AL Mal UAE Equity Fund — Fund Information / Factsheet 2021

Jul 8, 2021

AZ Al Mal MENA Equity Fact Sheet June 2021

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NAV Per Unit: USD 6.13

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Fund Manager Commentary

June was a crucial month for the longer term direction of equities as the federal reserve held rates at near-zero, but there was a clear shift to a more hawkish stance as Fed officials penciled in earlier than expected hikes in 2023. A shift congruent with our view on the issue. Brent crude roared through the month posting a 9.33% gain, hitting multi year highs on an improved outlook for worldwide demand as rising COVID-19 vaccination rates help spur an economic recovery. The International Energy Agency indicated that OPEC+ could need to let the taps run with demand expected to hit pre-pandemic levels by 2022. We remain constructive on Brent, but keep a watchful eye on potential fresh supply flooding the market and the potential supply cuts rollback negotiation at the end of the month.

The Saudi Cabinet approved the license of two digital banks with a combined paid up capital of SAR 4bn, one of which was granted to portfolio holding STC for its subsidiary STC pay (with a capital base of SAR 2.5bn). The app currently has 2.72.8m active customers, with more than 50k POS and 1m cards (in partnership with VISA), with ample room for growth and adoption as further financial inclusion is achieved.

In the UAE, the primary property market continues to look red hot with Aldar’s Noya Viya, selling out in 48 hours. Though we’ve seen the bulk of the activity happening in Dubai, we continue to like Abu Dhabi’s property market dynamics underpinned by its buyer profile and more contained supply pipeline. There is also a very clear structural shift in consumer preferences towards more open space villa type properties, evident in pricing outperformance vis-à-vis apartments.

In Egypt, e-payment platforms Bee and Masry have announced intentions to make their EGX debut in Q4 2021. We look forward to the IPO and its implications on parent company and core portfolio holding MTI, as current market-implied valuations of the pair e-payment platforms remain muted, in our view. MTI also reported a compelling 20% y/y increase in Q1 EPS, driven by sustained growth in home appliance and automobile sales, and 30bps expansion in net margins as the non-banking financials arm turned positive. We look forward to strong P&L metrics in 2021, underpinned by new launches within the consumer electronics segment, pent-up demand for cars, and vast growth emanating from the e-payment’s partnership with Vodafone Egypt.

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Sector Allocation
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36% - Financials
15% - Consumer Discretionary
11% - Materials
9% - Health Care
7% - Real Estate
6% - Industrials
5% - Consumer Staples
4% - Communication Services
2% - Energy
2% - Cash
2% - Information Technology
1% - Utilities
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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	2.2%	2.4%	-0.2%
	YTD3 1 Year 3 Year	18.2% 33.7% 24.6%	20.2% 38.1% 23.7%	-2.0% -4.4% 0.9%
	5 Year	62.1%	47.0%	15.1%
	Since Inc.	22.6%	16.2%	6.4%

1 Performance is net of fees; return is cumulative

• 2 S&P Pan Arab Composite Index

3 As of 30th June 2021

	1Performance is net of fees; return is cumulative 2S&P Pan Arab Composite Index 3As of 30thJune 2021 5 Year 62.1% Since Inc. 22.6%	47.0% 16.2%	15.1% 6.4%
	Holding	Top 5 Holdings	% of Fund
	Saudi National Bank		7.0
	Mouwasat Medical Services Al Rajhi Bank		6.3 5.5
	United Electronics		5.0
	Saudi Basic Industries		3.5
		Fund Analysis
	Matrix4	Fund	Benchmark
	Standard Deviation	13.2%	15.1%
	Tracking Error Beta No. of Holdings	1.9% 0.8 47	0.0

• 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 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

Geographic Allocation

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52% - Saudi Arabia
13% - Egypt
11% - United Arab Emirates
10% - Qatar
7% - Kuwait
5% - Others
2% - Cash
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20 10Y Fund Strategy Performance
Al Mal MENA Equity Fund
18 S&P Pan Arab Composite Index (Rebased)
AZ Al Mal Equity Fund
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.

June 2021

NAV Per Unit: USD 10.44

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Al Mal MENA Equity Fact Sheet

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Fund Manager Commentary

June was a crucial month for the longer term direction of equities as the federal reserve held rates at near-zero, but there was a clear shift to a more hawkish stance as Fed officials penciled in earlier than expected hikes in 2023. A shift congruent with our view on the issue. Brent crude roared through the month posting a 9.33% gain, hitting multi year highs on an improved outlook for worldwide demand as rising COVID-19 vaccination rates help spur an economic recovery. The International Energy Agency indicated that OPEC+ could need to let the taps run with demand expected to hit pre-pandemic levels by 2022. We remain constructive on Brent, but keep a watchful eye on potential fresh supply flooding the market and the potential supply cuts rollback negotiation at the end of the month.

The Saudi Cabinet approved the license of two digital banks with a combined paid up capital of SAR 4bn, one of which was granted to portfolio holding STC for its subsidiary STC pay (with a capital base of SAR 2.5bn). The app currently has 2.72.8m active customers, with more than 50k POS and 1m cards (in partnership with VISA), with ample room for growth and adoption as further financial inclusion is achieved.

In the UAE, the primary property market continues to look red hot with Aldar’s Noya Viya, selling out in 48 hours. Though we’ve seen the bulk of the activity happening in Dubai, we continue to like Abu Dhabi’s property market dynamics underpinned by its buyer profile and more contained supply pipeline. There is also a very clear structural shift in consumer preferences towards more open space villa type properties, evident in pricing outperformance vis-à-vis apartments.

