Sanlam Namibia launches first tracker fund
A tracker fund is made of components of an index aiming to mimic the performance of an index by investing in the index as a whole. Index or tracker funds have set rules that dictate how much of each share or instrument in the index to buy and when these instruments or share may be sold.
According to Sanlam, this eliminates human intervention and judgment to a large degree. In a statement released this week, Sanlam said such funds have become popular worldwide as investors seek cheaper alternatives to actively managed funds. Funds managed not according to the index have struggled to outperform relevant indices but yet the investor pay for this regardless of whether performance has been delivered or not. In the property segment active fund managers have failed to outperform the index more than 80% of the time. Wikus Fourie, Business Development Manager at Sanlam Namibia Unit Trusts said: “Namibian clients will benefit through lower fees, because the fund is managed using a passive solution tracking the listed property index on the Johannesburg Stock Exchange. Over a longer period of time, and with the help of compounding, clients increase their overall return. Tracker funds furthermore expose the investor to a wider range of companies in a relevant index, thereby eliminating manager selection bias. Investors also know what they are investing in and what the expected return is going to be.” Sanlam Namibia Property Fund is managed by Johann Hugo and Helena Conradie who have over 14 years’ experience each in managing tracker funds through Sanlam and Satrix.