AL Mal UAE Equity Fund — Fund Information / Factsheet 2021

Aug 3, 2021

AZ Al Mal MENA Equity Fact Sheet July 2021

NAV Per Unit: USD 6.11

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Fund Manager Commentary

US indices ebbed and flowed through the month due to themes like falling treasury yields, potentially higher than expected inflation and the delta variant. The lack of direction in the markets were evident, as the S&P 500 and the NASDAQ closed out the week flat. Brent had a volatile month as well, as the UAE initially held out on an agreement to revise supply cuts as it remained committed to an upward revision of its baseline from 3.2mb/d to 3.9mb/d. However, UAE and KSA came to an agreement in the latter half of the month. The deal reportedly increases the UAE’s baseline from 3.17 mb/d to 3.65 mb/d starting May 2022. We continue to see strength in oil prices, as projected increased supply from the cartel seem to still be playing catch up with global demand.

KSA reinforced its target for the transportation sector to contribute 10% of GDP by 2030, up from 6% currently. They announced a spending plan of USD 133bn which will be concentrated in launching a new national airline, tripling passengers, expanding airports, increasing port’s capacity and connecting major cities. We see tremendous potential in this sector, with valuations slightly depressed on a relative basis due to the overhang from the pandemic. Portfolio holding, eXtra, reported 2Q21 earnings with headline earnings up 11% y/y to amount to SAR 100.5mn. There was a 14% y/y decline in topline as a result of the high base from last year which was a result of pre-VAT buying, but, the continued pick up in Tas’heel, Extra’s consumer finance arm, continues to impress and offset any near-term weakness in the electronics business (off a high base) contributing SAR 25.4mn vs SAR 4.3mn in 2Q20.

Kuwait approved spending of USD 65bn for projects in fiscal year 2021-2022. This includes new projects as well as a continuation of projects launched before. According to a local media outlet, nearly half of the projects are related to diversifying the economic base. Kuwait, unlike its other GCC peers, has yet to commit to diversification efforts, but the current oil price level can help the country in laying out a plan towards diversification.

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	-0.3%	0.4%	-0.7%
	YTD3 1 Year 3 Year	17.8% 33.2% 22.4%	20.6% 38.0% 21.6%	-2.8% -4.8% 0.8%
	5 Year	56.2%	44.7%	11.5%
	Since Inc.	22.2%	16.6%	5.6%

1 Performance is net of fees; return is cumulative

• 2 S&P Pan Arab Composite Index

3 As of 28th July 2021

	1Performance is net of fees; return is cumulative 2S&P Pan Arab Composite Index 3As of 28thJuly 2021 5 Year 56.2% Since Inc. 22.2%	44.7% 16.6%	11.5% 5.6%
	Holding	Top 5 Holdings	% of Fund
	Saudi National Bank Mouwasat Medical Services Al Rajhi Bank		6.5 6.1 5.4
	United Electronics		5.0
	Saudi Basic Industries		3.4
		Fund Analysis
	Matrix4	Fund	Benchmark
	Standard Deviation	13.1%	15.0%
	Tracking Error Beta No. of Holdings	5.4% 0.8 48

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

Sector Allocation

36% - Financials

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14% - Consumer Discretionary
11% - Materials
9% - Health Care
6% - Communication Services
6% - Real Estate
6% - Consumer Staples
6% - Industrials
2% - Energy
2% - Information Technology
1% - Utilities
1% - Cash
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		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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20
10Y Fund Strategy Performance
Al Mal MENA Equity Fund
18 S&P Pan Arab Composite Index (Rebased)
51% - Saudi Arabia
AZ Al Mal Equity Fund
16
14% - United Arab Emirates
14
12% - Egypt
10% - Qatar 12
7% - Kuwait 10
5% - Others 8
1% - 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 MENA Equity Fact Sheet July 2021 NAV Per Unit: USD 10.41

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Fund Manager Commentary

US indices ebbed and flowed through the month due to themes like falling treasury yields, potentially higher than expected inflation and the delta variant. The lack of direction in the markets were evident, as the S&P 500 and the NASDAQ closed out the week flat. Brent had a volatile month as well, as the UAE initially held out on an agreement to revise supply cuts as it remained committed to an upward revision of its baseline from 3.2mb/d to 3.9mb/d. However, UAE and KSA came to an agreement in the latter half of the month. The deal reportedly increases the UAE’s baseline from 3.17 mb/d to 3.65 mb/d starting May 2022. We continue to see strength in oil prices, as projected increased supply from the cartel seem to still be playing catch up with global demand.

