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-0.96  /  -0.08%

1199.47

NAV on 2019/09/19
NAV on 2019/09/18 1200.43
52 week high on 2019/04/24 1232.33
52 week low on 2019/01/02 1129.33
Total Expense Ratio on 2019/06/30 1.32
Total Expense Ratio (performance fee) on 2019/06/30 0
NAV Incl Dividends
1 month change 2.06% 2.06%
3 month change -2.16% 0.13%
6 month change -0.22% 2.11%
1 year change 0.26% 5.25%
5 year change 1.36% 3.91%
10 year change 0% 0%
Price data is updated once a day.
  • Sectoral allocations
Basic Materials 79.21 9.48%
Consumer Goods 29.63 3.55%
Consumer Services 35.16 4.21%
Derivatives 3.97 0.47%
Financials 100.34 12.01%
Gilts 128.21 15.34%
Health Care 4.58 0.55%
Industrials 27.50 3.29%
Liquid Assets 20.34 2.43%
Money Market 217.61 26.04%
Technology 53.98 6.46%
Telecommunications 24.97 2.99%
Offshore 110.24 13.19%
  • Top five holdings
MONEYMARK 96.80 11.58%
VANGUARDWORLD 65.22 7.8%
MM-06MONTH 62.78 7.51%
MM-05MONTH 58.04 6.94%
 NASPERS-N 53.98 6.46%
  • Performance against peers
  • Fund data  
Management company:
Sanlam Collective Investments
Formation date:
2013/12/02
ISIN code:
ZAE000186367
Short name:
U-SMMILOW
Risk:
Unknown
Sector:
South African--Multi Asset--Flexible
Benchmark:
Morningstar cat average for the ASISA cat - South African MA Low Equity
Contact details

Email
No email address listed.

Website
No website listed.

