Raging bull for SIM’s enhanced yield fund

Chris Hamman, Head of Fixed Interest at Sanlam Investments.

The Sanlam Investment Management Enhanced Yield Fund came out tops at the prestigious Raging Bull awards held in Johannesburg on 28 January. It scooped the award for South Africa’s top Interest Bearing Short Term fund.

With global cash yields at historic lows, conservative investors and their advisers have been searching high and low for funds that eke out more than a money market fund, but still provide capital stability. The Fund was launched almost four years ago specifically to fit into this niche – and already it is reaping in the accolades.

Awards for asset-specific categories of funds, such as fixed-interest categories, are based mainly on straight performance calculated by ProfileData over a three-year period. Over the three years to 31 December 2014, the Sanlam Investment Management Enhanced Yield Fund returned 7.14% p.a. compared to its benchmark of 6.07%.

When measuring the fund’s returns over rolling one-year periods, it outperformed cash 87% of the time, with a phenomenal average outperformance of 1.51% p.a. (as measured up to 31 December 2014).

The SIM Enhanced Yield Fund invests in slightly riskier interest bearing instruments than a money market fund, but portfolio manager, Chris Hamman, keeps a close eye on the risk in the fund and considers the capital stability over any one-year period. Says Hamman, “I avoid undue concentration risk, but do take on somewhat more credit and curve risk than a cash investment, which means negative monthly returns are possible.”

Sanlam Investment Management (SIM) boasts one of the largest fixed interest teams in South Africa, which enables it to research a wide spectrum of credit assets within the fixed interest asset class – a distinct competitive advantage.

At last year’s Raging Bull Awards, SIM also walked away with the award for Top Performance by a Domestic Collective Investment Scheme, earned by the Sanlam Investment Management Industrial Fund. Not only did it perform best over the three years to 31 December 2013, but also best over the 10-year period to 31 December 2013. All SIM’s funds are driven by one house view process, and these recent awards demonstrate SIM’s ability as an investment house with skill in all major asset classes.