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Sterling Invest Model Portfolios
The world of investment management has developed into a complex industry with an overwhelming range of investment options now available. This makes investment selection and administration particularly onerous for financial advisors. The requirement to stay abreast of all these investment options takes time away from the advisor’s primary role, to provide trusted financial advice to their valued clients. This is where Sterling Invest comes in. Sterling Invest Model Portfolio Services (SIMPS) is the financial advisor’s outsourced unit trust investment partner.
We manage a comprehensive range of Model Unit Trust Portfolios that we can help you plug into your existing advice process. You then simply have to choose the relevant model that makes the most sense for each of your client’s unique needs and direct their investment into it.
The models are actively managed using our SIMP Alpha Process and incorporate our best investment views. We handle everything associated with the models including administration, reporting, asset allocation, fund selection and rebalancing. You can count on us to take care of the nitty-gritty investment decisions behind the scenes, so you can focus on what you do best, dispensing trusted financial planning advice to your clients.
Included in our range of 16 models, are 7 Ethical (Shariah-friendly) model portfolios. The models are currently accessible via the Sanlam Glacier & Allan Gray investment platforms (access via other platforms can be arranged upon request).
What exactly is a model unit trust portfolio?
- To develop model portfolios based on the proposed mandates provided by our financial advisor partners
- To design the appropriate asset class allocation, investment time horizon, return expectation and risk tolerance level for each model
- To identify the best ETF’s, fund managers and underlying unit trust funds from around the world to include in the models
- To optimally blend these ETF’s, fund managers and unit trust funds together within each model portfolio
- To ensure each model portfolio is appropriately diversified across asset classes, geographies, investment strategies and investment styles.
- To rebalance the portfolio prudently when necessary
- To continuously monitor the fund managers of the underlying unit trust funds, in terms of their investment performance, changes to their investment teams and investment styles.
- To continuously assess the risk and return attributes of each model portfolio in relation to the investment mandate, and take action when warranted.
- To prepare factsheets that accurately present the portfolio’s positioning, investment performance and risk metrics
- Using our scale, negotiating reduced platform and investment management fees for all end investors within the model portfolios
This is a low risk portfolio which uses a conservative allocation to growth investments to achieve its objectives. The portfolio is generally aimed at the risk averse investor, or those investors with a short time horizon (3 years or less). The fund manager aims to specifically minimise capital drawdowns over rolling 12 month periods. Focus is given to minimising portfolio costs as an efficient way to enhance the net yield to clients. The portfolio is able to invest up to 30% offshore, however is cognisant of the additional volatility which the currency exposure brings to the portfolio.
Model Objectives
- Aims to achieve inflation plus 3% per annum over rolling 3 year periods
- Consistent and moderate level of real capital growth
- Moderate income generation
- Low levels of capital volatility and drawdowns
RISK PROFILE: This portfolio has a low risk profile which is geared towards minimising capital drawdown, but may experience periods of negative performance due to currency and capital volatility.
This is a long term portfolio for investors wishing to save for retirement through a diversified portfolio. It aims to have maximum exposure to growth assets within the Regulation 28 limits, enabling it to target maximum returns while still being compliant with the Pension Funds Act. The portfolio is suited to investors with long term time horizons, aiming to optimise their risk/return tradeoff over rolling 5 year periods.
Model Objectives
- Aims to achieve inflation plus 6% per annum over rolling 5 year periods
- High level of real capital growth
- Low income generation
RISK PROFILE: This is a long term portfolio which is diversified across asset classes aiming to provide investors with high risk-adjusted returns.
This portfolio is designed for income-drawing clients not restricted to Regulation 28 rules that require a moderate to high level of real capital growth over time. The portfolio is designed to have relatively low drawdowns to protect the capital base. A maximum of 5% per annum of income drawings is recommended. Specific attention is given to risk management, diversification and income generation as meaningful sources of return.
Model Objectives
- Aims to achieve inflation plus 5% per annum over rolling 5 year periods
- Suited to investors drawing income
- Moderate level of real capital growth
- Moderate income generation
- Lower capital drawdowns than a typical balanced fund
RISK PROFILE: This is a moderate risk portfolio which is diversified across asset classes to provide investors with good risk-adjusted returns. The portfolio prioritises income generation and will typically have lower volatility and drawdowns than an average balanced fund.
