The objective of this portfolio is to provide investors with income and a focus on capital preservation over the medium term. The portfolio aims to generate a return of STEFI + 1.5% p.a. over any rolling 18-month period. The portfolio maintains a low risk profile as it is limited to a maximum of 10% exposure to equities. The portfolio adheres to the guidelines set by Regulation 28.
Characteristics
This is a multi-asset income portfolio which means that it may invest in a spectrum of equity, bond, property and money market and tends to display low short-term volatility and capital protection. The portfolio may have a maximum equity exposure of up to 10% and complies with the regulation governing retirement funds. This portfolio may, at the discretion of the portfolio manager, invest up to 45% of the assets outside of South Africa.
Risk Reward Profile
Typically, the lower the risk, the lower the potential return and the higher the risk, the higher the potential return. There is no guarantee that returns will be higher when investing in a portfolio with a higher risk profile. The risk profile for this portfolio is rated as Low, as it may only invest up to 10% in equity securities, both locally and abroad.
Market Risk Equity markets are volatile and the price of equities fluctuate based on a number of factors such as changes in the economic climate, general movements in interest rates and the political and social environment which will also affect the value of the securities held in the unit trust, thereby affecting the overall value of the unit trust. Currency Risk / Foreign Exchange Risk This risk is associated with investments that are denominated in foreign currencies. When the foreign currencies fluctuate against the South African Rand, the investments face currency gains or losses. Concentration Risk Unit Trusts pool the assets of many investors and use the proceeds to buy a portfolio of securities. There are regulations in place which limit the amount that a unit trust may invest in securities, thereby spreading the risk across securities, asset classes and companies. Liquidity Risk This relates to the ability of the unit trust to trade out of a security held in the portfolio at or near to its fair value. This may impact on liquidity and in the case of foreign securities, the repatriation of funds. Credit Risk Credit risk arises where an issuer of a non-equity security or a swap is unable to make interest payments or to repay capital. The Fund may be exposed to credit risk on the counterparties in relation to instruments such as cash, bonds and swaps that are not traded on a recognised exchange. The possibility of the insolvency, bankruptcy or default of a counterparty with which the Fund trades such instruments, could result in losses to the Fund. Total Return Swaps Risk This portfolio may invest in total return swaps. Total return swaps are unlisted instruments issued by a bank to provide the return of a specific index. Therefore, the equity exposure in this portfolio is derived through the total return swap and not by physically holding the equities in the portfolio. The value of the instrument is directly linked to the performance of the basket of assets per the index and will fluctuate in line with the daily market movements. Inflation Risk The risk of potential loss in the purchasing power of your investment due to a general increase of consumer prices. Tax Risk This risk relates to any change to tax laws or to the interpretation of existing tax laws which has an impact on the manner in which unit trusts are taxed. Compliance Risk This refers to the risk of not complying with the legislation, regulations, prescribed investment limits and internal policies and procedures by the manager or the portfolio manager. Political Risk The risk that investment returns could suffer as a result of a country’s political changes or instability in the country. Instability could come from changes in the country’s government, policy makers or military. Average Weighted Costs The average weighted cost of underlying funds is calculated using the latest available Total Investment Charges (TIC) of the underlying funds and their static weightings at month end on the selected Platform. This will vary daily as the actual weightings of the underlying funds fluctuate. The abovementioned fees include VAT but exclude Investment manager, Financial Advisor, Consulting and Platform fees.
DISCLOSURES
Sources Performance sourced from Morningstar and Portfolio Analytics Consulting (Pty) Ltd, for a lump sum using NAV-NAV prices with income distributions reinvested. CPI for all urban areas sourced from FactSet. Asset Allocation and Top 10 holdings data compiled by Global Investment Reporting SA ("GIRSA”). Asset allocation and Top 10 holdings data are lagged by one month. FAIS Conflict of Interest Disclosure The annual fees for the model portfolio include a fee of 0.115% payable to Synergy and a fee of 0.115% payable to Analytics Consulting. All fees stated are inclusive of VAT. Please note that in most cases where the Financial Services Provider (FSP) is a related party to the portfolio manager, the FSP/distributor may earn additional fees other than those charged by the portfolio manager. It is the FSP's responsibility to disclose such additional fees to the investor. Characteristics This is a multi-asset income portfolio which means that it may invest in a spectrum of equity, bond, property and money market and tends to display low short-term volatility and capital protection. The portfolio may have a maximum equity exposure of up to 10% and complies with the regulation governing retirement funds. This portfolio may, at the discretion of the portfolio manager, invest up to 45% of the assets outside of South Africa. Risk Reward Profile Typically, the lower the risk, the lower the potential return and the higher the risk, the higher the potential return. There is no guarantee that returns will be higher when investing in a portfolio with a higher risk profile. The risk profile for this portfolio is rated as Low, as it may only invest up to 10% in equity securities, both locally and abroad.
THE FINE PRINT
*Returns are net of Total Investment Charges (TIC) and for periods greater than one year the returns have been annualised. Returns prior to launch of the portfolio are simulated based on the returns of the underlying funds at their initial weightings. Post launch returns are simulated based on the current weightings of the initial investment on the selected Platform, where applicable.
**The average weighted cost of underlying funds is calculated using the latest available Total Investment Charges (TIC) of the underlying funds and their static weightings at month end on the selected Platform. This will vary daily as the actual weightings of the underlying funds fluctuate. The above mentioned fees include VAT but exclude Investment manager, Financial Advisor, Consulting and Platform fees.
The information and opinions contained in this document are recorded and expressed in good faith and in reliance on source believed to be credible. No representation, warranty, undertaking or guarantee of whatever nature is given on the accuracy and/or completeness of such information on the correctness of such opinions Synergy and/or Analytics Consulting will have no liability of whatever nature and however arising in respect of any claim, damages, loss or expenses suffered directly or indirectly by the investor or the investor's financial advisor acting on the information contained in this document. Furthermore, due to the fact that neither Synergy or Analytics Consulting act as the investor's financial advisor, they have not conducted a financial needs analysis and will rely on the needs analysis conducted by the investor's financial advisor. Synergy and Analytics Consulting recommend that investors and financial advisors take particular care to consider whether any information contained in this document is appropriate given the investor's objectives, financial situation and particular needs in view of the fact that there may be limitations in the appropriateness of any advice provided No guarantee of investment performance or capital protection should be inferred from any of the information contained in this document. The value of participatory interests may go down as well as up and past performance is not necessarily a guide to future performance. Sources: Performance sourced from Morningstar and Analytics Consulting, for the periods ending at the month end date of this MDD, for a lump sum using NAV-NAV prices with income distributions reinvested. CPI for all urban areas sourced from FactSet. Asset Allocation data compiled by Analytics Consulting. Contact Details Synergy Multi Managers (Pty) Ltd is an authorised Financial Services Provider, FSP No. 46159. Tel: (011) 781 3341 Web: www.synergymm.co.za
Portfolio Analytics Consulting (Pty) Ltd is an authorised Financial Services Provider, FSP No. 18490. Tel 021 936 9500 Web: www.analyticsconsulting.co.za
