SIM Enhanced Yield gets AA- credit rating
Global Credit Ratings (GCR) confirmed last night the national credit fund rating it gave to the Sanlam Investment Management (SIM) Enhanced Yield Fund as AA-(ZA)(f), with an outlook of stable. In determining a fund rating, GCR completes a thorough, in-depth assessment of the fund’s management as well as its historical performance in terms of return volatility, underlying asset quality, as well as market and liquidity risks.
GCR noted that “The SIM Enhanced Yield Fund has met its performance objectives over the past three years and also since inception, while the volatility over one-, three- and five-year time horizons is assessed as moderate. The growth in assets under management has been strong over the past three years, highlighting the appropriateness of the fund’s mandate and execution in meeting investor requirements.”
In determining the fund rating, GCR’s portfolio analysis considered credit risk, concentration risk, tenor, duration, NAV volatility and additional sources of market risk, in addition to the SIM Enhanced Yield Fund’s stress-tested weighted average credit rating.
Credit rating aside, a further tribute to SIM’s fixed interest team is the professional endorsement from Glacier by Sanlam, who recently added the SIM Enhanced Yield Fund to their well-known Shopping List. Says Leigh Köhler, Head of Glacier Research, “In selecting funds for our Shopping List we look for quality fund managers who produce consistent outperformance over meaningful time periods and the ability to protect capital in adverse market conditions, relative to peers…”
“The SIM Enhanced Yield Fund is managed by Melville du Plessis, who follows a team-based approach with respect to the instruments and issuers that make up the fund’s investment universe. During the course of our extensive due diligence process, we continue to find that the process in SIM’s fixed interest team is one of the outstanding competitive advantages for this fund and Sanlam Investments as a whole. We believe that du Plessis’s experience and ability in managing this fund is definitely a value add. The fund has consistently delivered returns above its benchmark and the SA Interest Bearing Category average over one-, three-, five- and six-year periods. However, the fund does display higher volatility in comparison to the category average, but investors are compensated for the added risk”, Leigh Köhler was quoted as saying.
The SIM Enhanced Yield Fund is no stranger to industry accolades. Earlier this year at the Raging Bull Awards ceremony in January, the Sanlam Investment Management (SIM) Enhanced Yield Fund received a certificate for the best 3 year performance in the SA Interest Bearing Short Term Fund. Previously it had also received this honour in 2014.
Says du Plessis ‘These are notable achievements for us. The SIM Enhanced Yield Fund was separately scrutinised by both GCR and Glacier. After going through the rigorous due diligence processes of both GCR and Glacier, the SIM Enhanced Yield Fund came out on top and received a positive endorsement from both. The fund’s track record so far demonstrates that it is possible to outperform over changing interest rate cycles, as well favourable and even unfavourable credit market environments”.
Fund manager insights
Performance is driven by movements in interest rates and credit markets, and is typically aimed at investors who have at least a six- to twelve-month investment horizon. It aims to offer a higher yield than a typical money market fund by taking advantage of the higher yields offered by a wide range of debt instruments, including corporate bonds.
The fund is mandated to invest in unlisted financial instruments for efficient portfolio management. The investment manager will also invest in derivatives as allowed and appropriate from time to time in order to achieve its investment objective.
Melville du Plessis
Portfolio Manager: Sanlam Investment Management (SIM)
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Melville joined Sanlam Investment Management (SIM) in 2011 as a portfolio manager in the fixed interest team. He is responsible for a range of actively managed mandates – including Active Income Funds, Bond Funds, Enhanced Yield Funds and International Debt Portfolios. He manages both institutional and retail portfolios totalling roughly R50 billion.
Melville’s responsibilities include portfolio management, research, trading, valuations, investment process management and development, as well as product development and execution. Melville has an extensive track record of experience in the hedge fund, multi-asset class, and pension funds industry. Since joining SIM his focus has been more specifically in the fixed interest space. |
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Please note that past performances are not necessarily an accurate determination of future performances, and that the value of investments may go down as well as up. A schedule of fees and charges and maximum commissions is available from the Manager, Sanlam Collective Investments, and a registered and approved Manager in Collective Investment Schemes in Securities. The maximum fund charges include (including VAT): An initial advice fee of 1.14%; annual advice fee of 1.14% and annual manager fee of 0.91%. The most recent total expense ratio (TER) is 0.92%. Additional information of the proposed investment, including brochures, application forms and annual or quarterly reports, can be obtained from the Manager, free of charge. Collective investments are traded at ruling prices and can engage in borrowing and scrip lending. Collective investments are calculated on a net asset value basis, which is the total market value of all assets in the portfolio including any income accruals and less any deductible expenses such as audit fees, brokerage and service fees. Actual investment performance of the portfolio and the investor will differ depending on the initial fees applicable, the actual investment date, and the date of reinvestment of income as well as dividend withholding tax. Forward pricing is used. The Manager does not provide any guarantee either with respect to the capital or the return of a portfolio. The performance of the portfolio depends on the underlying assets and variable market factors. Performance is based on NAV to NAV calculations with income reinvestments done on the ex-div date. Lump sum investment performances are quoted. The portfolio may invest in other unit trust portfolios which levy their own fees, and may result is a higher fee structure for our portfolio. All the portfolio options presented are approved collective investment schemes in terms of Collective Investment Schemes Control Act, No 45 of 2002. International investments or investments in foreign securities could be accompanied by additional risks such as potential constraints on liquidity and repatriation of funds, macroeconomic risk, political risk, foreign exchange risk, tax risk, settlement risk as well as potential limitations on the availability of market information. The Manager has the right to close any portfolios to new investors to manage them more efficiently in accordance with their mandates. The portfolio management of all the portfolios is outsourced to financial services providers authorized in terms of the Financial Advisory and Intermediary Services Act, 2002. Standard Bank of South Africa Ltd is the appointed trustee of the Sanlam Collective Investments Scheme. Income funds derive their income from interest-bearing instruments as defined. The yield is a current yield and is calculated daily.
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