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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: 01 July 2004
Fund Size: R7 213.2 million
Benchmark: FTSE/JSE All Share Index
Time Horizon: 5 years+
*As at 31 March 2018
Risk Profile: Aggressive
Fund Classification: SA - Equity - General
Min Investment Amount: Lump sum: R10 000 | Monthly: R500
Total Expense Ratio (TER): 1.49%
Launch Date: 01 July 2004
Fund Size: R7 213.2 million
Benchmark: FTSE/JSE All Share Index
Time Horizon: 5 years+
Risk Profile: Aggressive
Fund Classification: SA - Equity - General
Min Investment Amount: Lump sum: R10 000 | Monthly: R500
Total Expense Ratio (TER): 1.45%
*As at 31 March 2018

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 Cumulative Growth of an investment of R100

Performance

Annualised Total Return on a rolling monthly basis
(as at 31 March 2018)
Retail Class Fund (%) Benchmark (%)
1 year 1.71 9.6
3 year 1.48 5.05
5 year N/A N/A
10 year 1.48 5.05

Annualised return is the weighted average compound growth rate over the period measured
Highest and Lowest Annual Returns over 10 years
Highest Annual % 2.51
Lowest Annual % 0.23

Minimum Disclosure Document (Fund Fact Sheet)

Quick Facts

Performance Fees FAQ

Cumulative Growth Over Time

Sanlam Investment Management (SIM)
General Equity Fund
FTSE/JSE All Share Index

Source of graph : Morningstar Direct

Sanlam Investment Management (SIM) General
Equity Fund
FTSE/JSE All Share Index

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.

1. Naspers -N-17.59%
2. Barclays Group Africa6.42%
3. Stanbank6.08%
4. BTI Group5.80%
5. Old Mutual5.61%
6. Sasol4.68%
7. Anglos3.78%
8. MTN3.07%
9. Mondi2.80%
10. FirstRand / RMBH2.11%
Cash And Money Market Assets
International Assets
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-17.59%
2. Barclays Group Africa6.42%
3. Stanbank6.08%
4. BTI Group5.80%
5. Old Mutual5.61%
6. Sasol4.68%
7. Anglos3.78%
8. MTN3.07%
9. Mondi2.80%
10. FirstRand / RMBH2.11%

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 N/A
Advice annual fee (max.) 1.14%
Manager annual fee 1.25%
Total expense Ratio (TER) 1.49%

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.

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: 01 January 2015 to 31 December 2017

Total Expense Ratio (TER) | 1.49% 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. Inclusive of the TER of 1.49%, a performance fee of 0.21% of the net asset value of the class of participatory interest of the portfolio was recovered. Transaction Cost (TC) | 0.22% 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) | 1.71% 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: FTSE/JSE All Share Index Base Fee: 1.25%, Fee at Benchmark: 1.25%, Fee hurdle: FTSE/JSE All Share Index Sharing ratio: 20%, Minimum fee: 1.25%, Maximum fee: 3.42%, Fee example: 1.25% p.a. if the fund performs in line with its Performance Fee benchmark being FTSE/JSE All Share Index.

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 Frequently Asked Questions can be obtained from our website: www.sanlaminvestments.com.

When you invest online

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

  • No initial account set-up fees – usually charged at 2%.
  • 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

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.

Market review

The beginning of the year saw global markets stumble 1.4% with US equities experiencing their first decline since 2015 and suffering from a volatility-induced whiplash. This reversed the unusual combination witnessed in 2017, where we experienced rising equity markets combined with low volatility. With a martial Trump on the rampage, volatility spiked after a benign 2017. In addition, the punch and counter punch of a trade war left global markets dizzy and tethering to find their feet, while the Fed continued to hike rates. In South Africa the ‘Ramaphosa’ rally faded with the JSE down 7% this quarter.

Global Markets

The first week of February ‘welcomed’ a new Fed Chair, Jay Powell. The S&P shed 666 points in a day with the Dow Jones shedding 4.6%, the worst one-day loss on record, the following day. Higher US bond yields showed fears that the highest rate of wage growth in skilled jobs since 2008 would fuel inflation. Global markets swooned in unison as the VIX spiked from record low levels to 50%, the biggest percentage move in history, with some ‘inverse volatility’ ETN being suspended. The S&P 500’s correction of just over 5% in the first week of February was a reminder that rising bond yields are likely to cause much anxiety on the path to normalisation.

