Sanlam Limited · JSE:SLM
Sanlam — Corporate Update (April 2020)
31 slides from Sanlam's corporate update, Apr 17, 2020
Slide 1: Guidelines for this Webinar
Guidelines for this Webinar Switch off Cameras Ensure your audio is muted Send through Questions in Chat Box, these will be addressed at the end This Webinar is not recorded The slide deck will be made available via https://www.sanlam.co.za/corporate/Pages/covid-19.aspx
Slide 2: Investing Through the Pandemic
INVESTING THROUGH THE PANDEMIC Darryl Moodley 17 April 2020 Insurance | Financial Planning | Retirement | Investments | Wealth
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Slide 4: COVID-19
COVID-19
Slide 5: History of Pandemics
HISTORY OF PANDEMICS THROUGHOUT HisTORY, as humans sprea Antonine Plague —s Pingue of Justinian 41-542 20:50M @ Japanese Smolipox Epidemic? Black Death (Bubonic Plague) 200M Here ate deadly pande Antonine Plag navirus (COVID-19) Ni Small Pox 56M ‘th Century Great Plagues 3M ‘18th Century Great Plagu
Slide 6: Why Is This Outbreak Different..
WHY IS THIS OUTBREAK DIFFERENT.. to previous incidences such as SARS? SOURCE: SCHRODERS (2020)
Slide 7: Mapping the coronavirus outbreak
Mapping the coronavirus outbreak As of 7:30pm Apr 16 BST Confirmed cases Deaths 2,146,062 132,758 FRANCE fo} CHINA e) aS ; eG ° " BRAZIL ° 1,769 Graphic: Steven Bernard and Cale Tilford Sources: Johns Hopkins University, CSSE; Worldometers Orr
Slide 8: Impact on Investment Markets
IMPACT ON INVESTMENT MARKETS March 2020 3 months 1 Year 3 Years 5 Years 10 Years Equities (All Share Index) -12.1% -21.4% -18.4% -2.1% -0.1% 7.7% Equities (Capped SWIX) -16.7% -26.6% -24.5% -7.4% -3.8% n/a Local Property -36.6% -48.2% -47.9% -23.0% -13.5% 2.8% Bonds -9.7% -8.7% -3.0% 5.3% 5.2% 7.4%
Slide 9: Bear Market Rally?
BEAR MARKET RALLY? Month to Year to To 14 April 2020 1 Year 3 Years 5 Years Date Date Equities (All Share Index) 12.5% -11.6% -11.7% 0.9% 1.8% Equities (Capped SWIX) 14.2% -16.1% -17.4% -4.1% -1.8% Local Property 24.9% -35.2% -36.1% -17.1% -9.5% Bonds 3.4% -5.6% -0.8% 6.2% 5.7% Cash 0.6% 1.7% 7.2% 7
Slide 10: Have Correlations Gone to One? (I)
HAVE CORRELATIONS GONE TO ONE? (I) Short answer: Nearly! SOURCE: TS LOMBARD RESEARCH, ALPINE MACRO (2020)
Slide 11: Have Correlations Gone to One? (II)
HAVE CORRELATIONS GONE TO ONE? (II) Short answer: Nearly! SOURCE: TS LOMBARD RESEARCH, ALPINE MACRO (2020)
Slide 12: Moody's Downgrade
MOODY’S DOWNGRADE SOURCE: IRESS (2020)
Slide 13: SA Responds
SA RESPONDS Measures to support businesses Co-ordinated monetary easing globally SARB cut the repo rate by another 100 basis points to 4.25% Follows the 100 basis points (bps) cut in March 2020, bringing the cumulative cuts for the year to 200 basis points. SARB forecasts GDP in 2020 to contract by
Slide 14: Sanlam Lifestage Strategy
SANLAM LIFESTAGE STRATEGY
Slide 15: Sanlam Lifestage Strategy
SANLAM LIFESTAGE STRATEGY Accumulation phase Transition Preservation phase Assets split between Porfolio Options 100% Accumulation Accumulation and 1. Inflation Annuity Target portfolio Preservation Phase 2. Living Annuity Target portfolio 3. Capital Protection 40 6 50 monthly switches 2 0 0 years t
Slide 16: Specialist Portfolio Structure
SPECIALIST PORTFOLIO STRUCTURE Best in breed asset managers Asset Class Managers SA Equity Satrix, SMMI equity blend* SA Bond Matrix, Prescient SA Property ABSA, Sesfikile, Satrix SA Cash Coronation, SIM, Terebinth SA Alternatives Blue Ink, Ethos International Equity GinsGlobal, ML Drakens Capital,
Slide 17: Lifestage Accumulation Returns
