Inside the winning approach of the Denker SCI* Balanced Fund

Madalet Sessions, Jan Meintjes

The Denker SCI* Balanced Fund came out on top in the Best Aggressive Allocation Fund category at the Morningstar Awards in March. We are extremely proud of this win, especially considering the tough competition in the category. It is a testament to an innovative approach, dedicated to improving outcomes for investors, and consistent performance over the years. 

Reflecting on the fund’s journey, we asked the portfolio managers, Madalet Sessions and Jan Meintjes, to provide insight into their approach and its results.

1. When this fund was launched in 2017, what did you set out to achieve?

Madalet Sessions:

Our objective from the outset was to provide attractive risk-adjusted returns over the long term. To achieve this, we wanted to create a portfolio that would deliver alpha from Denker Capital’s equity process while mitigating macro risks by exposing investors to a wide range of potential outcomes. It is very common to see implicit macro views sneak into portfolios and we wanted to avoid that.

Our core competence and competitive advantage is understanding businesses and their management teams and valuing these companies. By focussing on what we know, instead of relying on macro expectations, we could build a ‘high information ratio’ portfolio. Sticking to this approach means that the fund should deliver good returns over time at low levels of volatility. This is what we set out to do, and our track record suggests some success in this.

2. What do you attribute the long-term risk-adjusted outperformance to?

Madalet Sessions:

With Jan and I as the portfolio managers, this fund brings together the experience and expertise of all the Denker Capital portfolio managers to generate performance. The combination of specialist global and local stock picking skills across our investment team and our risk management discipline has been the source of returns for investors. This fund truly offers investors the best of Denker Capital in one fund.

In addition to the above, I think that by sticking to our circle of competence and building a diverse portfolio (one that is resilient to macroeconomic surprises) we were able to bank alpha with lower risk than others.

3. What equity selection process do you follow?

Jan Meintjes:

At Denker Capital, we look for good businesses with good management teams that we can acquire at attractive prices. Generally good businesses earn superior returns on the capital that they employ, and good management teams make good capital allocation decisions.

The following factors give our equity selection process an edge:
• Our equity teams are integrated to enable us to leverage views from across the world in making decisions locally and globally.
• We have a highly experienced team – experienced not only with years in the market, but also with many years of working together as a team.
• We are able to give our clients exposure to small and medium size listed businesses, in South-Africa and across the globe.

4. Why is risk management such an important part of your approach? And, how do you manage risk in the portfolio?

Madalet Sessions:

Risk management is the one free lunch. Diversification works. If you could earn the same return with more certainty, who wouldn’t want to do that?

We know that macro events have important implications for asset values. What we don’t know is what events will come to pass. So, we spend no time trying to forecast the unknowable potential outcomes. Instead, we try to construct a portfolio that has exposures to a variety of potential future outcomes so that if unexpected things happen our investors are protected.

The true meaning of risk management is proactively managing for unexpected curveballs so that we can deliver returns more consistently. It is not being cautious, but rather about taking more calculated risks because we consider risk as an integral part of what we do.

5. Can you share an example of a situation where your risk management strategy proved crucial?

Jan Meintjes:

This is such a difficult question because risk management works even when things are going well.

We have managed the fund through some very trying times – the Covid-pandemic, a sharp rise in global inflation and interest rates as well as some local challenges around electricity availability. We have, throughout these times, maintained a very good balance of risky assets locally and abroad with less risky assets in SA and offshore. These offsetting positions ensured that we have never been over-exposed to only one macro event.

6. Reflecting on the fund’s journey, are there any specific lessons you’ve learned or key takeaways?

Madalet Sessions:

I did not realise how hard it would be to persuade people that one could deliver attractive risk adjusted returns with an asset allocation process that doesn’t forecast macroeconomic outcomes.

Jan Meintjes:

We have always believed that the long-term performance of good companies should be a more certain outcome than forecasting macro events in the short term. It is rewarding, for us and our investors, to have seen this play out over the few years.

