ADVERTORIAL How well do
ADVERTORIAL How well do you know the Satrix Balanced Index Fund? What kind of fund is the Satrix Balanced Index Fund? As the name implies, the Satrix Balanced Index Fund is a multi-asset index tracking fund which is also Regulation 28 compliant. It is a well-diversified unit trust which invests across asset classes (ie equities, bonds, property and cash), both locally and globally. This means you don’t have to decide how to allocate your investment, the fund does it for you. What does it invest in? The fund has a strategic asset allocation, which simply means each asset class has a set weight which is rebalanced at set intervals. For the Satrix Balanced Index Fund, these intervals are semi-annually in March and September. The fund invests in local assets (75%) and international assets (25%). Seventy percent of the fund is invested in equities (49% domestic and 21% international), giving it a moderate risk profile. The graph below shows the allocation between the seven asset classes as well as which index is being tracked for each asset class. The fund has a unique multi-factor equity component called the Satrix SmartCore. What is the Satrix SmartCore? The local equity exposure (49%) of the fund is represented by what we call the Satrix SmartCore. The SmartCore is a proprietary Satrix equity index, launched Satrix Balanced Index Fund Asset Allocation in 2013. Its composition is researched and periodically reviewed by Satrix. Three factor signals are combined to make up the SmartCore, representing the 49% local SA equity exposure of the fund: • 33.3% Momentum factor • 33.3% Value factor • 33.3% Quality factor Each factor brings complementary but differing equity exposure to the core of the fund. This ensures the SmartCore captures the type of returns we are targeting from the SA equity market. What returns can I expect? The Satrix Balanced Index Fund has delivered a strong performance track record over all periods. Over the three- and five-year periods to May 2019, the fund has placed 13th out of 154 and 11th out of 100 funds respectively, while since inception the fund is in the top quartile in its category. There are currently 200 balanced funds available in the multi-asset or balanced fund category, of which 11 are index-tracking balanced funds. The chart above shows you what the actual returns have been in this fund since inception and also compares it to the median return of funds in the same category. Who should invest in this fund? This is a moderaterisk, diversified fund with both local and global exposure. Investors with a long-term time horizon and who don’t want to manage a portfolio across asset classes should consider this fund. The fund is suitable for people saving towards retirement or who are in retirement and drawing an annuity because it adheres to Regulation 28. You can use the fund in your taxfree savings account either as your total exposure or as part of your portfolio. Long-term after-tax money can also be invested in this fund. This fund is a well-diversified moderaterisk fund and can be held over long periods of time. Because it is suitable for retirement savings, you can invest in the fund while you are saving for retirement and keep the fund while you are drawing an income. How much does it cost? The fund’s annual management fee is 0.35% (+ VAT) for direct individuals and 0.25% (+ VAT) on LISPS. What is the best way to access the fund? The Satrix Balanced Index Fund is available online via SatrixNOW.co.za. The fund can be accessed via LISPs (eg Glacier, Allan Gray, Investec) as well as directly through Sanlam Collective Investments. 34 www.bluechipjournal.co.za
SATRIX BALANCED INDEX FUND. NOT AS PASSIVE AS YOU THINK. A TOP-PERFORMING BALANCED FUND. Morningstar performance data – Ranked 13th of 154 funds for 3 years and 11th of 100 funds for 5 years to 31 May 2019 in the ASISA South African Multi-Asset High Equity Category. For more information visit www.satrix.co.za. Satrix Managers (RF) (Pty) Ltd is an authorised financial services provider and a registered and approved manager in terms of the Collective Investment Schemes Control Act. Maximum fund charges (including VAT): Manager Annual Fee 0.40%. Transaction Costs (TC) 0.25%. Total Expense Ratio (TER) at 31 March 2019, 0.47%.
