AL Mal UAE Equity Fund — Fund Information / Factsheet 2021

Jun 6, 2021

AZ Al Mal MENA Equity Fact Sheet May 2021

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NAV Per Unit: USD 6.00

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Fund Manager Commentary

US equities had a weak month with the S&P 500 rising 0.2% and the NASDAQ down 1.14%, lacking directional conviction as macro data remain mixed. Brent had a strong month, now inching towards the elusive USD 70 per barrel mark, as the rebound in global demand outweighs concerns of more supply from Iran once sanctions are lifted.

In the UAE, all eyes were on FAB on higher FOL implementation pushing Abu Dhabi (ADSM Index) higher by 8.47%. In Dubai, real estate transactions, maintained their upward trajectory during April with units sold up 5x y/y , while prices on villa continued to show their strength boding well for names like Emaar.

KSA reduced its budget deficit to USD1.97 bn in Q1 21, the finance ministry said last month, helped by austerity measures introduced in 2020 while business activity and employment have improved markedly. Also, Crown Prince Muhammad Bin Salman issued new directives that aim to build 53k new residential units. This adds to KSA’s compelling home demand growth story, which has filtered positively into the financials and consumer discretionary names, sectors we retain key holdings in. Core holding, Mouwasat, reported a 36% y/y growth in net income and we remain bullish on the name due to its best-in-class profitability profile, growth prospects, and strong pricing power.

It was an eventful month for Egypt, with the MPC keeping interest rates on hold for the third consecutive meeting, in line with the global interest rate environment despite subdued inflations levels (4.5% in March). The CBE also issued new regulations that bode well for e-payment companies, and we continue to play the theme via MTI. The finance minister also shared the country’s upcoming draft budget, targeting a 1.5% of GDP primary surplus and 6.6% GDP fiscal deficit.

Objective

Achieve capital appreciation, primarily through investment in equity and equity related securities in the Middle East and North African markets.

			Fund Performance
	Performance1	Fund	Benchmark2	Alpha
	1 Month	1.4%	0.3%	1.1%
	YTD3	14.9%	16.6%	-1.7%
	1 Year	40.3%	42.1%	-1.8%
	3 Year	20.5%	22.7%	-2.2%
	5 Year	56.3%	42.5%	13.9%
	Since Inc.	19.9%	13.5%	6.4%

1 Performance is net of fees; 3-year and 5-year return is cumulative

• 2 S&P Pan Arab Composite Index

3 As of 26th May, 2021

	Holding	Top 5 Holdings	% of Fund
	Saudi National Bank		6.5
	Mouwasat Medical Services Co		5.7
	Al Rajhi Bank		5.0
	United Electronics Co		3.6
	Saudi Basic Industries Corp		3.5
		Fund Analysis
	Matrix4	Fund	Benchmark
	Standard Deviation	13.3%	15.2%
	Sharpe Ratio	0.49	0.02
	Beta	0.8
	Tracking Error	5.2%
	No. of Holdings	51

4 The fund characteristics are based on the historical data of the Al Mal MENA Equity Fund as the AZ Al Mal Equity Fund continues to follow the same strategy; calculated using 3-year weekly data

Fund Information

Sector Allocation

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34% - Financials
15% - Consumer Discretionary
11% - Materials
9% - Health Care
7% - Real Estate
7% - Industrials
5% - Consumer Staples
4% - Communication Services
3% - Cash
2% - Energy
2% - Information Technology
1% - Utilities
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Investment Manager	Azimut (DIFC) Limited
Investment Advisers	Al Mal Capital PJSC
Fund Manager	Sherif El Haddad
Inception Date	June 26, 2019
Fund Size	USD 75 million
Strategy Size	USD 250 million
Domicile	Luxembourg
Currency	USD
Subscription & Redemption	Weekly
Min Subscription	USD 1 (Retail) -250,000 (Institutional)
Bloomberg Code	AZ3AZUA LX
Management Fee	Up to 2.0%
Benchmark Index	S&P Pan Arab Composite
Fund Type	Open Ended
Administrator & Custodian	BNP Paribas

