NAV on 2019/07/22
|NAV on 2019/07/19
|52 week high on 2018/09/05
|52 week low on 2018/12/28
|Total Expense Ratio on 2019/03/31
|Total Expense Ratio (performance fee) on 2019/03/31
Satrix Managers (Pty) Ltd.
MSCI World Equity Index (Developed Markets)
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.
Satrix Investment Team
Satrix MSCI World Equity Index Feeder Fund-Mar 19
MSCI developed markets experienced an exceptional quarter with a US Dollar return of 12.5%, outperforming emerging markets, which in turn also realised good absolute numbers of 9.9% year to date. After experiencing their worst December since 1931, global stocks posted their best January since 1987 and global equities had their second-best quarter on record. But the rally wasnft plain sailing with economic data releases surprising on the downside. Global growth is trending around the 3% mark, but the key question remains whether global growth has indeed bottomed at around trend levels.
The temporary ceasefire in the trade war and the postponement of the 25% tariff rate have provided the markets with some relief. The US Federal Reserve (Fed) joined the party with some dovish comments and markets now expect the Fed to cut rates both this year and the next, with only a modest rise in the US 10-year bond rate being anticipated. Finally, lower volatility provided a more favourable environment for risky assets.
Despite the S&P 500 Index posting its best start of the year in a decade, the inversion of the US yield curve at the end of the quarter put a damper on the initial bullish mood with concerns of a recession looming. The Fed will be using interest rates to target inflation, but Fed Chair Jerome Powell mentioned that the US was not at the neutral rate, providing optimism that future hikes will be delayed. The Fed has effectively paused the federal funds rate at 2.5%, which is below the neutral level of 3%. This provided a boost to risk assets and weakened the greenback temporarily.
However, the possibility of a no-deal Brexit is also in the balance with another extension expected beyond the crucial 2 April vote. There is an increasing possibility that Britain will go for the customs union route (a so-called esoftf Brexit), but there remains the possibility of a referendum and an early election.
The Chinese economy continues to experience a soft landing with growth expected to be in the 6.0-6.5% p.a. range in the year to come, the slowest growth rate in three decades. The Chinese are stimulating their economy further with tax cuts . the latest measure to be implemented . and at the end of March the manufacturing PMI surprised on the upside with the biggest month-on-month increase since 2012.
The MSCI World Index (developed markets) realised a net return of about 12.48% in US Dollar terms for the first three months of 2019, which was even better than that of the MSCI Emerging Markets index of 9.93%. For the past year MSCI Developed markets (+4%) managed to comfortably outperform MSCI Emerging Markets at -7.44%.
Our feeder fund buys and sells units in a eparent fundf called the Satrix MSCI World Index fund, which tracks 23 developed countries with more than 1 600 shares included in the index. We track this index through a process of optimisation with an ex- ante tracking error varying between 15 and 18 basis points.
The MSCI World Index (in Rand terms) managed a return of about 12.76% (12.48%in US Dollar) over the last three months - this slight difference in return was mainly due to the Rand weakening slightly against the US Dollar over this period. depreciation playing a major role.
For the year 2018 the Rand return for this index was around 6%, with Rand depreciation playing a major role.
Some key risks that remain for 2019 are that the tailwind of quantitative easing is turning into the headwind of quantitative tapering. Net purchases by central banks were running at $23 billion per month and could turn negative this year, especially in the case of the Fed. This is likely to add to the uncertainty and volatility during the course of the year. While inflation in the developed world remains contained with US inflation below 2.5% p.a., the pick-up in wage growth is a concern (from 1.5% to 2.5% p.a.) in the US. But it is noteworthy that there is no inflation pressure in Europe and Japan.
The International Monetary Fund (IMF) is forecasting a slowdown in the US this year with the rest of world growth stabilising. The risk remains that the Fed may still tighten rates further. However, the risk of a recession remains low in our opinion.
The objective of the Satrix MSCI World Equity Index Feeder Fund is to provide an investment vehicle for investors wishing to track the movement of the MSCI World Equity Index (Developed Markets) by investing in securities of global companies which are primarily constituents of the MSCI World Equity Index (Developed Markets).
The portfolio will apart from assets in liquid form, invest in participatory interests of the Sanlam World Equity Tracker Fund established under the Sanlam Universal Funds PLC approved by the Irish Regulator in August 2011. The Sanlam World Equity Tracker Fund will employ replication, sampling and optimisation techniques and, subject to the limits and within the conditions laid down by the Central Bank of Ireland, may use financial derivative instruments for efficient portfolio management purposes to track the performance of the MSCI World Equity Index (Developed Markets), rather than attempting to hold all of the securities in the MSCI World Equity Index (DevelopedMarkets). The Sanlam World Equity Tracker Fund may also invest indirectly in such securities through quoted investment vehicles, such as Exchange Traded Funds, and holdings in UCITS funds domiciled in a Member State and other open-ended collective investment schemes that satisfy the requirements of the Central Bank of Ireland.