Monthly Factsheet | June 2014

satrix rafi 40 index fund

Fund Objective

Top 10

This is a pure equity fund that aims to replicate the FTSE/JSE RAFI40
Index. The appeal for an investor is the alternate weighting methodology
(discussed below) to the traditional FTSE/JSE Top 40, which is a market
cap weighted index.

Securities

% of Portfolio

BHP Billiton

10.21

Anglos

10.09

MTN

8.23

Sasol

7.63

SAB Miller

6.57

Stanbank

5.31

Old Mutual

5.07

Richemont

3.82

Sanlam

2.54

Bidvest

2.54

Fund Strategy
We believe that the benchmark choice and resulting returns form the most
important elements of an equity strategy - by investing in a passive
vehicle the returns to investment strategies are known. By applying a full
replication strategy there is no risk of deviation from the chosen
benchmark.
Why choose this fund?
This fund is ideal for the investor who seeks general market
performance through a well-diversified equity portfolio at low cost.
The FTSE/JSE RAFI 40 Index represents 40 shares listed on the JSE
based on four equally weighted fundamental factors: Sales, Cash
Flow, Book Value and Dividend.
The factors considered offer diversification with regards to company
and sector.
The fund offers similar liquidity and capacity as that of a market-cap
weighted index and avoids over exposure to the more over-valued
equities.

Top 10 Holdings as at 30 Apr 2014

Performance (Annualised)
Retail-Class

Fund (%)

Benchmark (%)

1 year

32.43

34.31

3 year

5 year

Fund Information
Classification

SA - Equity - General

Performance (Cumulative)

Portfolio manager

Johann Hugo

Retail-Class

Fund (%)

Benchmark (%)

High

3 year

Benchmark

FTSE/JSE RAFI40 Index (J260)

5 year

Launch date

05 Aug 2011

Minimum investment

Lump sum: R10 000 I Monthly: R500

Fund size

R65.5 million

Last two distributions

Income decl. dates

30 June 2014: 2.64 cents per unit

04 Apr 2014: 11.74 cents per unit
30 Jun I 31 Dec l Special : 04 Apr 2014

Income price dates

1st working day in July and January

Valuation time of fund

17:00

Trading closing Time

17:00

Trustee

Standard Chartered Bank

Risk profile

Portfolio Detail

Fees (Incl. VAT)

Description

(%)

Advice initial fee (max.)

0.00

Manager initial fee

0.00

Advice annual fee (max.)

1.14

Manager annual fee

0.68

Total Expense Ratio (TER)

n/a

Advice fee | Any advice fee is negotiable between the client and their financial advisor. An annual
advice fee negotiated is paid via a repurchase of units from the investor.
Total Expense Ratio (TER ) | The TER for this portfolio cannot be accurately determined as the
history is less than 6 months for the particular period. The TER will be higher than the quoted
service charge of the manager. The portfolio manager may borrow up to 10% of the market value
of the portfolio to bridge insufficient liquidity. This fund is also available via certain LISPS (Linked
Investment Service Providers), which levy their own fees.

Manager Information

Satrix Managers (RF) Pty Ltd (Reg. No. 2004/009205/07). 1st Floor, Three Exchange Square, 87 Maude Street,Sandown, 2146.
PO Box 653477, Benmore, 2010. Tel 0860 111 401 Fax (021) 947 8520. Web: www.satrix.co.za E-mail: unittrusts@satrix.co.za

Collective Investment Schemes in Securities (CIS) are generally medium to long term investments. The value of participatory interests may go down as well as up and past performance is not necessarily a guide to the future. CIS are traded at ruling
prices and can engage in borrowing and scrip lending. Forward pricing is used. 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. The following charges are levied against the portfolio: Management fees, brokerage, auditors fees, bank charges and trustee fees. Portfolio performance is calculated on a NAV to NAV basis and does not
take any initial fees into account. Income is reinvested on the ex-dividend date. Total return performances are published. Actual investment performance will differ based on the initial fees applicable, the actual investment date and the date of
reinvestment of income. A schedule of fees and charges and maximum commissions is available on request from the company/scheme. Commission and incentives may be paid and if so, would be included in the overall costs. Although best efforts
have been used to ensure that the information in this document is reliable, it is not guaranteed for accuracy, completeness and adequacy. The information contained herein is merely a description of certain facts and cannot be considered as
financial advice. Therefore should the user of this document seek financial, tax, legal, and accounting advice the user should obtain his/her own independent advice. Satrix and its officers, directors, agents and employees, do not accept any liability
whatsoever, however arising, for any direct or consequential loss arising from any use of this document or its contents. Satrix Managers is an authorised financial services provider (FSP No. 15658) and is an approved management company under
CISCA. Satrix Managers is a member of the Association for Savings and Investment SA.