10Y Fund Strategy Performance

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20
Al Mal MENA Equity Fund
18
S&P Pan Arab Composite Index (Rebased)
16 AZ Al Mal Equity Fund
51% - Saudi Arabia
12% - UAE 14
12% - Egypt
12
9% - Qatar
7% - Kuwait 10
6% - Others
8
3% - Cash
6
Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 Dec-19 Dec-20
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Geographic Allocation

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Disclaimer

None ofthe information andopinions containedherein is intendedto form the basis for any investment or trading decision, andno specific recommendations are intended. The products andtransactions describedherein are not suitable for every investor. Such products and transactions are only suitable for sophisticated and knowledgeableprofessionalusers of financialinstruments, and are structured and customized to the needs and objectives of each investor. The information and opinions contained herein have beenprepared for informational purposes only and do not constitute an offer to sell, or solicitation of an offer to purchase, any security, any commodity futures contractor commodity-related product, any derivative product, or any trading strategy or service described herein.

Neither AlMalCapitalPSC nor any of its affiliates, directors, authorized managers and/or employees accepts liability for any loss arising from the use of or makes any representation as to the accuracy or completeness of the terms and conditions of products and transactions described herein. Finalized terms and conditions are subject to further discussion and negotiation, and will be determined in part on the basis of pricing and valuation models, data, and assumptions that are proprietary to Al Mal Capital and its affiliates. No assurance can be given that a product or transaction can, in fact, be executed on any representative terms indicated herein.

May 2021 NAV Per Unit: USD 10.20

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Al Mal MENA Equity Fact Sheet

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Fund Manager Commentary

US equities had a weak month with the S&P 500 rising 0.2% and the NASDAQ down 1.14%, lacking directional conviction as macro data remain mixed. Brent had a strong month, now inching towards the elusive USD 70 per barrel mark, as the rebound in global demand outweighs concerns of more supply from Iran once sanctions are lifted.

In the UAE, all eyes were on FAB on higher FOL implementation pushing Abu Dhabi (ADSM Index) higher by 8.47%. In Dubai, real estate transactions, maintained their upward trajectory during April with units sold up 5x y/y , while prices on villa continued to show their strength boding well for names like Emaar.

KSA reduced its budget deficit to USD1.97 bn in Q1 21, the finance ministry said last month, helped by austerity measures introduced in 2020 while business activity and employment have improved markedly. Also, Crown Prince Muhammad Bin Salman issued new directives that aim to build 53k new residential units. This adds to KSA’s compelling home demand growth story, which has filtered positively into the financials and consumer discretionary names, sectors we retain key holdings in. Core holding, Mouwasat, reported a 36% y/y growth in net income and we remain bullish on the name due to its best-in-class profitability profile, growth prospects, and strong pricing power.

It was an eventful month for Egypt, with the MPC keeping interest rates on hold for the third consecutive meeting, in line with the global interest rate environment despite subdued inflations levels (4.5% in March). The CBE also issued new regulations that bode well for e-payment companies, and we continue to play the theme via MTI. The finance minister also shared the country’s upcoming draft budget, targeting a 1.5% of GDP primary surplus and 6.6% GDP fiscal deficit.

Objective

Achieve capital appreciation, primarily through investment in equity and equity related securities in the Middle East and North African markets.

			Fund Performance
	Performance1	Fund	Benchmark2	Alpha
	1 Month	1.4%	0.3%	1.1%
	YTD3	14.0%	16.6%	-2.6%
	1 Year	38.6%	42.1%	-3.5%
	3 Year	18.9%	22.7%	-3.8%
	5 Year	54.2%	42.5%	11.7%
	Since Inc.	18.7%	-24.3%	43.0%

1 Performance is net of fees; 3-year and 5-year return is cumulative

2 S&P Pan Arab Composite Index

3 As of 26th May, 2021

Top 5 Holdings

	,	Top 5 Holdings
	Holding		% of Fund
	Saudi National Bank		6.5
	Mouwasat Medical Services Co		5.7
	Al Rajhi Bank		5.0
	United Electronics Co		3.6
	Saudi Basic Industries Corp		3.5
		Fund Analysis
	Matrix4	Fund	Benchmark
	Standard Deviation	13.4%	15.2%
	Sharpe Ratio	0.4	0.4
	Beta	0.8
	Tracking Error	5.2%
	Dividend Yield 2020	4.0%
	No. of Holdings	52

