This includes financial stocks and domestic retailers. However, the local environment remains challenged with low economic growth meaning that earnings growth is likely to be subdued in the coming year. That said, we believe that a lot of this is discounted in the price.

We don’t expect 2017 to be necessarily a quiet year after a tumultuous 2016. In Europe, German and French elections will bring with them the usual dose of political uncertainty and chatter around Brexit is unlikely to die down with Article 50 likely to be invoked in the first half of 2017. Similarly, locally, the succession debate within the ruling party is likely to intensify. In the US, the Trump presidency will be under pressure to deliver on the pro-growth promises, which has swept the Republicans to victory. This cocktail is likely to mean further market volatility.

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

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