LIFESTAGE ACCUMULATION RETURNS 9.0% 5.8% 6.2% 6.0% 3.0% 1.2% 1.4% 0.0% -0.6% -0.7% -3.0% -6.0% -9.0% -12.0% -12.1% -11.8% -12.6% -13.0% -15.0% -14.4% -14.9% -18.0% -17.0% -16.9% -21.0% 1 month 3 months 6 months 1 year 3 years 5 years Since Inception Portfolio Composite Benchmark GROSS AS AT 31 MARCH
Slide 18: Our Views
OUR VIEWS Domestic equities are looking exceptionally cheap Bond yields spiked, which we were able to buy into Currency has overshot Monthly transitioning of lifestage switches
Slide 19: Summary of Investment Returns
SUMMARY OF INVESTMENT RETURNS Sanlam Lifestage Strategy 1 year 3 years 5 years 10 years Sanlam Lifestage Accumulation Portfolio -12.6% -0.6% 1.2% n/a Sanlam Lifestage Living Annuity Target Portfolio -8.6% 1.2% 3.1% n/a Sanlam Lifestage Inflation Annuity Target Portfolio -7.4% -1.3% 0.8% n/a Sanlam L
Slide 20: Effect of Yields
EFFECT OF YIELDS on the price of a guaranteed life annuity since Jan 2020 940 000 890 000 840 000 Premium 790 000 740 000 690 000 Male, Age 65, Married, R5000 p.m.
Slide 21: Sanlam Capital Protection Portfolio
Sanlam Capital Protection Portfolio
Slide 22: Why Is Smoothing Beneficial for Retirees?
WHY IS SMOOTHING BENEFICIAL FOR RETIREES? Joe Joe retires Sanlam Stable Bonus Portfolio Average Balanced Fund (Global LMW median) Jane Jane retires
Slide 23: Cumulative Gross Returns
CUMULATIVE GROSS RETURNS 5.90 5.40 4.90 4.40 3.90 3.40 2.90 2.40 1.90 1.40 0.90 Stable Bonus Portfolio Global LMW median *March 2020 has been estimated
Slide 24: Capital Protection vs Inflation
CAPITAL PROTECTION VS INFLATION Gross bonuses to 31 March 2020 (annualised) 14.0% 12.0% 11.2% 10.0% 8.4% 8.0% 7.5% 7.6% 6.0% 5.2% 5.2% 4.6% 4.2% 4.0% 2.0% 0.0% 1 year 3 years 5 years 10 years Capital Protection Inflation*
Slide 25: Capital Protection Portfolio: Peer Comparison
CAPITAL PROTECTION PORTFOLIO: PEER COMPARISON Gross bonuses to 31 March 2020 (annualised) 14.0% Capital Protection Portfolio 12.0% OM Absolute Stable Growth 10.0% 2007 series 8.0% Old Mutual Absolute Smooth Growth 2007 series 6.0% Momentum Smooth Growth 4.0% (global) 2.0% Momentum MM Smooth Growth 0
Slide 26: Sanlam Stable Bonus Portfolio vs. Competitors
SANLAM STABLE BONUS PORTFOLIO VS. COMPETITORS Number of months Number of months Number of months Worst monthly with bonuses of with zero / negative with negative bonus during this Since Jan 2007 0.1% or less bonuses bonuses net of fees period, gross of (gross of fees) (gross of fees) (highest fee cl
Slide 27: Funding Levels
FUNDING LEVELS Lowest 2003 Lowest GFC Current 1 May 2003 1 March 2009 1 April 2019 Monthly Bonus Fund 77.4% 88.4% 87.3% Stable Bonus Portfolio 79.0% 89.6% 87.6% Management actions: ⧁ In 2003, opened new bonus series and provided shareholder support. ⧁ During 2009, funding level dropped below 90% for
Slide 28: When Underfunded
WHEN UNDERFUNDED ⧁ Withdrawals & terminations = market value adjustment • Remember guarantee is on benefit payments • Benefit payments = death, disability, resignation, retirement, retrenchment • Benefit payment ≠ selective withdrawal • Selective withdrawal is at lower of book & market value ⧁ Admin
Slide 29: At This Difficult Juncture, Remain Calm..
AT THIS DIFFICULT JUNCTURE, REMAIN CALM.. “Be fearful when others are greedy and greedy when others are fearful” – Warren Buffet “As stakeholders responsible for delivering financial resilience to retirement fund members, we share the duty to maintain our composure and to engage investors so that th
Slide 30: How Can We Support You?
HOW CAN WE SUPPORT YOU? SC COVID page: Webinars, videos https://www.sanlam.co.za/corporate/Pag es/covid-19.aspx Articles Website: http://sanl.am/sebi
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