4 The fund characteristics are based on the historical data of the Al Mal MENA Equity Fund as the AZ Al Mal Equity Fund continues to follow the same strategy; calculated using 3-year weekly data

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Sector Allocation
34% - Financials
15% - Consumer Discretionary
11% - Materials
9% - Health Care
7% - Real Estate
7% - Industrials
5% - Consumer Staples
4% - Communication Services
3% - Cash
2% - Energy
2% - Information Technology
1% - Utilities
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4The fund characteristics are based on the histo follow the same strategy; calculated using 3-year	rical data of the Al Mal MENA Equity Fund as the AZ Al Mal Equity Fund continues to weekly data
	Fund Information
Fund Manager Fund Manager	Sherif El Haddad Sherif El Haddad
Inception Date Inception Date	15th June 2008 15th June 2008
Fund Size Fund Size	USD 28 million USD 30 million
Strategy Size Strategy Size	USD 250 million USD 250 million
Domicile Domicile	Bahrain Bahrain
Currency Currency	USD USD
Subscription & Redemption Subscription & Redemption	Weekly Weekly
Min Subscription Min Subscription	USD 250,000 USD 250,000
Bloomberg Code Bloomberg Code	MALMENE BI MALMENE BI
Management Fee Management Fee	1.75% 1.75%
Benchmark Index Benchmark Index	S&P Pan Arab Composite S&P Pan Arab Composite
Fund Type Fund Type	Open Ended Open Ended
Administrator Administrator	Apex Apex
Custodian Custodian	Standard Chartered Standard Chartered

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10Y Fund Strategy Performance
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20
Geographic Allocation
18 Al Mal MENA Equity Fund Benchmark
16
51% - Saudi Arabia
14
12% - UAE
12% - Egypt 12
9% - Qatar
10
7% - Kuwait
6% - Others 8
3% - Cash 6
Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 Dec-19 Dec-20
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Disclaimer

None ofthe information andopinions containedherein is intendedto form the basis for any investment or trading decision, andno specific recommendations are intended. The products andtransactions describedherein are not suitable for every investor. Such products and transactions are only suitable for sophisticated and knowledgeableprofessionalusers of financialinstruments, and are structured and customized to the needs and objectives of each investor. The information and opinions contained herein have beenprepared for informational purposes only and do not constitute an offer to sell, or solicitation of an offer to purchase, any security, any commodity futures contractor commodity-related product, any derivative product, or any trading strategy or service described herein. Neither AlMalCapitalPSC nor any of its affiliates, directors, authorized managers and/or employees accepts liability for any loss arising from the use of or makes any representation as to the accuracy or completeness of the terms and conditions of products and transactions described herein. Finalized terms and conditions are subject to further discussion and negotiation, and will be determined in part on the basis of pricing and valuation models, data, and assumptions that are proprietary to Al Mal Capital and its affiliates. No assurance can be given that a product or transaction can, in fact, be executed on any representative terms indicated herein.

Al Mal UAE Equity Fact Sheet May 2021 NAV Per Unit: AED 1.49

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Fund Manager Commentary

Both Abu Dhabi (ADSM Index) and Dubai (DFMG Index) markets had a strong month of May, propelling the markets higher by 8.47% and 7.37% respectively, and were largely lifted by banks’ shares, especially FAB post FOL hike.

On the macro front, the UAE announced foreigners opening a company in the UAE will no longer need an Emirati Shareholder or agent under changes to UAE company law effective as of the 1[st] of June. This is largely in line with earlier moves lifting foreign ownership limits to boost the country’s competitive edge and facilitate business activity. UAE PMI edged up to 52.7 in April from 52.6 in March. This was its highest level since July 2019 and the fifth consecutive month it has held above the 50 handle. Going forward, The UAE government has announced its aim to double the economy by 2030, implying a nominal growth rate of c7% per annum. According to the Economic Minister, Abdullah Bin Touq, the Ministry of Economy and other government agencies are working on an ambitious vision to double the UAE economy to AED 3 trillion by 2031.

