AL Mal UAE Equity Fund — Fund Information / Factsheet 2021

Apr 7, 2021

AZ Al Mal MENA Equity Fact Sheet March 2021

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NAV Per Unit: USD 5.67

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Fund Manager Commentary

US markets had a strong March with the S&P 500 up 2.4%, the DOW up 3.7% as the Federal Reserve remained dovish on interest rates and President Joe Biden signed the USD 1.9 tn coronavirus relief package. Europe’s STOXX 600 also had a strong month rallying 2.4% over the week, as stimulus and vaccination programs spurred hope. Both gold and brent crude closed out the month flat, but saw a lot of volatility through the month as yields and OPEC+ were the dictating themes. The MSCI EM Index had one of its biggest monthly declines in a year, down 4.0%, on signs that the U.S. economy would rebound quicker than other developed markets. The S&P Pan Arab market was the pick of the emerging markets, closing out the month up 3.17% on stable oil prices and demand recovery.

In the UAE, H.H. Sheikh Mohammed announced the Dubai 2040 Urban Master plan which aims to make Dubai the world’s best city to live in. The plan focuses on doubling areas dedicated to economic and recreational activities, while surging the population from 3.3 million to 5.8 million over the next 20 years, which should have a positive effect on economic and real estate activity.

Saudi Arabia’s government approved the Private Sector Participation Law, providing the legal infrastructure to help increase private participation in the provision of public services to citizens. Mouwasat, one of our top holdings and key private healthcare player, reported its FY20 earnings showing net income of SAR528mn, up 25% y/y thanks to new specialty departments and bed capacity. We continue to like the name on sustainably high RoE generation, growth via bed additions, and undemanding valuations.

The EGX 30 witnessed a strong sell off during March with the index down 8.5% over the period. The sell-off came as a result of margin calls for retail driven stocks, squeezing liquidity out of the broader EGX 70, especially in speculative names. The CBE kept interest rates on hold, as broad economic indicators point towards a gradual recovery, while surging food prices and rising global interest rates suggest little room for additional cuts in the near-term. MTI, one of our core holdings, reported a 20% y/y drop in their FY 20 earnings, in line with our expectations. We note a strong rebound in the business’ performance in Q4, whereby consumer electronics (69% of revenues) was up 20% y/y alone. We remain constructive on the business’s core segments, along with their ability to unlock value from their e- payment arms in the near-term.

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Sector Allocation
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37% - Financials
13% - Consumer Discretionary
10% - Health Care
9% - Materials
6% - Real Estate
5% - Industrials
4% - Consumer Staples
4% - Communication Services
4% - Cash
3% - Information Technology
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Objective

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

Fund Performance

			Fund Performance
	Performance1	Fund	Benchmark2	Alpha
	1 Month	2.5%	6.7%	-4.2%
	YTD3	9.2%	10.4%	-1.2%
	1 Year	45.7%	44.6%	1.1%
	3 Year	14.1%	17.0%	-2.9%
	5 Year	46.9%	37.1%	9.8%
	Since Inc.	14.0%	7.5%	6.5%

1 Performance is net of fees; return is cumulative

2 S&P Pan Arab Composite Index

3 As of 31ST March, 2021

	Holding	Top 5 Holdings	% of Fund
	Al Rajhi Bank		5.3
	Mouwasat Medical Services		5.0
	National Commercial Bank		4.7
	Saudi Basic Industries Corp		3.6
	Humansoft Holding		3.5
		Fund Analysis
	Matrix4	Fund	Benchmark
	Standard Deviation	13.4%	15.2%
	Sharpe Ratio	0.21	0.0
	Beta	0.8
	Tracking Error	5.4%
	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

Fund Information

Investment Manager	Azimut (DIFC) Limited
Investment Advisers	Al Mal Capital PJSC
Fund Manager	Sherif El Haddad
Inception Date	June 26, 2019
Fund Size	USD 62 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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Geographic Allocation
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50% - Saudi Arabia
15% - Egypt
12% - Qatar
8% - United Arab Emirates
7% - Kuwait
5% - Others
4% - Cash
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Al Mal MENA Equity Fund
20 S&P Pan Arab Composite Index (Rebased)
AZ Al Mal Equity Fund
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.

