The fund was launched in August 2018 to invest in listed securities that derive their value from underlying real assets and targets CPI +4% over a full investment cycle. Investments can be via REITs, investment trusts or specialist companies with a focus on physical assets.
Introducing Sanlam Real Assets Fund
August 2019 - Latest commentary
Transparency - August marks the first year anniversary for the Sanlam Real Assets Fund. Since inception the fund has delivered +12.3% against the MSCI World +1.4% and the FTSE 100 -0.3%. Whilst in its infancy, the fund has exhibited strong capital preservation characteristics during a time when uncertainty and volatility have been on the rise. The Real Assets Fund maximum drawdown since inception is -3.4% vs the MSCI World and FTSE 100 at -18.1% and -12.7% respectively. Over the last 12 months, two prevailing narratives have steered markets - US trade wars and Brexit. Today both of these issues remain unresolved and as it stands the political landscape has made little progress.
In the UK, new PM Boris Johnson has initiated a suspension of Parliament in an attempt to accelerate negotiations and agree a deal before the end of October. Meanwhile in the US, President Trump's combative trade rhetoric continued to weigh on equity markets and the month ended with the S&P 500, MSCI World, and FTSE 100 indices down -1.58%, -2.05% and -4.08% respectively. The Sanlam Real Assets Fund was up +1.49% over the month.
During the month of August, the fund saw positive contributions from infrastructure, renewable energy and property. Other alternatives detracted from performance. A number of asset acquisitions in the companies came to a close over the period, including a music catalogue, a waste-to-energy project, anaerobic digestion plants, a supermarket and a student accommodation development. The background for renewables in the UK continued to look favourable despite a brief wind farm power outage following lightning strikes. Crown consent on 7 existing projects was granted to expand capacity, amounting to levels in excess of 2.8GW.
Activity - We continued to deploy inflows to the fund in the open market. We also participated in one capital raise during August, the proceeds of which are to go towards acquiring music catalogues.
Previous months’ commentaries are contained within the fund factsheets.