Quarterly Comment | June 2014

satrix rafi 40 index fund

Market review
In South Africa, after the weak rand triggered a surprise interest rate
increase in the first quarter, the rand and bond yields continued to
strengthen through May until the release of the Federal Open Market
Committee (FOMC) minutes, which coincided with a number of poor local
economic releases, sending long-bond yields back to the 8.4% level (a 50
basis points move in a matter of weeks) and the rand weakening to the
10.80 ZAR/USD level.

complacency. While the speculative excesses that characterized the

markets in the lead up to 2007 are absent, the markets certainly present
more risk than normal.
Portfolio Manager(s)
Johann Hugo
BCom (Hons)

The downgrade of SAs foreign currency credit rating by S&P towards the
end of June did not help matters, citing poor economic growth against a
backdrop of relatively high current account deficits and rising general
government debt. Both S&P and Fitch expressed a lack of confidence in
the new Cabinet to accelerate much needed reforms in order to boost
economic growth.
Part of the SA economys poor performance was due to the five-month
strike in the platinum industry, the longest SA strike on record. The
additional annual wage increase won through the strike, estimated at
around 1%, certainly does not justify the personal sacrifices of the
workers during the strike. With the aging of the western limb platinum
mines, combined with very high capital costs to sink new deep level
shafts, the outlook for labour is poor.
Over the last quarter, the JSE ignored the volatility in the currency and
bond markets, with the All Share Index moving up in line with international
equity markets to end 7.18% higher for the quarter. Within the market, the
industrial sector outperformed slightly while the financial and resources
sectors underperformed. The diversified miners performed strongly
towards the end of the quarter on the back of a rebound in Chinese PMI
data while the gold and platinum counters underperformed. Counters
exposed to the iron ore price suffered as oversupply of iron ore in the
Chinese market increased. The iron ore price is now trading close to our
long-term expected levels.
The international diversified stocks were once again the strong
performers with the likes of British American Tobacco, SABMiller and
Richemont outperforming. The fast-moving consumer goods (FMCG)
retailers Shoprite, Massmart and Spar underperformed, as did select
clothing retailers, such as Truworths and The Foschini Group. Industrial
counters exposed to the SA economy, such as the manufacturers and the
building and construction sector, continue to underperform on the back of
poor demand and a general oversupply of services.
Within financials, the banks performed well, as did insurers like Discovery
and Sanlam.

Portfolio changes and performance

The Rafi 40 Index experienced an underperforming three months relative
to the market, with a return of 5.48%, which was about 170 basis points
weaker than the All Share Index.
Underweight positions in international diversified industrial shares such as
SABMiller, Richemont and Naspers, were responsible for about half of
this underperformance, while the rest was made up by overweight
positions in gold/platinum shares and African Bank.
Year to date, this portfolio is still outperforming the All Share Index.

Risks and opportunities

Whereas uncertainty is a constant feature in equity markets, it is the
variation in price at which the markets appraise the level of uncertainty
that creates true risk or opportunity. At the current juncture the global
economic outlook is mixed. Valuations in most equity markets are
stretched, while equity market volatility is low, indicating high levels of
complacency. While the speculative excesses that characterized the
Manager Information

Satrix Managers (RF) Pty Ltd (Reg. No. 2004/009205/07). 1st Floor, Three Exchange Square, 87 Maude Street,Sandown, 2146.
PO Box 653477, Benmore, 2010. Tel 0860 111 401 Fax (021) 947 8520. Web: www.satrix.co.za E-mail: unittrusts@satrix.co.za

Collective Investment Schemes in Securities (CIS) are generally medium to long term investments. The value of participatory interests may go down as well as up and past performance is not necessarily a guide to the future. CIS are traded at ruling
prices and can engage in borrowing and scrip lending. Forward pricing is used. 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. The following charges are levied against the portfolio: Management fees, brokerage, auditors fees, bank charges and trustee fees. Portfolio performance is calculated on a NAV to NAV basis and does not
take any initial fees into account. Income is reinvested on the ex-dividend date. Total return performances are published. Actual investment performance will differ based on the initial fees applicable, the actual investment date and the date of
reinvestment of income. A schedule of fees and charges and maximum commissions is available on request from the company/scheme. Commission and incentives may be paid and if so, would be included in the overall costs. Although best efforts
have been used to ensure that the information in this document is reliable, it is not guaranteed for accuracy, completeness and adequacy. The information contained herein is merely a description of certain facts and cannot be considered as
financial advice. Therefore should the user of this document seek financial, tax, legal, and accounting advice the user should obtain his/her own independent advice. Satrix and its officers, directors, agents and employees, do not accept any liability
whatsoever, however arising, for any direct or consequential loss arising from any use of this document or its contents. Satrix Managers is an authorised financial services provider (FSP No. 15658) and is an approved management company under
CISCA. Satrix Managers is a member of the Association for Savings and Investment SA.