Satrix INDI ETF Leads The Equity Run

Although equity has proven itself as the asset class to outperform all others over the past century, the exceptionally strong run in South African equities has exceeded most investors’ expectations. Over the past 10 years, industrial shares were the darlings of the market, rewarding long-term investors richly.

As a result, according to the latest PlexCrown Unit Trust Survey, the SA Equity Industrial subcategory was the top performing subcategory overall over the past three, five and ten years with average annualised returns of 27.1%, 26.9% and 23.9% up to 30 June 2014 over the respective measurement periods.

Satrix INDI fund top of its category

Passive investors had even more reason to celebrate. Over five and ten years, the passively managed Satrix INDI exchange-traded fund beat all other collective investment schemes monitored by the survey, not only the funds in the SA Equity Industrial category. The fund delivered 30.6% annualised over the five years to 30 June 2014 and 25.7% over the 10 years to 30 June 2014.

Source: Morningstar | I-Net

How does the Satrix INDI fund work?

The FTSE/JSE Industrial 25 index is provided by FTSE/JSE and constructed according to the ground rules of their Africa index series. The JSE publishes these rules on their website. The Satrix INDI ETF portfolio simply tracks the index. The managers of the Satrix INDI ETF ensure that the portfolio replicates the FTSE/JSE Industrial 25 index as closely as possible. Because this exchange-traded fund is also registered as a collective investment scheme, it is included in the PlexCrown Unit Trust Survey.

Does this mean that passive funds always outperform active fund managers?

No. It may surprise you that as a passive index provider, Satrix is of the view that both passive and active management can add value. Relative to active managers, passive vehicles will offer a relative fee advantage, while investing in active funds give investors the opportunity to participate in the manager’s potential outperformance relative to the market. Says Helena Conradie, CEO of Satrix, “We believe that the lower costs associated with a blend of active and passive funds come with no performance compromise. Both disciplines can be combined to help you reach your investment objectives.”

Disclosure: Satrix is acting as a division of Sanlam Investment Management (Pty) Ltd (trading as Sanlam Investments).

Although all reasonable steps have been taken to ensure the information in this document is accurate, the Sanlam Investments cluster does not accept any responsibility for any claim, damages, loss or expense, however it arises, out of or in connection with the information in this document. No member of Sanlam gives any representation, warranty or undertaking, nor accepts any responsibility or liability as to the accuracy of any of this information. This document is intended for information purposes only and the information in it does not constitute financial advice as contemplated in terms of the Financial Advisory and Intermediary Services Act. Use or rely on this information at your own risk. Independent professional financial advice should always be sought before making an investment decision.

Sanlam is a full member of ASISA. Please note that past performances are not necessarily an accurate determination of future performances, and that the value of investments / collective investment units / unit trusts may go down as well as up. A schedule of fees and charges and maximum commissions is available from the Manager, Sanlam Collective Investments (RF) Pty Ltd. Collective investment schemes are generally medium- to long-term investments.  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 value of all assets in the portfolio including any income accrual and less any permissible deductions from the portfolio. Portfolio performance is calculated on a NAV to NAV basis and does not take any initial fees into account. An annualised growth rate is used for all performance data of 12 months or longer. Income is reinvested on the ex-dividend date. Total return performances are published. The source of the performance data mentioned is the PlexCrown Unit Trust Survey. Actual investment performance will differ based on the initial fees applicable, the actual investment date and the date of reinvestment of income. Forward pricing is used.  The Manager does not provide any guarantee either with respect to the capital or the return of a portfolio. No performance figure in this document is guaranteed. It is for illustrative purposes only and the performance of the fund depends on the underlying assets and variable market factors.

The Satrix INDI portfolio is an approved collective investment schemes in terms of CISCA. The Manager has the right to close portfolios to new investors to manage them more efficiently in accordance with their mandates.