Portfolio holding Agthia announced Q1 21 revenues of AED 665m growing 17% y/y, whilst headline earnings surged 84% to AED 49.6m on consolidation of Al Foah and Al Faysal. Consolidation helped drive an 84bps expansion in gross margins to 30.7%, also aided by improvements in the core business. M&A transactions Ismilia (Atayab) and Nabil foods (completed) remain yet to be consolidated, but these results are representative of management’s strong focus to expand into value-added categories to help bolster its water, flour and feed categories, thereby expanding EBITDA margins by 100bps per annum until 2025.

Portfolio holding Emaar Properties reported strong 1Q21 headline operating and financial figures. The company recorded contracted sales of AED7,115m (+83.0% y/y, +128.3% q/q), including AED5,904m from Dubai (+106.7% y/y; +200.5% q/q) in 1Q21. With strong quarterly result across all its operating segments, we continue to view Emaar as a proxy play on a recovery in tourism and spending.

Objective

Achieve medium to long-term capital growth by investing primarily in equities listed on the UAE Exchange.

			Fund Performance
	Performance1	Fund	Benchmark2	Alpha
	1 Month YTD3 1 Year 3 Year	6.5% 20.8% 52.0% 24.5%	8.5% 20.3% 49.2% 7.3%	-2.0% 0.5% 2.8% 17.2%
	5 Year	48.0%	7.7%	40.3%
	Since Inc.	80.6%	-37.2%	117.9%

1 Performance is net of fees; 3-year and 5-year return is cumulative

2 S&P UAE Composite Index

3 As of 26th May, 2021

	Holding	Top 3 Holdings	% of Fund
	First Abu Dhabi Bank Tabreed		22.4 12.0
	Emirates NBD		11.6
		Fund Analysis
	Matrix4	Fund	Benchmark
	Standard Deviation Sharpe Ratio Beta	17.3% 0.26 0.66	23.4% -0.01
	Dividend Yield 2020	4.5%
	No. of Holdings	17

4 Calculated using 3-year weekly data

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Sector Allocation
40% - Financials
19% - Real Estate
15% - Industrials
8% - Consumer Staples
8% - Communication Services
5% - Consumer Discretionary
3% - Health Care
2% - Cash
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		Fund Information
	Fund Manager	Sherif El Haddad
	Fund Size	AED 55 million
	Domicile	UAE
	Currency	AED
	Subscription & Redemption	Weekly
	Min Subscription	AED 100,000
	Management Fee	1.50%
		20% over 10% hurdle with high
	Performance Fee	watermark
	Financial Year End	31st December
	Benchmark Index	S&P UAE Composite Index
	Fund Type	Open Ended
	Administrator & Custodian	Standard Chartered

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Geographic Allocation
46% - Dubai
44% - Abu Dhabi
5% - KSA
3% - Kuwait
2% - Cash
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10Y Fund Strategy Performance
Al Mal UAE Equity Fund Benchmark
24
22
20
18
16
14
12
10
8
6
Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 Dec-19 Dec-20
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Disclaimer

None ofthe information andopinions containedherein is intendedto form the basis for any investment or trading decision, andno specific recommendations are intended. The products andtransactions describedherein are not suitable for every investor. Such products and

transactions are only suitable for sophisticated and knowledgeableprofessionalusers of financialinstruments, and are structured and customized to the needs and objectives of each investor. The information and opinions contained herein have beenprepared for informational purposes only and do not constitute an offer to sell, or solicitation of an offer to purchase, any security, any commodity futures contractor commodity-related product, any derivative product, or any trading strategy or service described herein.

Neither AlMalCapitalPSC nor any of its affiliates, directors, authorized managers and/or employees accepts liability for any loss arising from the use of or makes any representation as to the accuracy or completeness of the terms and conditions of products and transactions described herein. Finalized terms and conditions are subject to further discussion and negotiation, and will be determined in part on the basis of pricing and valuation models, data, and assumptions that are proprietary to Al Mal Capital and its affiliates. No assurance can be given that a product or transaction can, in fact, be executed on any representative terms indicated herein.