Review of Volatility Protection Strategy & Sanlam Unity Umbrella Fund Default Investment Strategy
One of the identified actions for the Investment Committee from 2020 was to review the Volatility Protection Strategy within the Sanlam Umbrella Fund, and also the Sanlam Unity Umbrella Fund’s default investment strategy, with the aim of identifying possible improvements to benefit members.
See the relevant fact sheets for more information about both these strategies:
Volatility Protection Strategy
Unity Umbrella Default Investment Strategy
The review commenced early in 2020 with an assessment of the risk and return objectives for the strategies. The updated investment objectives were confirmed as:
- Capital loss of no greater than 5% over any rolling 12-month period
- Capital loss of no greater than 5% in any single calendar month
- No specified return target, rather maximise the return subject to the aforementioned downside constraints.
Thereafter an analysis of the strategies in line with the objectives was undertaken. Various scenario testing was also conducted on alternative compositions for the Volatility Protection Strategy and the Sanlam Unity Investment Strategy which currently are identical both allocating 75% towards the Sanlam Monthly Bonus Fund and 25% towards the Satrix Enhanced Balanced Tracker Fund.
The outcome of the review process is that no changes are going to be made as regards Volatility Protection Strategy, but that the Sanlam Unity Umbrella Fund’s default investment strategy will be amended to invest 100% in the Sanlam Stable Bonus Portfolio.
It is also worth reminding clients that it has also been decided that these investment strategies will be used as the default preservation strategies for exiting members in terms of Regulation 38 of the default regulations. Click here for more information.
These reviews follow prior reviews of the other trustee-approved default investment strategies of the Sanlam Umbrella Fund being Sanlam Lifestage, Passive Lifestage and Sanlam Blue Lifestage.
The Investment Committee now plans to turn its attention to a review of all four trustee-approved default strategies of the Sanlam Umbrella Fund, and to consider whether any additional default investment strategies should be added or whether any rationalisation of existing strategies is recommended. The intention is to conclude this review process by the end of 2021. Client and consultant feedback and suggestions will once again be an important consideration for this review.
Click here to read more about the review of the Volatility Protection Strategy.
Click here to read more about the review and planned changes to the Sanlam Unity Umbrella Investment Strategy.