March 2021

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Al Mal MENA Equity Fact Sheet

NAV Per Unit: USD 9.67

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Fund Manager Commentary

US markets had a strong March with the S&P 500 up 2.4%, the DOW up 3.7% as the Federal Reserve remained dovish on interest rates and President Joe Biden signed the USD 1.9 tn coronavirus relief package. Europe’s STOXX 600 also had a strong month rallying 2.4% over the week, as stimulus and vaccination programs spurred hope. Both gold and brent crude closed out the month flat, but saw a lot of volatility through the month as yields and OPEC+ were the dictating themes. The MSCI EM Index had one of its biggest monthly declines in a year, down 4.0%, on signs that the U.S. economy would rebound quicker than other developed markets. The S&P Pan Arab market was the pick of the emerging markets, closing out the month up 3.17% on stable oil prices and demand recovery.

In the UAE, H.H. Sheikh Mohammed announced the Dubai 2040 Urban Master plan which aims to make Dubai the world’s best city to live in. The plan focuses on doubling areas dedicated to economic and recreational activities, while surging the population from 3.3 million to 5.8 million over the next 20 years, which should have a positive effect on economic and real estate activity.

Saudi Arabia’s government approved the Private Sector Participation Law, providing the legal infrastructure to help increase private participation in the provision of public services to citizens. Mouwasat, one of our top holdings and key private healthcare player, reported its FY20 earnings showing net income of SAR528mn, up 25% y/y thanks to new specialty departments and bed capacity. We continue to like the name on sustainably high RoE generation, growth via bed additions, and undemanding valuations.

The EGX 30 witnessed a strong sell off during March with the index down 8.5% over the period. The sell-off came as a result of margin calls for retail driven stocks, squeezing liquidity out of the broader EGX 70, especially in speculative names. The CBE kept interest rates on hold, as broad economic indicators point towards a gradual recovery, while surging food prices and rising global interest rates suggest little room for additional cuts in the near-term. MTI, one of our core holdings, reported a 20% y/y drop in their FY 20 earnings, in line with our expectations. We note a strong rebound in the business’ performance in Q4, whereby consumer electronics (69% of revenues) was up 20% y/y alone. We remain constructive on the business’s core segments, along with their ability to unlock value from their e- payment arms in the near-term.

Sector Allocation

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36% - Financials
16% - Consumer Discretionary
10% - Health Care
9% - Materials
6% - Consumer Staples
6% - Real Estate
4% - Communication Services
3% - Industrials
3% - Information Technology
3% - Energy
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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	1.8%	6.7%	-4.9%
	YTD3	8.0%	10.4%	-2.4%
	1 Year	43.7%	44.6%	-0.8%
	3 Year	12.2%	17.0%	-4.8%
	5 Year	44.4%	37.1%	7.4%
	Since Inc.	12.5%	-28.3%	40.8%

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

2 S&P Pan Arab Composite Index

3 As of 31ST March, 2021

	1Performance is net of fees; 3-year and 5-year retu 2S&P Pan Arab Composite Index 3As of 31STMarch, 2021	rn is cumulative
	Holding	Top 5 Holdings	% of Fund
	Al Rajhi Bank		5.5
	Mouwasat Medical Services		5.3
	Saudi Basic Industries Corp		3.7
	Humansoft Holding		3.7
	National Commercial Bank		3.7
		Fund Analysis
	Matrix4	Fund	Benchmark
	Standard Deviation	13.5%	15.2%
	Sharpe Ratio	0.2	0.3
	Beta	0.8
	Tracking Error	5.3%
	Dividend Yield 2020	4.0%
	No. of Holdings	53

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

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 28 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

10Y Fund Strategy Performance

Geographic Allocation

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50% - Saudi Arabia
15% - Egypt
11% - Qatar
10% - UAE
8% - Kuwait
5% - Others
2% - Cash
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20 Al Mal MENA Equity Fund Benchmark
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.