This portfolio has been constructed to maximise capital growth to investors through investment in local equities. There will be minimal amounts of cash held over time, as such total volatility levels will be high, with potential for substantial capital drawdowns.
Model Objectives
- Aims to achieve inflation plus 7% per annum over rolling 7 year periods
- High level of real capital growth
- Low levels of income generation
RISK PROFILE: This is an aggressive, long term portfolio with a full allocation to growth assets. This will result in periods of higher volatility introduced by the asset allocation and exposure to growth assets.
This portfolio has been constructed to maximise capital growth to investors through investment in local and offshore equities. Listed property will also be utilised and there will be minimal amounts of cash held over time. Globally, the portfolio may invest in both developed and emerging market equities to maximise returns, and as such total volatility levels will be high, with potential for substantial capital drawdowns. Returns are earned in Rands, so the offshore holdings will also experience currency volatility.
Model Objectives
- Aims to achieve inflation plus 7% per annum over rolling 7 year periods
- High level of real capital growth
- Low levels of income generation
RISK PROFILE: This is an aggressive, long term portfolio with a full allocation to growth assets. This will result in periods of higher volatility introduced by the asset allocation and exposure to growth assets.
This portfolio has been constructed to maximise capital growth to investors through investment in local equities. There will be minimal amounts of cash held over time, as such total volatility levels will be high, with potential for substantial capital drawdowns.
Model Objectives
- Aims to achieve inflation plus 7% per annum over rolling 7 year periods
- High level of real capital growth
- Low levels of income generation
RISK PROFILE: This is an aggressive, long term portfolio with a full allocation to growth assets. This will result in periods of higher volatility introduced by the asset allocation and exposure to growth assets.
This is an equity growth fund which delivers real returns to clients through exposure to offshore equity and property in both developed and emerging markets. The aim of the portfolio is to generate high levels of capital growth over long term investment horizons. The returns are generated in Rands, and as such investors are exposed to the fluctuations of the Rand where a weakening rand serves to boost local returns. The risk profile of the portfolio is high as a consequence of the currency volatility and underlying asset class holdings.
Model Objectives
- Aims to achieve inflation plus 7% per annum over rolling 7 year periods
- High level of real capital growth
- Low levels of income generation
RISK PROFILE: This is an aggressive, long term portfolio with a full allocation to growth assets. This will result in periods of higher volatility introduced by the asset allocation and exposure to global growth assets and currency exposure.
This portfolio is designed to deliver capital growth to clients over a long term time horizon through property exposure. It has an aggressive allocation to growth assets, where up to 100% of the portfolio will typically be invested in property. The portfolio will hold offshore exposure to enhance returns and diversify risk over regions. The aggressive return target could introduce periods of high volatility over the short term.
Model Objectives
- Aims to achieve inflation plus 5% per annum over rolling 5+ year periods
- Income generated through property fund distributions
RISK PROFILE: This is an aggressive, long term portfolio that will be fully invested in property over time. This will result in periods of higher volatility introduced by the asset allocation and exposure to offshore assets.
This portfolio is designed for income-drawing clients not restricted to Regulation 28 rules that require a moderate to high level of real capital growth over time. The portfolio is designed to have relatively low drawdowns to protect the capital base. A maximum of 5% per annum of income drawings is recommended. Specific attention is given to risk management, diversification and income generation as meaningful sources of return.
Model Objectives
- Aims to achieve inflation plus 5% per annum over rolling 5 year periods
- Suited to investors drawing income
- Moderate level of real capital growth
- Moderate income generation
- Lower capital drawdowns than a typical balanced fund
RISK PROFILE: This is a moderate risk portfolio which is diversified across asset classes to provide investors with good risk-adjusted returns. The portfolio prioritises income generation and will typically have lower volatility and drawdowns than an average balanced fund.
This portfolio has been constructed to maximise capital growth to investors through investment in local and offshore equities. Listed property will also be utilised and there will be minimal amounts of cash over time. Globally the portfolio may invest in both developed and emerging market equities to maximise returns, and as such total volatility levels will be high, with potential for substantial capital drawdowns. Returns are earned in Rands, so the offshore holdings will also experience currency volatility.
