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Skip Navigation LinksCore Funds

Sanlam Investment Management
Value Fund

A big portion of the long-term outperformance by value managers – relative to other share portfolio managers - comes from their focus on preserving capital when shares are expensive.

Quick Facts About The Fund*

Sanlam Investment Management (SIM) Value Fund

Launch Date: 01 October 1998
Fund Size: R2 089.1 million
Benchmark: FTSE/JSE All Share Index
Time Horizon: 5 years+
*As at 30 November 2017
Risk Profile: Aggressive
Fund Classification: SA - Equity - General
Min Investment Amount: Lump sum: R10 000 | Monthly: R500
Total Expense Ratio (TER): 1.76%
Launch Date: 01 October 1998
Fund Size: R2 089.1 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): 1.76%
*As at 30 November 2017

Fund Strategy

This fund may invest in any listed share, but focuses on financially sound companies which offer exceptional value. This portfolio may invest in derivatives for efficient portfolio management. This portfolio may also invest in participatory interests of underlying unit trust portfolios.


Illustrative Cumulative Growth of an investment of R100

Performance

Annualised Total Return on a rolling monthly basis
(as at 30 November 2017)
Retail Class Fund (%) Benchmark (%)
1 year 4.46 22.54
3 year 1.75 9.33
5 year 7.76 12.71
10 year 7.88 10.21

Annualised return is the weighted average compound growth rate over the period measured
Highest and Lowest Annual Returns over 10 years
Highest Annual % 37.21
Lowest Annual % (27.89)

Minimum Disclosure Document (Fund Fact Sheet)

Quick Facts

Performance Fees FAQ

Illustrative Cumulative Growth of an investment of R100

Sanlam Investment Management (SIM) Value 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. Sanlam Global Best Ideas Universal Fund E 5.42%
2. Anglos 5.15%
3. Steinhoff Int Hldgs N.v 4.94%
4. Naspers -N- 4.61%
5. Oracle Corp 3.76%
6. Reinet Investments 3.64%
7. Old Mutual 3.62%
8. Combined Motor 3.42%
9. Stanbank 2.97%
10. Samsung Electronics Co Ltd 2.93%
Cash And Money Market Assets
Equity Investment Products
International Assets
Equity Technology
Equity Financials
Equity Consumer Services
Equity Consumer Goods
Equity Industrials
Equity Basic Materials
Property
Equity Health Care
1. Sanlam Global Best Ideas Universal Fund E 5.42%
2. Anglos 5.15%
3. Steinhoff Int Hldgs N.v 4.94%
4. Naspers -N- 4.61%
5. Oracle Corp 3.76%
6. Reinet Investments 3.64%
7. Old Mutual 3.62%
8. Combined Motor 3.42%
9. Stanbank 2.97%
10. Samsung Electronics Co Ltd 2.93%

Claude Van Cuyck

Portfolio Manager - B.Com (Hons); CFA

Claude began his career in 1993 when he worked for Karlein Investments (a private client investment company). He first joined Sanlam Asset Management in 1994 as an equity analyst. After five and a half years of service he worked as an analyst and portfolio manager with Gryphon Asset Management, where he was responsible for running unit trusts and pension fund portfolios, as well as retaining research responsibilities. He returned to SIM in 2002, where he became the Head of Equities and also successfully ran the Sanlam Investment Management General Equity unit trust for five years from January 2006, achieving consistent top-quartile performance for each of the five years during which the fund was under his management. Before that, he ran the SIM Industrial Fund, which achieved S&P and a Raging Bull award. Claude co-founded SIM Unconstrained Capital Partners with Ricco Friedrich in 2011.