7. What should investors expect from the fund going forward?

Jan Meintjes:

Investors should expect our approach to remain consistent. We plan to invest in good companies across the world while managing the impacts of macro events with our asset allocation process.



We also asked our equity portfolio managers to share their thoughts.

8. Claude, you work closely with Jan and Madalet. What stands out about their approach?

Claude van Cuyck, Head of SA Equity:

Madalet and Jan have a unique way of managing overall risk in the portfolio. Asset allocation is used as a tool to manage and offset the underlying risks taken by the equity building blocks. This ensures that you don’t ‘double down’ on overall portfolio risk – providing a smoother, more consistent return profile for clients.

9. How does the global equity team add value to this fund?

Jacobus Oosthuizen, Head of Global Equity:

International stocks have been a key contributor to the Denker SCI* Balanced Fund’s returns since inception.

Our equity process and philosophy, which is aligned across the greater investment team, enhances Jan and Madalet’s ability to assess relative valuations and the quality of businesses. This helps to inform their asset allocation decisions.

Global equity gives South African investors access to very attractive business models and industries not always available here. The pond is much larger and presents us with opportunities to find wonderful businesses (small, medium and large) we believe will contribute handsomely to returns over time.

10. What do you like most about the fund?

Kokkie Kooyman, Head of Global Financials:

What I like most is the equity selection approach (using the investment team’s best ideas to create alpha) and the clear, rational thinking that goes into asset allocation. This makes the fund ideal for investors who want consistency, without being totally risk averse and sacrificing upside.



Investment results in charts, as at 31 December 2023

Risk and return vs. peers, over 5 years:

Source: Morningstar, 31 December 2023. The A class has an annual management fee of 0.85% (incl. VAT). Returns are net of fees and annualised. From inception until 31 October 2023 the benchmark was a composite (60% FTSE JSE All Share Capped Index / 15% Stefi / 15% MSCI World / 10% US 10 Year Treasury). These returns assume the new benchmark since inception. 


Annualised performance since inception:

Source: Morningstar, 31 December 2023. Inception date: May 2017. The A class has an annual management fee of 0.85% (incl. VAT). Returns are net of fees and annualised. From inception until 31 October 2023 the benchmark was a composite (60% FTSE JSE All Share Capped Index / 15% Stefi / 15% MSCI World / 10% US 10 Year Treasury). These returns assume the new benchmark since inception.

*SCI stands for Sanlam Collective Investments.


The full registered name of the fund is Denker Sanlam Collective Investments Balanced Fund.

The information in this communication belongs to Denker Capital (Pty) Ltd (Denker Capital).  This information should only be evaluated for its intended purpose and may not be reproduced, distributed or published without our written consent.   While we have undertaken to provide information that is true and not misleading in any way, all information provided by Denker Capital is not guaranteed and is for illustrative purposes only.  The information does not take the circumstances of a particular person or entity into account and is not advice in relation to an investment or transaction. Because there are risks involved in buying or selling financial products, please do not rely on any information without appropriate advice from an independent financial adviser.  We will not be held responsible for any loss or damages suffered by any person or entity as a result of them relying on, or not acting on, any of the information provided. The information to follow does not constitute financial advice as contemplated in terms of the South African Financial Advisory and Intermediary Services Act of 2002 (FAIS Act). Use or rely on this information at your own risk. Independent professional financial advice should always be sought before making an investment decision as not all investments are suitable for all investors.   Sanlam Collective Investments (RF) (Pty) Ltd (SCI) is a registered and approved Manager in terms of the Collective Investment Schemes Control Act.             

