The Sanlam Umbrella Fund Investment Committee is responsible to monitor the investment strategy. This is to ensure both appropriate investment reporting to members, and to work with the Board’s appointed investment consultants to review the entire investment offering from time to time. This includes reviewing the trustee approved default strategies, to identify possible improvements that may benefit members, and refining the member investment choice menu to ensure available portfolios have performed in line with their mandates.
The Investment Committee recently concluded an in-depth review of the Sanlam Blue Lifestage Strategy. The strategy is intended to showcase Sanlam’s best-of-breed balanced offering, entirely managed by Sanlam Investments. This communication details the changes that will be made to the strategy during October 2024.
In line with the Investment Committee’s mandate and responsibility to monitor performance of the various portfolios against their benchmarks and client expectations, they have noted the consistent long-term underperformance of the SIM Balanced Fund relative to both.
After consulting with the Fund’s appointed Investment Consultants and investigating various alternative solutions, a decision has been made to terminate the SIM Balanced Fund and replace the portfolio with a new portfolio, called the Sanlam Multi Asset Growth Fund within the Sanlam Blue Lifestage Accumulation phase. The key reasons for this change include:
- Back-dated performance testing of the Sanlam Multi Asset Growth indicates that the change is likely to result in superior performance compared to the SIM Balanced Fund;
- The risk profile of the strategy does not change significantly;
- The new Sanlam Multi Asset Growth Fund consists 100% of Sanlam Investment capabilities;
- Sanlam Life had indicated its intention to terminate the SIM Balanced Fund offering for similar reasons; and
- The change results in a small reduction in the fees.
About the Sanlam Multi Asset Growth Fund:
| Objective | The fund’s objective is to provide high long-term investment growth and invests primarily in equities, property, fixed-interest investments, cash, and foreign equity. |
| Type of portfolio | Multi-asset (balanced portfolio) |
| Investment Manager | Sanlam Investments (The underlying investments will consist exclusively of Sanlam Investments capabilities). |
| Regulation 28 Compliant | Yes |
| Risk Profile | Moderate-Aggressive |
| Benchmark | Alexander Forbes Global Large Manager Watch Median |
Investment Management Fees
The table below shows the change in investment management fees payable in the Accumulation Phase of the strategy:
| Policy Fees, per annum, including VAT | |
| Current (50% SIM Balanced and 50% SPW Balanced)** | 0.75%* |
| New (50% Sanlam Multi Asset Growth Fund and 50% SPW Balanced Fund)** | 0.65% |
* SIM Balanced Fund investment management fees are applicable on a scale. The highest fee scale for the first R100m is applied for comparison.
** Plus: Performance fees due to the inclusion of hedge funds/alternatives are not included in the Policy Fee and are therefore for the policyholder’s account.
It is important to note that the core objective of the Sanlam Blue Lifestage Accumulation phase remains the same which is to maximise returns over the long term. By investing in this investment strategy, which diversifies across all the major asset classes, investors “outsource” the difficult decision of how much and when to invest in the different asset categories to Sanlam Investments. There will be no change to the preservation phase portfolio of this strategy, which remains the Sanlam Capital Protection portfolio.
CHANGES TO MEMBER INVESTMENT CHOICE RANGE OF PORTFOLIOS
For similar reasons, a decision has been made to terminate the SIM Balanced Fund in the member investment choice range of portfolios and replace it with the Sanlam Multi Asset Growth Fund.
Investment Management Fees
The table below shows the difference in investment management fees between the two portfolios:
| Policy Fees, per annum, VAT inclusive | |
| Current SIM Balanced Fund (member investment choice) | 0.75%* |
| New Sanlam Multi Asset Growth Fund (member investment choice) | 0.70% |
* SIM Balanced Fund investment management fees are applicable on a scale. The highest fee scale for the first R100m is applied for comparison.
Members invested in the SIM Balanced Fund as a member choice option, will have an opportunity to select a new portfolio from the range of member investment choice portfolios on the Sanlam Umbrella Fund menu. If no alternative election is made, members’ fund values in the SIM Balanced Fund will be switched to the Sanlam Multi Asset Growth Fund in October 2024.