Sanlam Launches First Tracker Fund

SANLAM Namibia has launched a tracker fund, a first of its kind in Namibia that will track South African listed Property Index on the Johannesburg Stock Exchange.

Sanlam said in a statement that the Sanlam Namibia Property Fund tracker fund can be defined as a fund that 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. This eliminates human intervention and judgment to a large degree. Such funds have become popular worldwide as investors seek cheaper alternatives to actively managed funds.

Funds that are actively managed and not according to 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.

“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,” said Wikus Fourie, Business Development Manager at Sanlam Namibia Unit Trusts.