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area of our site. Terms & conditions
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 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.
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.
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.
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 July 2013 to 30 June 2016
Total Expense Ratio (TER) | 1.64% 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 1.64%, 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) | 0.31% 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) | 1.95% of the value of the Financial Product was incurred as costs relating to the investment of the Financial Product.
Manager annual fee | Performance Fees: Minimum fee: 1.53% p.a. (incl. VAT), maximum fee: 3.42% (incl. VAT) and sharing rate: 20%. Performance fees will only be charged once the performance benchmark is outperformed and only if the fund performance is positive. The performance fee is accrued daily, based on daily performance and paid to the manager monthly
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 fourth quarter of 2016 was another weak quarter for South African equities,
which finished the year with a total return of 2.6%, underperforming cash for the
second year in a row. The low returns in 2016 were largely due to the impact of the
stronger rand (12.6% appreciation in USD) on the dual-listed heavyweights such as
British American Tobacco (-9% for the year), Richemont (-14% for the year), South
African Breweries (-16% before it was delisted) and Naspers (+1% for the year). In
contrast, mid and small-cap shares returned 27% and 21% respectively in 2016.
The disappointing returns in the fourth quarter were in spite of South Africa
managing to avoid a credit downgrade by Standard & Poor’s (for now) and the
positive impact that the Trump victory had on non-precious metal commodity stocks.
Even if you had correctly predicted the Trump victory, global markets reacted
differently to what most would have expected. Overall, however, the impact of the
Trump victory was negative for emerging markets and South Africa was no
Financials (+2.9%) outperformed industrials (-4.7%) and resources (-1.2%). The
best performing sectors in the fourth quarter were fixed-line telecoms (+25%),
industrial metals (+19%), support services (+13%) and banks (+11%). The worst
performing sectors included gold (-36%), platinum (-33%), media (-15%), healthcare
(-13%) and tobacco (-11%).
Our continued focus on identifying mispriced opportunities and having the courage
of our convictions to sometimes go against the crowd paid off for our clients in 2016.
In spite of the market showing negative returns, our clients’ portfolios showed
positive returns in the fourth quarter and significantly outperformed their respective
benchmarks. Big contributors to these positive returns came from our investments in
Barloworld (+42%), Altron (+42%), Anglo American (+13.8%), Investec (10.8%) and
Stocks which detracted from performance in the fourth quarter included our
investments in Northam (-22%), Group Five (-11%), Reinet (-10%), Shoprite (-11%)
and Steinhoff (-7%).
The benchmark-agnostic and diversified approach we take in allocating capital
meant the portfolios were better able to withstand the several surprises and shocks
during the year. In addition, the number of mispriced opportunities in the mid and
small-cap space provided a source of differentiated returns compared to some of
our peers. On a net basis our investments in smaller-cap companies contributed
about 20% of the excess returns for the year.
The outperformance we achieved this year was based on a very conservative
investment approach. Our portfolios did not have excessive concentration in any
one sector or stock. In particular, our overall position in resources was not materially
higher than the market and well below many of our competitors. However, the stocks
which we were invested in like Anglo American (+182%) and Northam (+54%)
performed substantially better than the Resources Index (+34.2%).
There have only been three periods going back to 1960 when equities
underperformed cash for more than two successive years. The last one was in the
nineties when cash beat equities 60% of the time and equities actually
underperformed cash for four consecutive years. In the years in which cash beat
equities it was mostly (70% of the time) when returns from equities were negative.
Looking back, the best time to invest in equities was in the year immediately after
the year in which they underperformed cash. The average annual excess return
from equities was 18% higher than cash in the year following equities’
underperformance. This is substantially ahead of the annual excess return from
equities versus cash of 9.6% since 1960. Further supporting the case for equities is
the current valuation. The FTSE/JSE All Share Index 12-month forward price-toearnings
ratio has de-rated from almost 16x a year ago to 13x today, making
equities the cheapest they have been since 2013.
While valuations are more favourable than they have been for some time, there is
no shortage of potential surprises on the horizon. The rating agencies remain
concerned about the adverse consequences of persistently low GDP growth in
South Africa. While growth is expected to recover in 2017, it still remains below the
levels required to create jobs. On the positive side, food inflation is likely to have
peaked, alleviating pressure on consumers and staving off any further interest rate
On the political front, the focus will increasingly shift to the ANC succession
dynamics ahead of the elective conference at the end of the year. While we are
hopeful that the best outcome will be achieved for all South Africans, the road will be
On the international front, the Trump trade has probably run ahead of fundamentals.
Many of Trump’s promises such as immigration tightening, tariffs, border taxes and
repealing Obamacare are negative for risk assets. The market seems only to have
focused on the positives such as tax cuts, infrastructure spending and deregulation.
Whether he can deliver or not remains to be seen.
With the US interest rate cycle on the up, we see challenging times ahead for stocks
which have benefited from artificially depressed interest rates. This includes
defensive companies such as healthcare and tobacco as well as gold, all of which
have been overpriced for some time. We remain underweight expensive rand hedge
and defensive stocks and although we are starting to see better prices than we have
had in a while, we have been slow to commit new capital to some of these
companies as the margin of safety is still not big enough.
We continue to see good opportunities amongst select mid and small-cap stocks. In
addition, easing food inflation will be supportive of food producers and we own
several of them (Tiger Brands, Clover and Rhodes Food Group). Finally, there are
always a few significantly mispriced opportunities which are trading well below
intrinsic value. While these may not be of the best quality, the market’s assessment
of their prospects is far too negative. These would include the likes of Old Mutual,
Altron, Stefanutti and Datatec, to mention a few.
In conclusion, the outlook for 2017 on balance looks better than a year ago.
Valuations are the most attractive since 2013 and the outlook for earnings growth is
supportive of reasonable returns. The macro and political landscape, however,
remains uncertain and may influence the improving fundamentals in the short term.