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.
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
Minimum Disclosure Document (Fund Fact Sheet)
Performance Fees FAQ
Cumulative Growth Over Time
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.
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.
Retail Class (%)
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:
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 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.
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
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.
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.
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