The Manager of the fund is Sanlam Collective Investments, a registered and approved Manager in Collective Investment Schemes in Securities. The Manager retains full legal responsibility for third party named portfolio. The Sanlam Group is a full member of the Association for Savings and Investment SA. A schedule of fees and charges and maximum commissions is available from the Manager.  Standard Bank of South Africa Ltd is the appointed trustee of the Sanlam Collective Investments schemes.   International investments or investments in foreign securities could be accompanied by additional risks such as potential constraints on liquidity and repatriation of funds, macroeconomic risk, political risk, foreign exchange risk, tax risk, settlement risk as well as potential limitations on the availability of market information. The A class is the most expensive class of both the Denker Sanlam Collective Investments Balanced Fund with an annual management fee of 0.75% (excl. VAT), maximum initial fee of 3% and maximum annual advisor fee of 1%. 

Source of performance figures: Morningstar.  Returns are annualised and net of fees unless otherwise stated. Annualised returns are returns for a period that are scaled to one year. Collective investment schemes are generally medium- to long-term investments. Please note that past performances are not necessarily an accurate determination of future performances, and that the value of investments / units / unit trusts may go down as well as up.  Changes in exchange rates may have an adverse effect on the value, price or income of a product. Collective investments are traded at ruling prices and can engage in borrowing and scrip lending. Collective investments are calculated on a net asset value basis, which is the total market value of all assets in the portfolio including any income accruals and less any deductible expenses such as audit fees, brokerage and service fees. Actual investment performance of the portfolio and the investor will differ depending on the initial fees applicable, the actual investment date, and the date of reinvestment of income as well as dividend withholding tax. Forward pricing is used. Additional information of the proposed investment, including brochures, application forms and annual or quarterly reports, can be obtained from the Manager, free of charge. The Manager does not provide any guarantee either with respect to the capital or the return of a portfolio. The performance of the portfolio depends on the underlying assets and variable market factors. Performance is based on NAV to NAV calculations with income reinvestments done on the ex-div date. The Manager has the right to close any portfolios to new investors to manage them more efficiently in accordance with their mandates. Lump sum investment performances are quoted. The portfolio may invest in other unit trust portfolios which levy their own fees, and may result is a higher fee structure for our portfolio. All the portfolio options presented are approved collective investment schemes in terms of Collective Investment Schemes Control Act, No 45 of 2002 (CISCA). The portfolio management of all the portfolios is outsourced to financial services providers authorized in terms of the Financial Advisory and Intermediary Services Act, 2002. 


Source of award: Morningstar, 14 March 2024. The awards are determined by a combination of risk-adjusted medium- to long-term performance track records and Morningstar’s forward-looking rating for funds, the Morningstar Medalist Rating™ including its Parent pillar component. The Medalist Rating is set on a five-tier scale running from Gold, Silver, Bronze, Neutral and Negative at the share class level.  Please visit for more detail on the methodology. Morningstar Awards 2024 (c). Morningstar, Inc. All Rights Reserved. Awarded to Denker Sanlam Collective Investments Balanced Fund for Best Aggressive Allocation Fund, South Africa.





About the author

  • Madalet Sessions

    Madalet co-manages the Denker Sanlam Collective Investments Balanced and Stable funds with Jan Meintjes. She started her investment career at Investec Securities as a research assistant to top-rated investment strategist Brian Kantor. In 2008 she joined Element Investment Managers as an analyst responsible for fixed income, money market and property investments. From there she moved on to Nedgroup Investments in 2010, where she was responsible for managing the Nedgroup Private Wealth Bond and Property funds. She joined Denker Capital in 2016 to establish our range of multi asset class funds.

  • Jan Meintjes

    Jan manages our small cap opportunities fund, the S-Alt SC Qualified Hedge Fund +, and co-manages the Denker SCI Balanced and Stable funds with Madalet Sessions. Jan co-founded Gryphon Asset Management in 1998, after three years at Sanlam Asset Management as an equity analyst. In addition to co-managing the Coris Capital Money Market Fund and Absa Dividend Income Fund, Jan founded Gryphon Alternative Investments with the launch of the Gryphon Market Neutral Equity Fund in 2003. Given his experience and in-depth knowledge of the South African equity market, Jan has played an integral part in stock selection and asset allocation across the Denker Capital South African strategies since joining our business in 2011.