Claude Van Cuyck

Portfolio Manager - B.Com (Hons); CFA

Claude began his career in 1993 when he worked for Karlein Investments (a private client investment company). He first joined Sanlam Asset Management in 1994 as an equity analyst. After five and a half years of service he worked as an analyst and portfolio manager with Gryphon Asset Management, where he was responsible for running unit trusts and pension fund portfolios, as well as retaining research responsibilities. He returned to SIM in 2002, where he became the Head of Equities and also successfully ran the Sanlam Investment Management General Equity unit trust for five years from January 2006, achieving consistent top-quartile performance for each of the five years during which the fund was under his management. Before that, he ran the SIM Industrial Fund, which achieved S&P and a Raging Bull award. Claude co-founded SIM Unconstrained Capital Partners with Ricco Friedrich in 2011.

Traditional Investing (when you invest via a Financial Adviser or other)

Retail Class (%)

Advice initial fee (max.) 3.00%
Manager initial fee N/A
Advice annual fee (max.) 1.14%
Manager annual fee 1.53%
Total Expense Ratio (TER) 1.76%

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 own.

Total Expense Ratio (TER) | PERIOD: 1 October 2014 to 30 September 2017.
Total Expense Ratio (TER) | 1.76% 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 1.76%, a performance fee of 0.18% of the net asset value of the class of participatory interest of the portfolio was recovered.

Transaction Cost (TC) | 0.29% 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) | 2.05% 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: 1.53%, Fee at Benchmark: 1.53%, Fee hurdle: FTSE/JSE All Share Index, Sharing ratio: 20%, Minimum fee: 1.53%, Maximum fee: 3.42%, Fee example: 1.53% 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.sanlamunittrusts.co.za.

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 overview

Without a doubt, 2017 was an eventful year full of surprises for South Africans. With elevated levels of government corruption, further cabinet reshuffles, a ballooning budget deficit, business and consumer confidence at extremely low levels, credit downgrades, ailing GDP growth, the Steinhoff debacle and finally, a ray of sunshine with the election of Cyril Ramaphosa as the next ANC president. Although there is a clear split in the top six candidates of the National Executive Committee (NEC), with half in the Ramaphosa camp and half in the Nkosazana Dlamini-Zuma camp, we are hopeful that Ramaphosa will be able to reduce government corruption and influence government policy in the right direction.

With all the challenges we faced in 2017, who would have guessed that the rand would have been the sixth best performing emerging market currency in the world, appreciating by 10.9% relative to the dollar (even though that 9.5%, was achieved in the fourth quarter). The reality is, as has been evidenced in the past, markets preempt bad news so the fear of credit downgrades, political challenges and the weak economy were priced into the rand a while ago.

From an equity market perspective, the FTSE/JSE Capped Shareholders Weighted All Share Index (Capped Swix) was up 16.5% for the year and 8.4% for the quarter. The FTSE/JSE Shareholders Weighted All Share Index (Swix) and the FTSE/JSE All Share Index (Alsi) were up 21.2% and 21% respectively for the year and 9.6% and 7.4% respectively for the quarter. Once again, Naspers had a massive impact on the overall markets return for the year with its share price up 71.8%. Excluding Naspers, the Swix and Alsi returns were 11.26% and 12.96% respectively.

The small and mid cap sectors lagged the overall returns of the market with small caps up 3% for the year and mid cap shares up 7.4%. This highlights the extent of the concentration of the market’s overall returns in large cap shares, driven by the Top 40 shares that were up 23.1% for the year. To further understand the concentration of returns in the market it is important to note that of the 176 stocks that make up the Alsi 41 stocks (i.e. 23%) outperformed the market. This means that 77% of the stocks on the JSE underperformed. A total of 59 stocks (34%) had negative returns in 2017. The median return of the 176 stocks was a meagre 1.35%. From a sector perspective, the quarter was dominated by the performance of financials post the outcome of the ANC elective conference. A Ramaphosa win saw financials return 16% over the quarter, while resources and industrials lagged with returns of 4.9% and 4.7% respectively.

Global markets performed well with the MSCI World Index increasing by 24.6% (in US dollars). In US dollar terms, returns in markets excluding the US were generally flattered by the weaker dollar. When translated into rand terms returns were less flattering, negated by the rand that strengthened by 10.9% over the year.

