The Sanlam Progressive Smooth Bonus Fund is a world first, black managed, smoothed bonus product. This multi-manager, diversified investment portfolio offers protection against short term market volatility and a guaranteed return over the longer term. The Progressive Smooth Bonus Fund is managed by 27four Investment Managers and is guaranteed by Sanlam.

In South Africa today there is a lack of investment flows to black managed portfolios particularly within the black managed smoothed bonus portfolios.

As a leading financial services group, Sanlam is responsible for implementing products that will positively shape an inclusive future for the sector and that is in-line with the principles of the Financial Sector Charter.

The Sanlam Progressive Smooth Bonus Fund is the first, black managed, smooth bonus product to be launched in the South African market. The Fund will assist in the growth of Black investment managers by increasing the share of funds allocated to such managers while providing risk management and smoothing, which are the hallmarks of Sanlam’s capabilities.

Although many retirement funds do have a mandate to allocate assets to black asset managers, the difficulty trustees face in fulfilling their mandate is that their members fear investment volatility – these members do not want to see their retirement fund value fall dramatically during a market downturn. As a result, Sanlam has responded to this need by launching the Progressive Smooth Bonus Fund. It is also a statement of our ongoing commitment to prioritizing empowerment as a national economic imperative and to using our skillset to help transform the industry.

The Sanlam Progressive Smooth Bonus Fund is the only smoothed bonus portfolio that provides an opportunity to empower Black asset managers, deliver market related performance and smooth investment returns.

The fund is a ‘win-win’ solution that is well suited to progressive retirement funds, who see the transformation of the financial services industry as a national priority and who value the benefit of smoothed returns that are market related.

The fund supports the growth of black investment managers by allocating funds to such managers and, in doing so, provides them with a platform to compete against established managers in the industry in order to transform the profile of the South African investment management landscape.

The multi-managed portfolio aims to invest in black investment managers who meet the following set of criteria:

• Greater than 50% effective black (South African) ownership with equivalent voting rights,
• Greater than 50% black (South African) board members; and
• Greater than 50% black (South African) investment professionals

The Sanlam Progressive Smooth Bonus Fund smoothes out volatile investment returns by declaring monthly bonuses. These monthly bonuses effectively reduce the roller-coaster ride that investors experience in market-linked portfolios by ensuring a much smoother return profile. Such portfolios have performed particularly well for investors in the volatile and uncertain global economic context brought on by the 2008 financial crisis.

27four is a leading independent South African-based multi-manager. The company provides unique product solutions and portfolio customisation options focused on addressing the evolving needs of retirement funds and individual investors.

The Sanlam Progressive Smooth Bonus Fund is managed by 27four Investment Managers.

The introduction of the Progressive Smooth Bonus Fund offers a financial vehicle for investors to play a tangible role in contributing to transformation of the financial services sector and the South African economy as whole. The asset management industry has evolved at a very slow pace since the advent of South Africa’s democracy in 1994. The slow pace of transformation has been highlighted in the 2017 BEE-conomics survey, and emphasises that despite the growth in the number of Black asset managers, many of these firms have struggled to materially penetrate the retirement fund market. Retirement funds are the biggest allocator of institutional assets and as such have a major role to play in helping transform the asset management industry.

Although many retirement funds do have a mandate to allocate assets to black asset managers, the difficulty trustee’s face in fulfilling their mandate is that their members fear investment volatility – these members do not want to see their retirement fund value fall dramatically during a market downturn. As a result, Sanlam has responded to this need by launching the Progressive Smooth Bonus Fund. It is also a statement of our ongoing commitment to prioritizing empowerment as a national economic imperative and to using our skillset to help transform the industry.