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 Annualised Investment Performance
Minimum Disclosure Document (Fund Fact Sheet)
Performance Fees FAQ
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.
View, print and complete the form of your choice.
Email or fax the completed form to UTinstructions@sanlaminvestmentssupport.com or 0860 724 467
Note: Fund minimums change from 1 April 2017.
The debit-order contribution minimum will increase from R200 p.m. to R500 p.m.
The lump-sum contribution minimum will increase from R5 000 to R10 000.
This will apply to all funds except the Money Market Fund, which will remain at R1 000 p.m. for debit orders and R20 000 for lump-sum contributions.
*Total expense Ratio - September 2016 Download PDF
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.
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.
Sanlam Reality members may qualify for a discount on the Manager annual fee.
Total Expense Ratio (TER) | PERIOD: 1 April 2014 to 31 March 2017.
Total Expense Ratio (TER) | 1.28% 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 1.28%, a performance fee of 0.23% of the net asset value of the class of participatory
interest of the portfolio was recovered.
Transaction Cost (TC) | 0.50% 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) | 1.78% 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. A copy of the performance fee FAQ is available on www.sanlamunittrusts.co.za
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
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 cabinet reshuffle and the sudden recall of the finance minister and his deputy had dire consequences when Standard & Poor’s (S&P) downgraded our foreign debt rating to junk at the beginning of April (BB+), with our local currency debt downgraded to one notch above investment grade (BBB-). But within a week of the reshuffle after the end of the quarter, Fitch upped the ante by being the first agency to downgrade our local currency debt to junk. As a nation, we are now at a point where political ideology will not trump fiscal consolidation and such political self-mutilation could be costly in the long term. Foreign creditors own over a third of our debt and the cost of debt will rise and inhibit our ability to prioritise expenditure towards poverty relief. While the savings industry in SA is large - approximately R9 trillion (with more than half in equities) - foreign investors account for a third of this amount, with approximately a third of their investment in government debt. The downgrade of our local currency sovereign debt could force many foreign funders, who
in total own over 35% of our debt, to disinvest as SA debt would drop out of foreign sovereign debt indices and be relegated into the less popular high-yield division, leading to capital flight. Further weakening of our exchange rate would also feed into inflation and would constrain the SA Reserve Bank (SARB)’s ability to cut interest rates and may even lead to hikes, hampering an already fragile economy. To regain the confidence of our creditors, policymakers will need to demonstrate an ability to manage our finances responsibly - something that has been hamstrung by enterprises that have required recurring bailouts, delays in reforms and policy uncertainty, e.g. the Mining Charter. S&P is factoring in additional contingent liabilities from worsening financial performance of our state-owned enterprises (SOEs), especially Eskom, which could add an additional 10% of gross domestic product (GDP) to our debt ratio, which currently stands at 50% of GDP.
For many of our clients, the question is why does a downgrade matter? There is an obvious risk that, in order to balance the books, taxes will rise, import tariffs will increase the cost of living and higher interest rates will discourage private sector investment and job creation. The key concern remains our local currency debt junk rating, which could make it more expensive to meet our fiscal commitments in the long term. With the outlook from the rating agencies being negative, our policymakers will have to take proactive action to provide more certainty to our funders and demonstrate that we can be more fiscally prudent. Some bold action will be required to regain the confidence of more funders, especially foreign funders who have plenty of other investment choices.
The FTSE/JSE Shareholder Weighted Index (Swix) delivered a total return of 5.4% for the quarter, with the industrial sector making a comeback of up close to 7% with the dual-listed stocks defying the stronger rand. The financial sector took some body blows, down 1%, with the Competition Commission investigating the conduct of banks in the foreign exchange market and the removal of the finance minister weighing on sentiment. During the period, the fund underperformed its benchmark but posted a positive return for the year, performing well against the peer group. The fact that the fund ranks amongst the best-performing equity funds over the decade 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 largest position in the portfolio remains Naspers, up close to 15% this quarter. Naspers’ associate Tencent is now one of the top-10 companies in the world with a market cap of over $200 billion and it is now the largest emerging market stock. While technology stocks often are subject to much scepticism, a clear legacy of the Nasdaq bubble, it is worth bearing in mind that five of the six biggest companies in the world by market cap are currently technology stocks! Therefore any investor trying to gain exposure to global indices would find it hard to avoid owning technology stocks. With Naspers owning a third of Tencent, we therefore offer our clients the opportunity to gain exposure to this global technology theme without having to take money offshore and buy Facebook shares!
Another top holding,British American Tobacco, also did well, up 16% this quarter. The company managed to acquire Reynolds American, which extends its global footprint to the US and will also provide another source of growth, extend its portfolio of traditional products and expand its reach into new innovative offerings. With President Trump planning to favour American companies and give tax incentives to corporates, this deal may prove well timed and even more lucrative in the long term. The stock is trading at an attractive sterling dividend yield of some 4%. On the downside, our bank holdings underperformed with the Banks Index down some 6% this
quarter, with RMB Holdings down 5% and Standard Bank down 6%. Financial stocks as a whole were down 1% but the overall sell-off was much more muted than when we experienced the unexpected removal of Minister Nene in December 2015. After a strong run in 2016, there was much anticipation that the South African Reserve Bank would start cutting interest rates in the second half of the year as inflation started to soften. Now there is much concern that the sharp weakening of the exchange rate and the credit downgrade could even lead to a hike, which would impact financials negatively.
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 that are leaders in their respective sectors but whose valuations are below our estimate of fair value.
In the previous commentary, we anticipated that political uncertainty would be the theme of 2017 and this has played out already on our shores with the cabinet reshuffle triggering credit downgrades. Offshore, all eyes are now on the French elections with the possibility that a far-right victory may lead to further cracks within the European Union. This has completely overshadowed a global economic context where economic growth was making a comeback supporting global equities, which were up 7% in the first quarter and provided a supporting backdrop for emerging markets, which were up a whopping 11% in US dollars. Of course, the dollar returns were boosted by strengthening emerging market currencies with the rand even ending the quarter 2% stronger against the greenback.
The sovereign downgrade will weigh heavily on SA Inc stocks - especially financial and retail stocks, which posted strong rallies in 2016. As the prospect of a domestic growth rebound becomes more uncertain, these stocks are more likely to be negatively impacted. On the other hand, a number of dual-listed counters were heavily sold off, especially with the strong recovery in the rand weighing on their performance. The stocks are now trading at attractive valuations and feature strongly in our top 10, such as Naspers, British American Tobacco and Steinhoff International. Even within the resources sector, some stocks which did not rally last year are
looking much more attractive, such as Sasol, which provides some protection against the weaker currency.
The cocktail of volatility which afflicted us in 2016 has gone up a notch. In such an environment, a disciplined investment approach is key. It is important to bear in mind that the JSE remains the best-performing market globally since 1900 and over more than a century our market has withstood credit downgrades, political and economic isolation wars and worse phases of economic turmoil. Investors who took the long view and invested when others lost their heads are the ones who came out on top. This time is no different!