KSA reinforced its target for the transportation sector to contribute 10% of GDP by 2030, up from 6% currently. They announced a spending plan of USD 133bn which will be concentrated in launching a new national airline, tripling passengers, expanding airports, increasing port’s capacity and connecting major cities. We see tremendous potential in this sector, with valuations slightly depressed on a relative basis due to the overhang from the pandemic. Portfolio holding, eXtra, reported 2Q21 earnings with headline earnings up 11% y/y to amount to SAR 100.5mn. There was a 14% y/y decline in topline as a result of the high base from last year which was a result of pre-VAT buying, but, the continued pick up in Tas’heel, Extra’s consumer finance arm, continues to impress and offset any near-term weakness in the electronics business (off a high base) contributing SAR 25.4mn vs SAR 4.3mn in 2Q20.

Kuwait approved spending of USD 65bn for projects in fiscal year 2021-2022. This includes new projects as well as a continuation of projects launched before. According to a local media outlet, nearly half of the projects are related to diversifying the economic base. Kuwait, unlike its other GCC peers, has yet to commit to diversification efforts, but the current oil price level can help the country in laying out a plan towards diversification.

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	-0.2%	0.4%	-0.6%
	YTD3	17.1%	20.6%	-3.5%
	1 Year 3 Year 5 Year	33.1% 20.9% 53.4%	38.4% 21.7% 42.9%	-5.3% -0.8% 10.5%
	Since Inc.	21.2%	-22.2%	43.4%

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

2 S&P Pan Arab Composite Index

3 As of 28th July 2021

	Holding	Top 5 Holdings	% of Fund
	Saudi National Bank Mouwasat Medical Services Co Al Rajhi Bank		6.6 6.1 5.3
	United Electronics Co		5.0
	Saudi Basic Industries		3.4
		Fund Analysis
	Matrix4	Fund	Benchmark
	Standard Deviation	13.3%	15.0%
	Tracking Error Beta Dividend Yield 2020	5.2% 0.8 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

Sector Allocation

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Geographic Allocation

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Disclaimer

	Fund Information
Fund Manager Fu	Sherif El Haddad Sherif El Haddad
InceptionDate Inceptio Date	15th June 2008 15th June 2008
FundSize Fu Size	USD 28 million USD 31 million
StrategySize Strateg Size	USD 250 million USD 250 million
Domicile Do	Bahrain Bahrain
Currency Cu	USD USD
Subscription & Redemption Su	Weekly Weekly
Min Subscription Min S	USD 250,000 USD 250,000
BloombergCode Blo Code	MALMENE BI MALMENE BI
ManagementFee Manag Fee	1.75% 1.75%
BenchmarkIndex Ben Index	S&P Pan Arab Composite S&P Pan Arab Composite
FundType Fu Type	Open Ended Open Ended
Administrator Ad	Apex Apex
Custodian Cu	Standard Chartered Standard Chartered

