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AL Mal UAE Equity Fund — Fund Information / Factsheet 2021
Dec 5, 2021
66382_rns_2021-12-05_694f8416-8926-4e16-9dd0-06693bdc60be.pdf
Fund Information / Factsheet
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AZ Al Mal MENA Equity Fact Sheet November 2021
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NAV Per Unit: USD 6.78
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Fund Manager Commentary
Objective
Achieve capital appreciation, primarily through investment in equity and equity related securities in the Middle East and North African markets.
The discovery of a new coronavirus variant triggered a sharp sell-off towards the end of November, paring prior gains recorded earlier in the month. The S&P finished November flat m/m, buoyed by tech heavyweights whilst the DOW fared worse, down 2.4% over the same period. In Europe, Germany’s DAX didn’t fare too well either, falling 2.8% partly due to Angela Merkel’s replacement – Social Democrat leader Olaf Scholz along with Christian Lindner, a fiscal conservative to take over as the nation’s finance minister. Meanwhile, November also saw President Biden renominate Jerome Powell as Federal Reserve chair over Lael Brainard, the next leading candidate for the position. November FOMC minutes also showed policymakers advocating for a quicker taper of the Fed’s bond purchases. On the commodities front, crude sold off heavily, falling 18% during the month as OPEC’s commitment to maintain current supply in the market was met with Biden admin officials signalling the possibility of releasing supply from the nation’s strategic petroleum reserve – the world’s largest backup of oil.
Fund Performance
| Fund Performance | |||||
|---|---|---|---|---|---|
| Performance1 | Fund | Benchmark2 | Alpha | ||
| 1 Month | 0.2% | -1.1% | 1.3% | ||
| YTD3 1 Year 3 Year |
30.7% 33.3% 50.6% |
29.8% 31.0% 39.0% |
0.9% 2.3% 11.6% |
||
| 5 Year | 83.4% | 54.4% | 29.0% | ||
| Since Inc. | 35.6% | 25.5% | 10.1% |
1 Performance is net of fees; return is cumulative
- 2 S&P Pan Arab Composite Index
3 As of 24th Nov 2021
Top 5 Holdings
| Holding | Top 5 Hongs | % of Fund | ||
|---|---|---|---|---|
| Al Rajhi Bank Mouwasat Medical Services Saudi National Bank |
9.6 5.0 4.9 |
|||
| Commercial International Bank | 4.6 | |||
| United Electronics | 4.4 | |||
| Fund Analysis | ||||
| Matrix4 | Fund | Benchmark | ||
| Standard Deviation | 13.2% | 15.0% | ||
| Tracking Error Beta No. of Holdings |
5.4% 0.8 48 |
Outside of oil prices, macro data coming out of Saudi remained strong. Preliminary estimates suggest the economy grew at its fastest pace in the past decade during Q3 2021, with non-oil GDP expanding 6.2%. Moody’s changed its country outlook on the Country from negative to stable and reaffirmed its ratings on nine Saudi banks. The Government also tapped into the debt market for the third time this year, raising USD 3.25bn with a mix of Islamic debt and US conventional debt. Portfolio holding Mouwasat reported Q3 2021 earnings with net income down 11% y/y attributable to slightly lower revenues and weaker margins, though this is on a high base effect during 2020. Revenue declined 3% y/y largely weighed down by a high Q3 20 base during which patient flows were boosted by limited travel and pent up demand.
In Egypt, the government announced a plan to reduce fees on trading on the EGX to improve market sentiment, ahead of the introduction of the capital gains tax. The government announced their intention to cancel stamp duty tax, deduct securities related expenses, cutting tax on profits made from IPOs, lowering charges on swaps and taxes paid on retail investors in a mutual fund. Furthermore, Russia lifted its 6- year ban on direct flights to Egypt’s touristic destinations, resuming charter flights to Hurghada and Sharm El Sheikh, overall positive for the economy. November also saw Egypt approved instant electronic payments between bank accounts via mobile phones allowing instant money transfers and topping up of pre-paid cards and e- wallets. Portfolio holding MM group along with peers such as Fawry will be key beneficiaries of the aforementioned change in legislation.
- 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; calculatedusing 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 86 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 |
Sector Allocation
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49% - Financials Strategy Size
11% - Materials Domicile Luxembourg
Currency USD
9% - Consumer Discretionary
Subscription & Redemption Weekly
6% - Industrials
Min Subscription USD 1 (Retail) -250,000 (Institutional)
5% - Health Care Bloomberg Code AZ3AZUA LX
4% - Communication Services Management Fee Up to 2.0%
4% - Real Estate Benchmark Index S&P Pan Arab Composite
4% - Consumer Staples Fund Type Open Ended
Administrator & Custodian BNP Paribas
3% - Information Technology
3% - Cash
10Y Fund Strategy Performance
20
2% - Energy
Al Mal MENA Equity Fund
18 S&P Pan Arab Composite Index (Rebased)
AZ Al Mal Equity Fund
16
51% - Saudi Arabia 14
16% - United Arab Emirates
12
11% - Egypt
9% - Qatar 10
5% - Kuwait
8
5% - Others
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
----- End of picture text -----
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 describedherein.