Model Objectives
- Aims to achieve inflation plus 7% per annum over rolling 7 year periods
- High level of real capital growth
- Low levels of income generation
RISK PROFILE: This is an aggressive, long term portfolio with a full allocation to growth assets. This will result in periods of higher volatility introduced by the asset allocation and exposure to growth assets.
This portfolio aims to deliver long term capital growth to SA domiciled investors. It does so through an equity focus, both local and offshore. The portfolio will at times aim to manage risk through investment in other asset classes such as bonds, cash and property, but will typically be majority invested in equities. It aims for an aggressive return target, and as such may experience periods of high volatility.
Model Objectives
- Aims to achieve inflation plus 7% per annum over rolling 7 year periods
- High level of real capital growth
- Low levels of income generation
RISK PROFILE: This is an aggressive, long term portfolio with a full allocation to growth assets. This will result in periods of higher volatility introduced by the asset allocation and exposure to growth assets.
Structure Availability
| Structure | Flexible Income | Stable | Balanced | Balanced Income | SA Equity | Global Equity | Property | TFSA |
| Discretionary Unit Trust | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ |
| Tax-Free Savings | X | X | X | X | X | X | X | ✓ |
| Endowment | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ |
| Retirement Funds | ✓ | ✓ | ✓ | X | X | X | X | X |
| Living Annuity | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ |
| Structure | Ethical Income | Ethical Stable | Ethical Balanced | Ethical Balanced Income | Ethical Flexible Equity | Ethical TFSA |
| Discretionary Unit Trust | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ |
| Tax-Free Savings | X | X | X | X | X | ✓ |
| Endowment | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ |
| Retirement Funds | ✓ | ✓ | ✓ | X | X | X |
| Living Annuity | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ |
Model Unit Trust Portfolio Range
In total, we manage 16 distinct model portfolios across the risk spectrum, each designed to meet a specific investment objective. Our portfolios are segmented into Conventional and Ethical variants, the primary difference being that Ethical portfolios comprise of largely Shariah Compliant underlying investment funds. Two of the models are priced in USD and offer unique investment exposure to global fund managers.
A conservative, income-focused portfolio positioned as a superior alternative to holding cash or bank term deposits. It is suitable for risk averse investors, or those looking to set aside funds for a near term expense or liability.
Risk Profile: Low
Return Objective: CPI + 1%
Income Yield: High
Potential Drawdown: Low
Investment Horizon: 1 Year+
Offshore Exposure: 0% - 10%
An investment portfolio with a conservative allocation to growth assets. A specific aim is to minimise capital drawdowns over rolling 12-month periods. The portfolio is suitable for risk averse investors, or those seeking moderate growth with a relatively short investment time horizon.
Risk Profile: Low-Medium
Return Objective: CPI + 3%
Income Yield: Moderate
Potential Drawdown: Low
Investment Horizon: 3 Years+
Offshore Exposure: 20% - 30%
An investment portfolio designed for investors long-term retirement savings. The portfolio aims for maximum exposure to growth assets within the Regulation 28 limits, enabling it to target maximum returns while still being compliant with the Pension Funds Act.
Risk Profile: Medium-High
Return Objective: CPI + 5%
Income Yield: Low
Potential Drawdown: Moderate
Investment Horizon: 5 Years+
Offshore Exposure: 20% - 30%
An investment portfolio designed and managed to maximise capital growth for investors through an equal allocation to local and offshore equity. The portfolio is suitable for investors with a long investment time horizon.
Risk Profile: High
Return Objective: CPI + 6%
Income Yield: Low
Potential Drawdown: High
Investment Horizon: 7 Years+
Offshore Exposure: 40% - 60%
An investment portfolio that is compliant with applicable TFSA regulations. It’s objective is to maximise returns through investment in a diversified mix local and offshore growth assets. The portfolio is suited to investors with a long investment time horizon, within the tax-free savings investment structure.
Risk Profile: High
Return Objective: CPI + 7%
Income Yield: Low
Potential Drawdown: High
Investment Horizon: 7 Years+
Offshore Exposure: 40% - 60%
An investment portfolio designed and managed to maximise capital growth in US dollars, through investment in a diversified mix of global growth assets in both developed and emerging markets. The portfolio is priced in USD and is suited to investors with long term investment time horizons.
