The objective of the Sanlam Alternative Income Fund (SAIF or the fund) is to offer a liquid, mainly dividend-yielding investment that will track the South African short-term interest rate cycle. Income distributed to investors will aim to exceed the average after tax yield normally received from money market portfolios.
The credit risk is diversified in credit-rated investments of a high credit quality. Investments are in rand-denominated, redeemable, cumulative preference shares and liquid instruments.
The fund has a conservative investment mandate that will follow a risk profile focused on capital preservation subject to strict criteria, in accordance with the requirements of the Collective Investments Schemes Control Act (CISCA).
Why Choose This Fund?
● An ideal core cash holding for investors who have a high marginal tax rate.
● SAIF is the first "new generation" dividend fund in the industry, structured essentially as a preference share conduit fund.
● The portfolio will invest only in redeemable cumulative preference shares and in liquid instruments, and will not invest in non-redeemable (perpetual) preference shares, or preference shares that offer a fixed rate of return.
● A proven market demand exists for an investment product that offers:
- Enhanced yields mainly in the form of tax-free dividends.
- Capital stability in the form of a constant unit price to be maintained.
- No capital gains tax implications.
- Low capital risk.
- No market or interest rate risk.
- Distributions on a monthly basis.
- Investor protection within the highly regulated CIS arena.
Additional Fund Information
● A constant unit price of 100c will be maintained.
● The fund may be closed for new investments.
● The fund has a credit rating of za.AAi from CA-Ratings.
● The return will be in the form of tax free dividends and a portion of taxable interest income.
● The fund offers 48 hour liquidity, subject to the provisions of the deed.
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