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.
November 2021
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Al Mal MENA Equity Fact Sheet
NAV Per Unit: USD 11.08
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Fund Manager Commentary
Objective
Achieve capital appreciation, primarily through investment in equity and equity related securities in the Middle East and North African markets.
The discovery of a new coronavirus variant triggered a sharp sell-off towards the end of November, paring prior gains recorded earlier in the month. The S&P finished November flat m/m, buoyed by tech heavyweights whilst the DOW fared worse, down 2.4% over the same period. In Europe, Germany’s DAX didn’t fare too well either, falling 2.8% partly due to Angela Merkel’s replacement – Social Democrat leader Olaf Scholz along with Christian Lindner, a fiscal conservative to take over as the nation’s finance minister. Meanwhile, November also saw President Biden renominate Jerome Powell as Federal Reserve chair over Lael Brainard, the next leading candidate for the position. November FOMC minutes also showed policymakers advocating for a quicker taper of the Fed’s bond purchases. On the commodities front, crude sold off heavily, falling 18% during the month as OPEC’s commitment to maintain current supply in the market was met with Biden admin officials signalling the possibility of releasing supply from the nation’s strategic petroleum reserve – the world’s largest backup of oil.
| Performance1 | Fund | Fund Performance Benchmark2 |
Alpha | ||
|---|---|---|---|---|---|
| 1 Month | 0.2% | -1.1% | 1.3% | ||
| YTD3 1 Year 3 Year |
29.8% 33.0% 48.3% |
29.8% 30.9% 37.9% |
0.0% 2.1% 10.4% |
||
| 5 Year | 81.8% | 55.9% | 25.9% | ||
| Since Inc. | 34.4% | -16.3% | 50.7% |
1 Performance is net of fees; 3-year and 5-year return is cumulative
- 2 S&P Pan Arab Composite Index
3 As of 24th Nov 2021
| Holding | Top 5 Holdings | % of Fund | ||
|---|---|---|---|---|
| Al Rajhi Bank Mouwasat Medical Services Saudi National Bank |
10.3 5.1 4.9 |
|||
| Commercial International Bank | 4.7 | |||
| United Electronics | 4.5 | |||
| Fund Analysis | ||||
| Matrix4 | Fund | Benchmark | ||
| Standard Deviation | 13.2% | 14.9% | ||
| Tracking Error Beta Dividend Yield 2021 |
5.3% 0.8 4.0% |
|||
| No. of Holdings | 46 |
Outside of oil prices, macro data coming out of Saudi remained strong. Preliminary estimates suggest the economy grew at its fastest pace in the past decade during Q3 2021, with non-oil GDP expanding 6.2%. Moody’s changed its country outlook on the Country from negative to stable and reaffirmed its ratings on nine Saudi banks. The Government also tapped into the debt market for the third time this year, raising USD 3.25bn with a mix of Islamic debt and US conventional debt. Portfolio holding Mouwasat reported Q3 2021 earnings with net income down 11% y/y attributable to slightly lower revenues and weaker margins, though this is on a high base effect during 2020. Revenue declined 3% y/y largely weighed down by a high Q3 20 base during which patient flows were boosted by limited travel and pent up demand.
In Egypt, the government announced a plan to reduce fees on trading on the EGX to improve market sentiment, ahead of the introduction of the capital gains tax. The government announced their intention to cancel stamp duty tax, deduct securities related expenses, cutting tax on profits made from IPOs, lowering charges on swaps and taxes paid on retail investors in a mutual fund. Furthermore, Russia lifted its 6-year ban on direct flights to Egypt’s touristic destinations, resuming charter flights to Hurghada and Sharm El Sheikh, overall positive for the economy. November also saw Egypt approved instant electronic payments between bank accounts via mobile phones allowing instant money transfers and topping up of pre-paid cards and e-wallets. Portfolio holding MM group along with peers such as Fawry will be key beneficiaries of the aforementioned change in legislation.