March 2021

NAV Per Unit: AED 1.37

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Al Mal UAE Equity Fact Sheet

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Fund Manager Commentary

As a whole, UAE had a strong March, led by Abu Dhabi with the ADSMI up 5.0% and followed by Dubai’s DFMGI up 1.7%. Abu Dhabi’s performance was largely driven by index heavyweight Etisalat. During the month, Etisalat’s Annual General Meeting (AGM) approved a record total dividend per share for the year 2020 of AED 1.20 and approved 49% ownership of non-UAE nationals of the company.

At a macro level, The UAE Central Bank projects real GDP to recover to positive growth of 2.5% in 2021, with non-oil GDP growing by 3.6% while oil GDP remaining flat, based on the OPEC+ production schedule and announcements. Earlier this month, H.H. Sheikh Mohammed announced the Dubai 2040 Urban Master plan with aims to make Dubai the world’s best city to live in. The plan focuses on doubling areas dedicated to economic and recreational activities. The plan sets out that the Emirate’s population will surge from 3.3 million to 5.8 million in the next 20 years, which should have a positive effect on economic and real estate activity.

In Dubai, Dubai Entertainments, a portfolio holding, officially approved the transfer of $1.13 bn debt to Meraas Leisure and Entertainment. A filing made to the Dubai Financial Market will see DXB Entertainments convert its debt with Emirates NBD into ordinary shares, which have been valued at AED 1 each in the share capital of the company at a conversion rate of AED 0.08 per share.

In Abu Dhabi, portfolio holding Aldar Properties announced a AED500mn redevelopment plan for Yas Mall to reinforce the asset’s position as the centerpiece of Yas Island. The redevelopment will repurpose 40% of its gross leasable area to high impact experiential retail, F&B, and co-working office spaces. Lastly, Aldar announced that it is set to distribute cash dividends worth AED1.14bn, which is equivalent to 14.5% of the company’s capital for the financial year 2020. Portfolio heavyweight, Tabreed, said it has obtained shareholder approval to issue non-convertible bonds worth up to USD 1bn over the next 12 months, either through non-convertible bonds or Islamic sukuk issues. These proceeds will be used to fund acquisition and/or for general corporate purposes.

Objective

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

Fund Performance

			Fund Performance
	Performance1	Fund	Benchmark2	Alpha
	1 Month YTD3 1 Year	3.4% 11.3% 45.2%	2.8% 10.5% 42.9%	0.6% 0.8% 2.3%
	3 Year	13.8%	-4.2%	18.1%
	5 Year	36.2%	-3.8%	40.1%
	Since Inc.	66.4%	-42.4%	108.7%

1 Performance is net of fees; return is cumulative

2 S&P UAE Composite Index

3 As of 31ST March, 2021

	1Performance is net of fees; return is cumul 2S&P UAE Composite Index 3As of 31STMarch, 2021	ative
	Holding First Abu Dhabi Bank	Top 3 Holdings	% of Fund 20.4
	Tabreed		13.9
	Emirates NBD		11.7

Fund Analysis

		Fund Analysis
	Matrix4	Fund	Benchmark
	Standard Deviation Sharpe Ratio Beta	17.5% 0.1 0.7	23.4% -0.2
	Dividend Yield 2020	4.5%
	No. of Holdings	15

4 Calculated using 3-year weekly data

Fund Information

Disclaimer

	Fund Manager	Sherif El Haddad
	Fund Size	AED 50 million
	Domicile	UAE
	Currency	AED
	Subscription & Redemption	Weekly
	Min Subscription	AED 100,000
	Management Fee	1.50%
	Performance Fee	20% over 10% hurdle with high 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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Sector Allocation
38% - Financials
15% - Real Estate
14% - Consumer Discretionary
7% - Consumer Staples
18% - Industrials
7% - Communication Services
0% - Cash
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10Y Fund Strategy Performance
Al Mal UAE Equity Fund Benchmark
24
22
20
60% - Dubai
18
36% - Abu Dhabi 16
14
2% - Kuwait
12
2% - KSA 10
8
0% - 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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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.