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 October 2013 to 30 September 2016.
Total Expense Ratio (TER) | 1.46% 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 1.46%, a
performance fee of 0.41% 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) | 1.96% 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.
While 2016 will be remembered as a lacklustre year for equities with the FTSE/JSE 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 the 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
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, probusiness
rhetoric leading to a bond rout and further support to the cyclical recovery story.
The FTSE/JSE Shareholder Weighted Index (SWIX) delivered a total return of -3% for the quarter,
despite the financial sector gaining 3% as South Africa eluded a sovereign credit downgrade. The
fund was weighed down by the poor performance of dual-listed industrial stocks with the industrial
index down almost 5% in the quarter, weighed down by a stronger rand (versus the pound and the
euro). During the period, the fund performed in line with its benchmark and this year the fund
celebrated its ten-year anniversary. The fund is testimony that high conviction views taken by the
Sanlam Investment team over the past decade have added considerable value to our investors
and this is has been done without taking excessive risk.
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.
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
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.
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.
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
The value recovery needs to be supported by fundamentals to continue into 2017. So far, leading
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
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
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.