Performance

The portfolio returns lagged the overall market as a result of our underweight position in Naspers and the underperformance of our investment in the Naspers core assets. The announcement by Steinhoff of the resignation of the CEO, Markus Jooste, together with the announcement that they had appointed PWC to perform an independent investigation into accounting irregularities took us and the market by surprise. We acted swiftly and immediately sold out of our investment. Our decision was based on the inability to assess the true value of the business on the basis of not being able to rely on the audited financial statements. We sold out at an average price of approximately 1880 cents per share. The valuation underpin, in our opinion, was the value of Steinhoff’s holding in PSG, KAP and Steinhoff Africa Retail (three was the value of Steinhoff’s holding in PSG, KAP and Steinhoff Africa Retail (three listed investments that it owns). This closely equates to the exit price of our investment.

On a more positive note, Ramaphosa being elected was generally positive for many of the domestic SA stocks that we hold in the portfolio. For the quarter, Barclays Group Africa was up by 29.7%, Foschini was up 44.8%, and Standard Bank rose 24.2%, while Tiger Brands and Pick n Pay rose 21.9% and 21.2% respectively. Some of our small cap holdings like Adcorp and Italtile rose 20.6% and 12% respectively.

Over the 12-month period ending December 2017, two of our core resources holdings performed well. Northam Platinum rose 29.7% and Anglo American was up 34.2%. Our best performing small cap holdings were Altron and Hudaco, up 34% and 31% respectively. Some of the global stocks in the portfolio also performed well in US dollar terms. Samsung and Oracle rose 55.9% and 22.6% respectively, although these returns were lower when translated into rand (given the strong rand over the period).

Outlook

A Ramaphosa victory was crucial, in our opinion, for South Africa. This is likely to result in a gradual improvement in both business and consumer confidence over time. We must, however, not expect a swift recovery. Much damage has been done to the economy due to the high levels of corruption and poor execution of economic policies that have weighed heavily on the growth outlook in South Africa in a period where the rest of the world has shown synchronised growth. The synchronised global recovery, however, will likely provide much needed support to the SA economy and together with a more stable rand and deft leadership from Ramaphosa, the domestic outlook for 2018 is likely to be more encouraging than 2017.

Commodity prices remain strong with copper prices up 30.5% in 2017, iron ore prices have been surprisingly strong given increased supply and while platinum prices are only up by 2.8% in 2017 ($ prices), the palladium price is up by 56%. The oil price has also been strong, rising by 12.5% in 2017. Commodity prices remain supportive of a more stable rand and we would expect our resource stocks to continue to see earnings upgrades as analysts factor in the higher commodity prices. This should be positive for our holdings in Anglo American, BHP Billiton, Northam Platinum and Sasol.

The many conversations that we had with management teams last year pointed to a “wait and see” approach to the outcome of the ANC elective conference. Corporate SA was reluctant to invest additional capital in an uncertain political environment. Although the ANC elective conference concluded with somewhat of a compromised NEC we believe the Ramaphosa win, and the fact that there is greater certainty now that the elective conference is behind us, will result in Corporate SA being more decisive in their capital allocation decisions. This, we believe will be more supportive of some of the small and mid cap shares that have lagged the overall markets returns over the last few years. This will be positive for our clients’ portfolios. Should the rand remain stronger and more stable in 2018, we could expect some of the larger rand hedges to tread water and show more modest returns in 2018. However, this is a general statement and returns will clearly be determined by the underlying performance of the companies we own in the portfolio. We believe that the outlook for British American Tobacco, Reinet and Richemont remains positive and supports our holdings in these rand hedges.

Overall, we believe that the portfolio is well positioned for 2018, especially in the environment that we have described above. We see significant value in domestic SA stocks, in particular in the small and mid cap sectors. The portfolio remains well diversified with broad exposure to small, mid and large cap shares as well as domestic SA and select rand hedges where we see long-term value.

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