NAV on 2019/09/13
|NAV on 2019/09/12
|52 week high on 2018/11/07
|52 week low on 2019/09/02
|Total Expense Ratio on 2019/06/30
|Total Expense Ratio (performance fee) on 2019/06/30
Satrix Managers (Pty) Ltd.
South African--Real Estate--General
FTSE/JSE SA Listed Property Index (J253)
Johann has 24 years investment experience of which 14 years was spent as an equity analyst. The last 10 years were spent as a portfolio manager.
He was one of the founder members of the large cap team and played a role in designing the large cap investment process.
He is currently a member of the equity selection group at Sanlam Investment Management.
Jenny joined Sanlam Investment Management in the client services department (1998 - 2002). In January 2003 she joined the SIM's Investment Professional Development Program (IPDP) and was permanently appointed to the SIM quant team during 2004. Her responsibilities include index fund management, quantitative analysis and portfolio construction.
Satrix Investment Team
Fund Manager Comment - Jun 19
The FTSE/JSE SA Listed Property Index (SAPY) returned a total of 4.5% during the second quarter of 2019 against the 1.5% in the first three months of 2019. This was better than the FTSE/JSE All Share Index (ALSI) return of 3.9%, cash at 1.8% and bonds, which returned a credible 3.8%. For the last six months the SAPY is still lagging most other major domestic asset classes, returning 6% versus 12.2% for equities, 7.7% for bonds, but still outperforming cash at 3.6%.
The best performing shares in the SAPY for the last quarter included Investec Australia (+18%), Fortress A (+17%) and Accelerate Property Fund (+14%). By contrast, the worst performers were SA Corporate (-9%), Attacq (-9%) and Stenprop (-2%).
The South African commercial property market continues to trade in a weak macroeconomic environment with low investor confidence. The office market is still experiencing high vacancy rates across the different sectors of the market area. High vacancy rates are also putting downward pressure on rental escalations, with the Edcon equity deal with landlords earlier in the year setting the scene for a number of negative lease reversions. By way of example, Foschini has extracted rental reductions of some 13% in SA and the rest of Africa.
The FTSE/JSE All Property Index (ALPI) (+2.8%) underperformed the FTSE/JSE SA Listed Property Index (SAPY) (+6%) this year due to its larger exposure to the UK and its concomitant Brexit risk together with its exposure to smaller SA property companies.
The current quarter was again somewhat quiet on the corporate action front.
During the June 2019 FTSE/JSE SAPY rebalance there were no constituent changes. The major weight changes happened in EPP N.V. (+0.8%) and the largest down-weighting was in Growthpoint (-0.4%). The one-way turnover was a very low 1.35%.
Your fund performed in line with the SAPY benchmark. Any deviations from the benchmark could solely be attributed to cash flows.
Following the modest return for the last 12 months, the SAPY has derated to an interesting 8.98% trailing income yield, and about an 8.7% clean forward yield - the first time in quite a while that the market is expecting a decline in income 12 months forward. The trailing and forward yields are now at a slight discount (i.e. higher) to the SA long bond yield of 8.1%. This is a good rule of thumb to highlight if there is value or not in the sector, just as US investors may, for example, compare the dividend yield on the S&P 500 Index to US Treasury yields.
The tough current macroeconomic environment will probably put a damper on shortterm returns from the listed property sector.
The Satrix Property Index Fund is a specialist portfolio. In selecting securities for this portfolio, the investment manager shall seek an investment medium for investors which shall have as its main objective the provision of a total compounded annual return of capital and income which substantially matches the notional performance of the FTSE/JSE SA Listed Property Index (J253), after taking into consideration all costs and regulatory compliance requirements.In order to achieve these objectives, the securities normally to be acquired in the Sanlam Investment Management Property Index Fund portfolio shall consist of those shares, at fair market prices, which substantially make up the FTSE/JSE SA Listed Property Index (J253) with due regard to the weightings defined therein. Other securities (derivatives) and assets in liquid form may be included from time to time to account for liquidity and index fluctuations. Apart from the above, the portfolio may also invest in participatory interests of portfolios of collective investment schemes registered in the Republic of South Africa or of participatory interest in collective investment schemes or other similar schemes operated in territories with a regulatory environment which is to the satisfaction of the manager and the trustee of a sufficient standard to provide for investor protection which is at least equivalent to that in South Africa. The underlying CIS portfolios will always be property tracker portfolios.