South Africa

The JSE battled two opposing forces this quarter. On the one hand the ‘Ramaphosa’ effect drove some SA Inc. stocks to new highs, while the ‘Viceroy’ effect led to a slew of rumours impacting a number of companies. The recall of President Zuma and ascension of Cyril Ramaphosa to the highest office in the land attracted elusive foreign flows to the JSE, which flowed mainly into local retailers and banks, up 22%, a very narrow part of the market viewed as representative of the SA economy.

Free tertiary education for the poor and land reform are two key structural issues which have been brought to the fore. While a lot needs to be done to conquer South Africa’s social disparities, the latest Budget, together with the appointment of a credible cabinet, with Minister Nene in charge of the national purse strings, helped turn the tide with the rating agencies. The new president has made a number of credible appointments to restore the credibility of key institutions such as a reshuffle of the Board of Eskom and suspension of the head of the SA Revenue Services. These actions culminated in a positive review by Moody’s at the end of March. The local sovereign debt was kept at investment grade and reassuringly the outlook was revised from negative to stable, meaning that our debt would remain part of the Citi World Government Bond Index - a key criterion for many foreign investors to hold our sovereign debt.

On the other hand, the Viceroy effect became a game of guesswork where a number of companies were sold off simply on the back of rumours about being the target of US research firm Viceroy subsequent to their report on Steinhoff. In the end, it was a leaked report by a local hedge fund that put the Resilient stable to the test, leading to a massive sell-off of the listed property stock and its web of associates. When Capitec was eventually revealed to have been the target of Viceroy, the impact was muted despite the bank and the US research firm exchanging numerous emails in a very public spat. Viceroy wanted Capitec put into receivership while the retail bank released detailed notes on their financials to calm the nerves of investors. That said, Capitec was down 21% in the past quarter. All this was more symptomatic of a market more likely to sell on rumour, still licking its wounds post the Steinhoff collapse.

What added to, and what detracted from performance?

This was a difficult first quarter for the fund, in which it underperformed the FTSE/JSE All Share Index. Our largest position, Naspers, came under pressure (down 16%) this quarter after delivering solid returns in 2017. Naspers decided to reduce its holding in Tencent by 2% for some $10.6bn.

There have been various innuendoes in the market that the 34% holding in Chinese internet giant Tencent held via a variable interest entity did not entitle Naspers to dispose of its stake. To do so at a 10% discount and incurring a tax liability shows that the 40% discount to the value of its Tencent investment at which Naspers trades is unwarranted. In addition, there were concerns that Naspers would over time have to issue more shares to settle liabilities linked to the exercise of share options; this liability can now be cash settled. However, the market was disappointed that none of the cash raised would be returned to shareholders but would rather be re-invested in the business and that the rest of the Tencent stake is now subject to a three-year lock-up. In our view, the quickest way to close the discount would be to list the underlying assets that the market currently values at zero, such as the Pay TV and classified business offshore.

In the financial space, Banking stocks performed well with Standard Bank doing particularly well (up 12%) this quarter on the back of strong full-year numbers. Barclays Africa Group was up a muted 4% in line with subdued year-end numbers. Within the insurers, Old Mutual Plc delivered a respectable 6% total return and we anticipate that the managed separation of the UK and South African businesses will unlock value by eliminating hefty head office costs and allowing each asset to be more accurately priced. There has been much volatility within the listed property space and we minimised our exposure to stocks with higher risk profiles.

The Resources sector fared slightly better this quarter, down 4%. Our large position in Anglo American Plc delivered over 10% total return on the back of strong returns underpinned by strong cash flow generation and capital discipline. A less hostile approach by the new Minister of Minerals & Energy and agreement on the mining charter may well be the catalysts required for foreign investment in our local resources stocks, which have been trading at discounts to their international peers. Sasol was down a disappointing 5% on the back of weak interims but with its Lake Charles Project largely complete, the company’s $13 billion US project is coming close to completion this year. Platinum stocks were a major disappointment - down some 21% this quarter - as the strong rand continued to put pressure on the revenue line and the industry struggles to improve productivity at their deep level mines.

Our strategy

This past quarter is a reminder of Mr Market’s mood swings. While SA Inc. has benefitted from the Ramaphosa effect, many blue chip global stocks have been heavily sold off and provided us with opportunities to add to our positions. The fund takes a number of moderate positions with our focus on stocks offering valuation upside. The local macro environment is poised to improve gradually as growth picks up and foreign investors are reassured by the fact that credit agencies will give the new political administration the benefit of the doubt, but the obvious beneficiaries of a more buoyant local environment have already been bid up. On the other hand, the strong rand and global uncertainty have led to sharp sell-offs of a number of quality global stocks. As long-term value investors, our focus is to invest in companies with clear moats and diversified franchises trading at attractive valuations.

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

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