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35% - Financials
FuFu nd Manager Sherif El HaddadSherif El Haddad
14% - Consumer Discretionary
InceptioInceptio n DateDate 15th June 200815th June 2008
11% - Materials
FuFu nd SizeSize USD 28 millionUSD 31 million
9% - Health Care StrategStrateg y SizeSize USD 250 millionUSD 250 million
6% - Real Estate DoDo micile BahrainBahrain
CuCu rrency USDUSD
6% - Communication Services
SuSu bscription & Redemption Weekly Weekly
6% - Industrials Min SMin S ubscription USD 250,000 USD 250,000
6% - Consumer Staples BloBlo omberg CodeCode MALMENE BIMALMENE BI
ManagManag ement FeeFee 1.75%1.75%
2% - Energy
BenBen chmark IndexIndex S&P Pan Arab CompositeS&P Pan Arab Composite
2% - Information Technology FuFu nd TypeType Open EndedOpen Ended
2% - Utilities AdAd ministrator ApexApex
CuCu stodian Standard CharteredStandard Chartered
1% - Cash
10Y Fund Strategy Performance
20
18 Al Mal MENA Equity Fund Benchmark
50% - Saudi Arabia
16
14% - UAE
13% - Egypt 14
9% - Qatar
12
7% - Kuwait
10
4% - Morocco
2% - Oman 8
1% - 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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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 July 2021 NAV Per Unit: AED 1.43

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Fund Manager Commentary

According to the MENA Investment Banking Review, out of the USD 70.6bn raised through capital markets in the MENA region for H1 2021, UAE was the top nation for DCM proceeds raising almost USD 20.5bn across the period. Debt raised in the utilities and energy sector were the primary contributing sectors in the DCM activity in the UAE. Additionally, out of the equity and equity-related issuance totaling USD2.1 bn during the first half of 2021, UAE was also the most active in ECM activity with USD 1.7bn in proceeds raised. Out of the USD 1.7bn, USD 1.1bn was raised through ADNOC’s convertible offering. We continue to see corporate issuances in the short to medium term, particularly on the equity side through the ADX via liquidity boosting mechanisms.

In Dubai, consumer confidence hit multi-year highs as stimulus measures and vaccination rates softened the blow from the pandemic. In addition, there seems to be a marked improvement in tourism as higher occupancy rates have pushed up average daily room rates from USD 65 from July of last year to USD 104 in May 2021. Taqa and Abu Dhabi ports announced intentions to develop a 2GW green ammonia project in the UAE. This move is in line with other regional competitors like Aramco who see the potential of ammonia as a means to transport hydrogen, albeit using a slightly different process producing blue ammonia. We see a lot of investment in this area particularly in the region, with lofty decarbonization targets that remain to be met.

Emaar properties expects to conclude 2021 with EBITDA of USD 2.2bn, after S&P raised it outlook on Emaar to stable from negative. Emaar remains best positioned to capitalize on a recovering Dubai real estate market, which has seen monthly property transactions hitting a four-year high of AED 11.1bn last month, with the developer achieving approximately 50% market share of new sales.

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	-0.6%	2.2%	-2.8%
	YTD3 1 Year 3 Year	17.7% 44.3% 14.9%	24.2% 45.5% 5.0%	-6.5% -1.2% 9.9%
	5 Year	35.4%	1.6%	33.8%
	Since Inc.	73.7%	-36.0%	109.7%

1 Performance is net of fees; return is cumulative

2 S&P UAE Composite Index

3 As of 28th July 2021

Top 3 Holdings

		Top 3 Holdings
	Holding		% of Fund
	Emirates NBD First Abu Dhabi Bank		9.2 9.2
	Emaar Properties		9.0
		Fund Analysis
	Matrix4	Fund	Benchmark
	Standard Deviation	17.2%	23.1%
	Tracking Error	11.2%
	Beta	0.66
	Dividend Yield 2020	4.5%
	No. of Holdings	20

4 Calculated using 3-year weekly data

Sector Allocation

Fund Information

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38% - Financials
15% - Real Estate
13% - Communication Services
10% - Industrials
8% - Consumer Discretionary
8% - Consumer Staples
4% - Health Care
3% - Utilities
1% - Information Technology
0% - Cash
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	Fund Manager	Sherif El Haddad
	Fund Size	AED 52 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

Geographic Allocation

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10Y Fund Strategy Performance
Al Mal UAE Equity Fund Benchmark
24
22
20
46% - Abu Dhabi
18
39% - Dubai 16
8% - KSA 14
4% - Kuwait 12
10
3% - Qatar
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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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.