Risk Profile: High
Return Objective: CPI + 6%
Income Yield: Low
Potential Drawdown: High
Investment Horizon: 7 Years+
Offshore Exposure: 100%
A portfolio designed for income-drawing clients that require a moderate to high level of real capital growth over time. Specific attention is given to risk management, diversification, and income generation as meaningful sources of return. The portfolio is suited to investors with long term investment time horizons that require an income drawdown of 5% per annum or less.
Risk Profile: Medium
Return Objective: CPI + 5%
Income Yield: Moderate
Potential Drawdown: Moderate
Investment Horizon: 5 Years+
Offshore Exposure: 20% - 40%
A conservative, income-focused portfolio positioned as a superior alternative to holding cash or bank term deposits. It is suitable for risk averse investors, or those looking to set aside funds for a near term expense or liability.
Risk Profile: Low
Return Objective: CPI + 1%
Income Yield: High
Potential Drawdown: Low
Investment Horizon: 1 Year+
Offshore Exposure: 0% - 10%
An investment portfolio with a conservative allocation to growth assets. A specific aim is to minimise capital drawdowns over rolling 12-month periods. The portfolio is suitable for risk averse investors, or those seeking moderate growth with a relatively short investment time horizon.
Risk Profile: Low-Medium
Return Objective: CPI + 3%
Income Yield: Moderate
Potential Drawdown: Low
Investment Horizon: 3 Years+
Offshore Exposure: 20% - 30%
An investment portfolio designed for investors long-term retirement savings. The portfolio aims for maximum exposure to growth assets within the Regulation 28 limits, enabling it to target maximum returns while still being compliant with the Pension Funds Act.
Risk Profile: Medium-High
Return Objective: CPI + 5%
Income Yield: Low
Potential Drawdown: Moderate
Investment Horizon: 5 Years+
Offshore Exposure: 20% - 30%
An investment portfolio designed and managed to maximise capital growth for investors through a maximum allocation to South African listed equities. The portfolio is suitable for investors with a long investment time horizon.
Risk Profile: High
Return Objective: CPI + 7%
Income Yield: Low
Potential Drawdown: High
Investment Horizon: 7 Years+
Offshore Exposure: 0%
An investment portfolio designed and managed to maximise capital growth for investors through a maximum allocation to Globally listed equities. The portfolio is suitable for investors with a long investment time horizon.
Risk Profile: High
Return Objective: CPI + 7%
Income Yield: Low
Potential Drawdown: High
Investment Horizon: 7 Years+
Offshore Exposure: 100%
An investment portfolio designed to deliver income returns and capital growth to clients through listed property exposure. It The portfolio will hold both local and globally listed property assets to enhance returns and diversify risk over regions. The portfolio is suitable for investors with a long investment time horizon.
Risk Profile: High
Return Objective: CPI + 5%
Income Yield: High
Potential Drawdown: High
Investment Horizon: 7 Years+
Offshore Exposure: 30% - 60%
A portfolio that is compliant with applicable TFSA regulations. It’s objective is to maximise returns through investment in a diversified mix local and offshore growth assets. The portfolio is suited to investors with a long investment time horizon, within the tax-free savings investment structure.
Risk Profile: High
Return Objective: CPI + 7%
Income Yield: Low
Potential Drawdown: High
Investment Horizon: 7 Years+
Offshore Exposure: 40% - 60%
An investment portfolio designed and managed to maximise capital growth in US dollars, through investment in a diversified mix of global growth assets in both developed and emerging markets. The portfolio is priced in USD and is suited to investors with long term investment time horizons.
Risk Profile: High
Return Objective: CPI + 6%
Income Yield: Low
Potential Drawdown: High
Investment Horizon: 7 Years+
Offshore Exposure: 100%
A portfolio designed for income-drawing clients that require a moderate to high level of real capital growth over time. Specific attention is given to risk management, diversification, and income generation as meaningful sources of return. The portfolio is suited to investors with long term investment time horizons that require an income drawdown of 5% per annum or less.
Risk Profile: Medium
Return Objective: CPI + 5%
Income Yield: Moderate
Potential Drawdown: Moderate
Investment Horizon: 5 Years+
Offshore Exposure: 20% - 40%