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; calculatedusing 3-year weekly data
| Fund Manager Fund Manager |
Sherif El Haddad Fund Information Sherif El Haddad |
|
|---|---|---|
| Inception Date Inception Date |
15th June 2008 15th June 2008 |
|
| Fund Size Fund Size |
USD 28 million USD 33 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 |
Sector Allocation
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50% - Financials
11% - Materials CurrencyCurrency USDUSD
Subscription & RedemptionSubscription & Redemption Weekly Weekly
9% - Consumer Discretionary
Min Subscription Min Subscription USD 250,000 USD 250,000
6% - Industrials Bloomberg CodeBloomberg Code MALMENE BIMALMENE BI
5% - Health Care Management FeeManagement Fee 1.75%1.75%
5% - Communication Services Benchmark IndexBenchmark Index S&P Pan Arab CompositeS&P Pan Arab Composite
4% - Real Estate Fund TypeFund Type Open EndedOpen Ended
AdministratorAdministrator ApexApex
4% - Consumer Staples
CustodianCustodian Standard CharteredStandard Chartered
3% - Information Technology
2% - Energy
1% - Cash 10Y Fund Strategy Performance
20
18 Al Mal MENA Equity Fund Benchmark
52% - Saudi Arabia 16
17% - UAE 14
11% - Egypt
12
9% - Qatar
5% - Kuwait 10
4% - Morocco
8
1% - Cash
1% - 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 describedherein.
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 November 2021
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NAV Per Unit: AED 1.52
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Fund Manager Commentary
The DFM and the ADX were both up 7% over November however all eyes were on the DFM as Dubai announced the intention to list 10 government and state-owned companies. The move is in a bid to increase the current market capitalisation of all stocks on the exchange by nearly 10x. Some of the names linked to this announcement are shaping up to be big ticket IPOs of state-owned enterprises like DEWA (Dubai’s utilities company), Emirates Airlines, Dubai Duty Free, and Salik. In addition to this, Dubai is looking to boost liquidity in the market by launching a USD 545m market making fund and a USD 270m fund to encourage technology companies to list in the local market.
Dubai’s Crown Prince, His Highness Sheikh Hamdan bin Mohammed bin Rashed Al Maktoum, announced the merger of the departments of economy and tourism in a bid to attract 25m tourists by 2025 with an aim to increase the added value from the industrial sector by 150% over the next five years, expand foreign exports for local products by 50%, attract 100,000 companies in 3 years and 400 global economic events annually by 2025. Finally, the UAE announced last week a USD 10bn fund for investments in Turkey. The news came after Abu Dhabi’s Crown Prince H.H. Sheikh Mohammed bin Zayed met Turkish President Recip Erdogan in Ankara on Wednesday. Emirati news agency WAM stated the purpose of the fund was to “support the Turkish economy and boost bilateral cooperation between the two countries” adding that the focus will be within sectors that include energy, food and healthcare.
On a more micro level, portfolio holding Emaar Properties announced it received approval for the Securities and Commodities Authority to increase the company’s capital and issue new shares to Emaar Malls shareholders as a result of the merger. The merger means that Emaar Malls shareholders will receive 0.51 new shares of Emaar Properties except for shares registered currently under Emaar Properties itself. Furthermore, portfolio holding, Emirates Telecommunications Group acquired elGrocer DMCC. elGrocer is an online marketplace for groceries with more than 500 outlets and 120,000 products listed. The acquisition further enhances the company’s digitization efforts.
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 |
5.8% 30.8% 32.8% |
7.2% 41.3% 44.9% |
-1.4% -10.5% -12.1% |
||
| 3 Year | 43.3% | 25.5% | 17.8% | ||
| 5 Year | 56.4% | 22.1% | 34.3% | ||
| Since Inc. | 93.0% | -27.1% | 120.1% |
1 Performance is net of fees; return is cumulative
2 S&P UAE Composite Index
3 As of 24th Nov 2021
Top 3 Holdings
| Holding | % of Fund | |
|---|---|---|
| Emaar Properties | 10.4 | |
| First Abu Dhabi Bank | 10.3 | |
| Dubai Islamic Bank | 10.2 |
Fund Analysis
| Fund Analysis | ||||
|---|---|---|---|---|
| Matrix4 | Fund | Benchmark | ||
| Standard Deviation Tracking Error Beta |
16.9% 11.1% 0.7 |
23.3% | ||
| Dividend Yield 2021 | 4.0% | |||
| No. of Holdings | 18 |
4 Calculated using 3-year weekly data
Fund Information
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Sector Allocation
50% - Financials
19% - Real Estate
12% - Communication Services
7% - Industrials
7% - Consumer Staples
4% - Consumer Discretionary
1% - 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 |
Disclaimer
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10Y Fund Strategy Performance
Geographic Allocation Al Mal UAE Equity Fund Benchmark
24
22
20
18
16
14
48% - Abu Dhabi
12
45% - Dubai
10
6% - KSA
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 describedherein. 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.