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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 (%)
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.
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.
Sanlam Reality members may qualify for a discount on the Manager annual fee.
Total Expense Ratio (TER) | PERIOD: 01 April 2015 to 31 March 2018
Total Expense Ratio (TER) | 1.11% 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 1.08%, a performance fee of 0.06% of the net asset value of the class of participatory
interest of the portfolio was recovered.
Transaction Cost (TC) | 0.41% 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) | 1.49% 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: Composite benchmark:
FTSE/JSE SWIX: 97% |STeFI: 3%, Base Fee: 1.02%, Fee at Benchmark: 1.02%, Fee hurdle:
Composite benchmark: FTSE/JSE SWIX: 97% |STeFI: 3%, Sharing ratio: 15%, Minimum fee:
1.02%, Maximum fee: 2.28%, Fee example: 1.02% p.a. if the fund performs in line with its
Performance Fee benchmark being Composite benchmark: FTSE/JSE SWIX: 97% |STeFI: 3%.
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.
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 to normalisation.
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 a 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 likely to sell on rumour, still licking its
wounds post the Steinhoff collapse.
The first quarter was very tough for South African equities but the fund nonetheless
outperformed the FTSE/JSE Shareholder Weighted 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 be able 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 more 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
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
Last year, the risks linked to Fed tapering and a China hard landing informed a lot of
the cautious views on global equities. Cheap money found its way into alternative
assets with crypto currencies being all the rage. This year the risk of a China hard
landing appears to have abated but there are continued concerns about the path of
the US economy and future Federal Reserve actions. More recently the impact of a
protracted trade war between the US and China has been a major cause for
A year ago, there was general apathy towards SA equities and the focus on political
and economic downside risks in South Africa meant that many investors sat on the
side-lines, which teed up the strong relief rally we witnessed at the end of the year.
(The JSE is up 33% in dollars in 2017!) As contrarian investors, we become the
most cautious when market participants become overly bullish and discount
potential risks. In South Africa, the danger is that too much, too soon may be
expected from the new ANC leadership.
The fund reflects the best views of SIM’s equity unit trust portfolio managers and
holds approximately 20 stocks. It is not benchmark-cognisant and owns no offshore
stocks. We believe that this portfolio provides the best of both worlds in terms of
representing our investment ideas aggressively, while providing adequate
diversification. The fund’s largest holdings are companies of which valuations are
below our estimate of fair value.
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