We are sharing the following update from our investment service provider regarding developments for the inclusion of smoothed bonus portfolios as a Default Investment Strategy that meets the requirements as specified by the Default Regulations.

“The Sanlam Umbrella Fund has for many years used Smoothed Bonus Portfolios as a part of their default investment strategies. These portfolios provide:

  • Low volatility: members are protected from the roller coaster ride experienced by being invested in market-linked portfolios
  • Inflation beating long-term returns: these portfolios have historically provided returns in excess of inflation over the long-term
  • Capital protection: different levels of guarantees are provided on book values

In 2018 the FSCA released a draft standard containing conditions for Smoothed Bonus portfolios to meet if they are to be used as a default investment portfolio in a Fund’s investment strategy. Sanlam provided feedback to the FSCA via both ASISA and the IRFA. A second draft standard was released at the end of 2018 incorporating the comments submitted. At Sanlam we are supportive of the aims of the standard and believe that the latest draft is also a big improvement on the first.

For Sanlam, the standard will require enhanced disclosure, but we do not foresee any material changes to the portfolios. We are confident that the following Sanlam Smoothed Bonus portfolios used by the Sanlam Umbrella Fund will comply with the final standard:

  • Sanlam Monthly Bonus Fund
    Used either on its own or as part of our Volatility Protection Strategy
  • Sanlam Stable Bonus Portfolio
    Used either on its own or as part of our Lifestage Strategies
  • Sanlam Progressive Smooth Bonus Fund

Once the standard has been finalised, the Fund will communicate further with clients to confirm the eligibility of these portfolios .

Danie van Zyl:
Head : Sanlam Guaranteed Investments