Telephone
021-947-9111

  • Fund management  
Selwyn Pillay


  • Fund manager's comment

Sanlam Select Absolute comment - Jun 19

2019/09/06 00:00:00
It has been an erratic three months for equity markets. The S&P 500 Index was Goldilocks in April (+3.9%), but lost it all and then some in May (-6.8%) due to Trump's tariff tweets, only to rebound strongly in June (+7.2%) on the expectation of US Federal Reserve (Fed) easing, and to make a record high in the first week of July on a renewed trade truce. Notwithstanding the ongoing damage to the global economy from existing trade tariffs and persistent uncertainty, the equity market is signalling strong growth ahead. Admittedly, the sharp fall in bond yields has assisted valuations.
The slump in developed market bond yields is telling a different story - it signals concern about growth, evident in lower real yields, as well as deflation fears. The first half of 2019 repricing in monetary policy expectations has seen a scramble by some analysts to revise forecasts to Fed cuts. While few are projecting a US recession, some expect insurance cuts to offset the impact from trade wars and the waning impact of prior fiscal stimulus.
It is not obvious that the Fed should be cutting rates based on the performance in equities and US GDP. Yet the expectation of Fed stimulus has contributed to the easing in financial conditions, with the market pricing in at least 25 basis points for the July meeting. Hence, the Fed would have to explain a pause carefully to prevent a sharp sell-off in rates and risk assets.
The Fed's dovish pivot has given emerging market central banks room to manoeuvre. The SA market reflects this, with the forward rate agreement curve fully priced for a 25-basis point rate cut in July. SA is a more obvious candidate for substantial central bank easing, but fiscal risks and capital flow volatility have so far prevented an easing cycle. With only five Monetary Policy Committee members contributing to the July meeting, the divisions within the committee make the repo rate outcome a much closer call than what the market is reflecting.
Market developments
A more dovish Fed and hopes of a trade truce left local equities (4.8%) in the lead for June. Bonds (2.2%), listed property (2.2%) and fixed-rate credit (2%) beat cash (0.6%), while floating-rate credit (0.5%) and inflation-linked bonds (0.3%) underperformed. For 2Q19 all the asset categories beat cash (1.8%), with listed property taking a surprising lead (4.5%), followed by fixed-rate credit (4.2%), equities (3.9%), bonds (3.7%), inflation-linked bonds (2.8%) and floating-rate credit (2.6%).
The lower Fed dot plot and US yields left the Dollar 1.6% weaker in June and emerging market FX 2.5% stronger. The Rand rallied 3.5%, taking the USD/ZAR to the low 14.00s. At 14.10, the Rand is neutral on our short-term 14.00-14.50 fairvalue range, but potentially expensive on a medium-term view given the weak growth trajectory and potential for credit rating downgrades.
Developed market bond yields plummeted in June with the German 10-year Bund falling deeper into negative territory (-0.4%) and the US 10-year bond moving sub-2% for the first time since the 2016 US elections. Expectations of Fed rate cuts and European Central Bank President Draghi's 'whatever it takes 2.0' boosted global bond markets. SA lagged the global rally due to the negative impact of the first-quarter GDP data, political news flow, and fiscal fears. Even so, the 10-year yield fell by 30 basis points in June, to 8.70%, which is at the lower end of our 8.60- 9.10% fair-value range.
Falling yields contributed to the surge in equities in June, with the S&P 500 Index rebounding by 6.9%. The MSCI World Index gained 6.5%, marginally beating the MSCI Emerging Markets Index's 5.7% gain. SA was a relative outperformer, in part due to FX appreciation, with the MSCI SA Index up by 6.2%. The FTSE/JSE All Share Index gained 4.8% and the FTSE/JSE Shareholder Weighted All Share Index 3.1%. The underlying performances were wide-ranging: resources outperformed (8.9%), in particular gold mining (+24.5%) stood out, followed closely by consumer goods (8.4%), while industrials (-4.1%) and health care (-0.5%) declined outright. Financials (1.3%) and consumer services (0.6%) underperformed, while technology (4.4%) and telecommunications (4.1%) outperformed modestly. The rally brought valuations closer to fair value with the market now trading on a forward price-toearnings ratio of 13.5.
Portfolio performance and positioning The fund's performance (2%) was driven largely by domestic equity (1.4% contribution), followed by domestic bonds (0.4%), foreign equity (0.2%), and domestic cash (0.1%). These were partly countered by the negative performance from foreign cash (-0.3%), which was due to the appreciation in the Rand. Domestic property was neutral for the portfolio's performance. The rebound in developed market equity assets amid a more dovish Fed and the expectation of a trade truce at the G20 spilled over to emerging market assets. Our allocation to domestic cash declined in June in favour of offshore cash, which partly reflects the expiry of an FX derivatives position. We maintained a moderate underweight-duration position in domestic bonds.
Domestic activity, confidence, and consumer metrics remain disappointing. Escalating trade tensions in May have given way to a renewed truce in June, with US-Sino trade talks set to resume. However, a deal is unlikely to transpire, leaving uncertainty elevated. South African asset valuations are no longer attractive, justifying a cautious stance as weak growth will lead to slowing earnings momentum, while also weighing on the fiscal position. President Ramaphosa's State of the Nation Address was promising, but the pace of political and economic reform remains pedestrian and, therefore, underwhelming. As such, we remain cautious and still prefer global defensive stocks and resources, and a moderate underweight allocation to duration
  • Fund focus and objective  
The portfolio will invest in a combination of equities, bonds, money market instruments, listed property as well as international equities and fixed interest investments. The portfolio will be broadly diversified across asset classes. Active asset allocation and securities selection strategies appropriate to the needs of cautious investors will be followed. Net exposure to equities both in South Africa and foreign markets will not exceed 40%. This portfolio will be managed in accordance with regulations governing pension funds. The investment manager will also be allowed to invest in financial instruments (derivatives) as allowed by the Act from time to time in order to achieve its investment objective. This is an institutional portfolio, which will form part of a multi manager solution.
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 Trustee shall ensure that the investment policy set out in the preceding clauses are adhered to; provided that nothing contained in this clause shall preclude the Manager from varying the proportions of securities in terms of changing economic factors or market conditions or from retaining cash in the portfolio and/or placing cash on deposit.
The Manager shall be permitted to invest on behalf of the Sanlam Multi Managed Institutional Prudential Low Equity Fund Two in offshore investments as legislation permits.
For the purpose of this portfolio, the manager shall reserve the right to close the portfolio to new investors on a date determined by the Manager. This will be done in order to be able to manage the portfolio in accordance with its mandate. The Manager may, once a portfolio has been closed, open that portfolio again to new investors on a date determined by the Manager.
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