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for private investors can be accessed on the Personal 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 Cumulative Growth of an investment of R100
Minimum Disclosure Document (Fund Fact Sheet)
Performance Fees FAQ
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.
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.
Retail Class (%)
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 2014 to 30 June 2017 Total Expense Ratio (TER) | 1.77% 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 1.77%, a performance fee of 0.19% of the net asset value of the class of participatory interest of the portfolio was recovered.
Transaction Cost (TC) | 0.30% 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) | 2.07% 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 FAQ is available on www.sanlamunittrusts.co.za.
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.
Despite the overwhelming negative sentiment, the FTSE/JSE All Share Index (Alsi)
had its best quarter this year, supported by the strong performance from the media
and resource sectors. Both these sectors are benefiting from a weak rand and
strong growth in offshore demand for their products. The performance of small and
mid cap shares, which have a higher exposure to South Africa, continue to lag
overall market performance and both sectors remain in negative territory for the
year. In contrast, the FTSE/JSE Top 40 Index is up 15.3%.
South African companies have experienced some of the toughest times in recent
history. Consumer and business confidence has taken a severe beating. Looking
back over the past 20 years, when consumer and business confidence was this low
it coincided with a global crisis such as the emerging market crisis in 2008, the IT
bubble in 2002 and the Global Financial Crisis in 2008. It is different this time around
- this predicament is completely self-inflicted. While the rest of the globe is
experiencing an economic recovery, South Africa has struggled to achieve above
1% economic growth. In the hope of partially restoring business and consumer
confidence and supported by an improving inflation outlook, the SA Reserve Bank
cut interest rates by 25 basis points in July, but the lack of follow through in
September and the heightened political uncertainty resulted in a fairly limited impact.
Unsurprisingly our conversations with company management teams over the past
quarter highlight the frustrations of business leaders and the impact that the political
uncertainty is having on investor confidence. Many projects that require long-term
clarity have been postponed and some have been cancelled outright. No industry
has escaped the negative ramifications of the Cabinet reshuffle and more
companies than ever are looking for alternative avenues for growth outside of South
Africa. In addition, companies have become focused on managing costs in an
attempt to preserve margins. Unfortunately this has negatively impacted private
sector job creation (mostly in the manufacturing and construction sectors) with over
80 000 jobs lost in the first six months of this year.
Despite the local headwinds, the South African equity market hit an all-time high
during the quarter. The source of returns remains fairly narrow with only three
sectors outperforming the Alsi. These are media (essentially Naspers), consumer
goods (essentially Richemont) and resources (including forestry and paper). Of a
total of 170 companies making up the large, mid and small cap indices on the JSE,
just 40 outperformed with 130 companies failing to keep up with the overall market
return. In other words, for every company that outperformed the Alsi, another three
underperformed. When investment returns are so highly concentrated, it becomes
difficult for active managers to keep up with the overall market returns, explaining
why 90% of funds in the general equity category have underperformed the Alsi in
The portfolio returns lagged the overall market returns largely as a result of our
underweight position in Naspers and the underperformance of our investment in the
Naspers core assets (through the listed stub instrument). In spite of the discount of
Naspers widening to extreme levels, the investment case for the core assets
continues to improve. There are various technical factors that we believe have
contributed to the discount widening. One such factor is the continuing
disinvestment by foreigners from South African equities. Since the discount of
Naspers to its investment in Tencent turned negative in January 2016, we have seen a cumulative US$13 billion flow out of South African equities by foreigners. This is
far greater than the US$6 billion outflow during the Global Financial Crisis.
Other stocks that detracted from performance during the quarter include our
investments in Steinhoff and Group Five. Steinhoff came under the spotlight once
again due to the resurfacing of an old dispute with a former joint venture (JV)
partner. This case has been heard in Amsterdam and a favourable decision is
expected in the next two months. Management has provided for partial settlement
with the ex-JV partner and any negative outcome is not expected to have a material
impact on the financials. We used recent weakness to add to our position.
Group Five has been the subject of significant shareholder activism. The board has
been replaced and new management has been appointed in the various divisions.
While the company remains extremely undervalued, it will take some time to restore
profitability in the local construction business. The current share price attaches a
negative value to the construction business and undervalues the concession
Our investment in Anglo American and Northam Platinum contributed positively to
performance for the quarter.
This is in many respects a perfect storm. As companies have struggled to grow the
top line, they have had to compete harder than ever before to attract and retain
customers. This has often meant that prices have remained under pressure resulting
in lower margins. In this lies the opportunity. As investors we have always looked for
mispricing opportunities, which tend to arise at the time of maximum pessimism. In
order to find an advantage in the market, one needs to look for diversity
breakdowns, which happen when participants imitate one another and make the
same decisions based on the same signals from the market. Diversity breakdowns
represent collective overreactions and underreactions to new information. We have
seen this several times in the past and on each occasion have achieved significant
returns by having the moral courage to act opposite to the crowd when our
judgement has told us that we were right.
In a recent radio interview, Christo Wiese said: “In the last 50 years South Africa has
been through tougher times than we are currently experiencing. There is no reason
to believe that in this dark night, there won’t be dawn again. Things will be better
again.” South Africa is currently at a crossroad and while the upcoming ANC elective
conference in mid-December will be key, we are of the view that the South African
domiciled businesses and the currency are already reflecting a bearish scenario.
Many opportunities are emerging in the mid and small cap space and your portfolio
currently has approximately 25% allocated to stocks outside the Top 40. The share
prices of these companies have been under significant pressure this year and offer
substantial upside for the investor.
We also acknowledge our limitations in being able to predict the outcome of the
ANC elective conference and its impact on the market in December. For this reason
we maintain a diversified portfolio of holdings, both local and global, cyclical and
defensive. While we remain of the view that SA Inc. remains grossly undervalued,
the future performance of the portfolio is not only dependent on a recovery in South
Africa. We have significant exposure to businesses that are listed in South Africa,
but earn a significant portion of their profits outside of the country.