Tax Efficient Alternative Cash Funds

Alternative Offerings

Tax Efficient Alternative Cash Funds: Improved after-tax performance on discretionary cash

Tax Efficient Alternative Cash Funds

The SAIF (Sanlam Alternative Income Fund) and SDIFOF (Sanlam Diversified Income Fund of Funds) are designed as discretionary cash offerings, providing suitable investors with:

  • Reduced income tax liability
  • Improved after-tax performance and
  • Liquidity.

The Sanlam Alternative Income Fund, launched in May 2007, is a conservative unit trust that aims to produce more tax-efficient returns than those produced by money market funds. The fund invests mainly in dividend yielding redeemable preference shares issued by the major banks and financial institutions. With this strategy the fund achieves a AA- national scale fund rating by Global Credit Ratings Co (Pty) Ltd, and produces predominantly dividend returns. The fund is highly liquid, offering investors 24-hour liquidity and monthly income distribution. The fund targets a constant unit price of R1.00, thus no capital gains tax implications.

Suitable investors
Conservative high net worth individuals, trusts and companies with a short-term investment horizon, looking for liquidity and more tax-efficient returns than those offered by money market funds.

The Sanlam Diversified Income Fund of Funds, launched in March 2009, is a conservative unit trust that aims to produce more tax-efficient returns than those produced by money market and enhanced cash funds. Over a rolling 12-month period, the fund invests a targeted 60% in the Sanlam Alternative Income Fund, the balance being allocated mainly to income funds. This strategy results in a total return profile that is predominantly dividends and capital growth. Capital preservation is front of mind, with no month-on-month capital drawdowns since inception. The fund is highly liquid, offering investors 48-hour liquidity and monthly income distribution. The Sanlam Diversified Income Fund of Funds is available via the Glacier, Momentum, Stanlib, PPS and ABSA platforms.

Suitable investors
Conservative high net worth individuals, trusts and companies with a short-term investment horizon, looking for liquidity and more tax-efficient returns than those offered by money market and enhanced cash funds.

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