In Egypt, e-payment platforms Bee and Masry have announced intentions to make their EGX debut in Q4 2021. We look forward to the IPO and its implications on parent company and core portfolio holding MTI, as current market-implied valuations of the pair e-payment platforms remain muted, in our view. MTI also reported a compelling 20% y/y increase in Q1 EPS, driven by sustained growth in home appliance and automobile sales, and 30bps expansion in net margins as the non-banking financials arm turned positive. We look forward to strong P&L metrics in 2021, underpinned by new launches within the consumer electronics segment, pent-up demand for cars, and vast growth emanating from the e-payment’s partnership with Vodafone Egypt.

Sector Allocation

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35% - Financials
14% - Consumer Discretionary
10% - Materials
9% - Health Care
7% - Real Estate
6% - Industrials
5% - Consumer Staples
4% - Communication Services
4% - Cash
2% - Energy
2% - Utilities
2% - 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
	Performance1	Fund	Benchmark2	Alpha
	1 Month	2.3%	2.4%	-0.1%
	YTD3	17.4%	20.2%	-2.8%
	1 Year	33.0%	38.1%	-5.1%
	3 Year	23.1%	23.7%	-0.7%
	5 Year	60.1%	47.0%	13.1%
	Since Inc.	21.5%	-22.5%	44.0%

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

2 S&P Pan Arab Composite Index

3 As of 30th June, 2021

	Holding	Top 5 Holdings	% of Fund
	Saudi National Bank		6.9
	Mouwasat Medical Services Co		6.2
	Al Rajhi Bank		5.3
	United Electronics Co		5.0
	Humansoft Holding		3.4
		Fund Analysis
	Matrix4	Fund	Benchmark
	Standard Deviation	13.3%	15.0%
	Tracking Error	1.7%	0.4
	Beta	0.8
	Dividend Yield 2020	4.0%
	No. of Holdings	47

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 31 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

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20
18 Al Mal MENA Equity Fund Benchmark
16
50% - Saudi Arabia
13% - Egypt 14
11% - UAE
12
9% - Qatar
7% - Kuwait 10
4% - Morocco
8
4% - Cash
2% - Oman 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.

Al Mal UAE Equity Fact Sheet June 2021

NAV Per Unit: AED 1.44

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Fund Manager Commentary

The India-UAE travel corridor remains suspended as of time of writing, which is the third and eighth business international routes in the world, impacting Q2 inflows. Nevertheless, the UAE is officially the most vaccinated nation, a positive read-through for a rebound in mobility ahead of Expo 2020. We think the UAE has maintained a constructive balance set between economic activity and the spread of the virus, while inoculation remains at pace.

Dubai continues to actively revamp its regulatory environment, targeting a 30% reduction of government-related procedures for business set-up. In addition, Dubai is looking to grow business activity by increasing the private sector’s participation in public projects. Even though the UAE is a more mature market in the digital banking space, new entrants still see opportunity as Dubai-based digital bank Bank Zand plans to be the first fully independent challenger bank in the UAE. After FAB’s spinoff of its own internal equivalent magnate, it will be interesting to see how this space evolves in terms of penetration and profitability. We think the sharp rise in the value of the e- commerce market in 2020 to USD 3.9bn with further growth penciled in going forward, gives challenger banks tremendous potential given the discernible shift in consumer preferences. Additionally, with UAE ranking as the 15[th] biggest recipient of FDI last year and the steep drop in cost of living, we think there is further recovery potential via improved macro positioning.

Over the month, we also saw Nakheel sell district cooling assets to Emirates Central Cooling, a JV between Dubai Holdings and a state owned utility player. We see strong growth prospects in the district cooling business, owing to the relatively nascent but increasingly important role it plays in the development of the region, with opportunities for adoption in Saudi, India and Egypt.

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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	-3.3%	-0.2%	-3.1%
	YTD3 1 Year 3 Year	18.4% 44.1% 22.0%	21.5% 42.2% 7.3%	-3.1% 1.9% 14.7%
	5 Year	43.8%	5.7%	38.1%
	Since Inc.	74.7%	-37.3%	112.0%

1 Performance is net of fees; return is cumulative

2 S&P UAE Composite Index

3 As of 30th June 2021

Top 3 Holdings

		Top 3 Holdings
	Holding Emaar Properties First Abu Dhabi Bank		% of Fund 9.9 9.8
	Emirates NBD		9.5
		Fund Analysis
	Matrix4	Fund	Benchmark
	Standard Deviation	17.2%	23.1%
	Tracking Error	3.3%	0.03
	Beta	0.66
	Dividend Yield 2020	4.5%
	No. of Holdings	19

4 Calculated using 3-year weekly data

Fund Information

Sector Allocation

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40% - Financials
16% - Real Estate
10% - Communication Services
10% - Industrials
8% - Consumer Discretionary
6% - Consumer Staples
4% - Health Care
3% - Utilities
2% - Cash
1% - Information Technology
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Geographic Allocation
42% - Abu Dhabi
41% - Dubai
8% - KSA
4% - Kuwait
3% - Qatar
2% - Cash
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	Fund Manager	Sherif El Haddad
	Fund Size	AED 54 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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10Y Fund Strategy Performance
Al Mal UAE Equity Fund Benchmark
24
22
20
18
16
14
12
10
8
6
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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.