AL Mal UAE Equity Fund — Fund Information / Factsheet 2021

Oct 5, 2021

AZ Al Mal MENA Equity Fact Sheet September 2021 NAV Per Unit: USD 6.32

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Fund Manager Commentary

This year’s September was one of the weakest months in terms of performance since the pandemic started, with the S&P 500 and NASDAQ concluding the month down 3.93% and 2.59%, respectively. The market’s downturn was largely on the back of a mix of the Evergrande debacle, rising treasury yields, uncertainty against the outcome of the debt ceiling, and negative COVID-19 related news. Brent crude prices are beginning to near 2018 highs, approaching the elusive USD 80/barrel mark on tighter supply in natural gas, resulting in substitution with oil. We are closely watching China’s selling of strategic reserves but continue to maintain our positive outlook on the commodity. Additionally, we have taken note of the spike in natural gas prices hitting 7-year highs on a mix of tightened supply and higher demand. We see this filtering into the region particularly through fertiliser, paper, glass and utilities players, but in a rather limited manner compared globally due to subsidized feedstock across the MENA.

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	0.1%	1.7%	-1.6%
	YTD3 1 Year 3 Year	21.8% 27.2% 35.5%	26.7% 33.1% 33.1%	-4.9% -5.9% 2.4%
	5 Year	67.1%	62.7%	4.4%
	Since Inc.	26.3%	22.5%	3.8%

1 Performance is net of fees; return is cumulative

• 2 S&P Pan Arab Composite Index

3 As of 29th Sept2021

In KSA, September was a busy month for IPOs, seeing the listing of portfolio holding STC solutions and the conclusion of the institutional book building process for ACWA Power. STC solutions listed on Tadawul on the 30th of September after an extremely successful book building process, with the retail and institutional offerings oversubscribed by 2,365% and 13,004%, respectively, raising SAR 471bn. Saudi Utility giant, Acwa Power, received bids worth 258 times of what they issued, receiving orders worth USD 300bn from institutional investors. IPOs will unlikely slow down in the near-term, with the CMA indicating a backlog of 45 listings pending approval.

Portfolio holding LabelVie reported Q2 2021 revenues of MAD 2.7bn, an increase of 9.6% y/y, driven mainly by new store openings as the retail sector in Morocco continues to show room for privatization growth. H1 revenues were down y/y, as expected, as the base year includes extraordinary stockpiling purchases amidst the pandemic. Nevertheless, LfL store sales are actually up +4% y/y, which we view positively as management delivers on its store ramp up guidance. With 16 new store openings in H1 2021, management is well positioned to meet its 24 new stores target in FY 21.

	1Performance is net of fees; return is cumulative 2S&P Pan Arab Composite Index 3As of 29thSept2021 5 Year 67.1% Since Inc. 26.3%	62.7% 22.5%	4.4% 3.8%
	Holding	Top 5 Holdings	% of Fund
	Al Rajhi Bank Mouwasat Medical Services United Electronics		9.1 5.2 4.6
	The Saudi National Bank		4.2
	Saudi Basic Industries		3.4
		Fund Analysis
	Matrix4	Fund	Benchmark
	Standard Deviation	12.9%	15.0%
	Tracking Error Beta No. of Holdings	5.3% 0.8 46

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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38% - Financials
12% - Cash
10% - Materials
10% - Consumer Discretionary
6% - Consumer Staples
6% - Communication Services
6% - Industrials
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5% - Health Care
3% - Real Estate
2% - Energy
2% - Information Technology
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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 79 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

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Disclaimer
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Geographic Allocation

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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
47% - Saudi Arabia
14% - UAE 14
12% - Cash 12
10% - Egypt
10
8% - Qatar
8
5% - Others
4% - Kuwait 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.

September 2021 NAV Per Unit: USD 10.76

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Al Mal MENA Equity Fact Sheet

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Fund Manager Commentary

This year’s September was one of the weakest months in terms of performance since the pandemic started, with the S&P 500 and NASDAQ concluding the month down 3.93% and 2.59%, respectively. The market’s downturn was largely on the back of a mix of the Evergrande debacle, rising treasury yields, uncertainty against the outcome of the debt ceiling, and negative COVID-19 related news. Brent crude prices are beginning to near 2018 highs, approaching the elusive USD 80/barrel mark on tighter supply in natural gas, resulting in substitution with oil. We are closely watching China’s selling of strategic reserves but continue to maintain our positive outlook on the commodity. Additionally, we have taken note of the spike in natural gas prices hitting 7-year highs on a mix of tightened supply and higher demand. We see this filtering into the region particularly through fertiliser, paper, glass and utilities players, but in a rather limited manner compared globally due to subsidized feedstock across the MENA.

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%	1.7%	-1.9%
	YTD3	21.0%	26.7%	-5.7%
	1 Year	26.9%	34.5%	-7.6%
	3 Year	34.1%	34.8%	-0.7%
	5 Year	63.3%	58.1%	5.2%
	Since Inc.	25.3%	-18.3%	43.6%

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

2 S&P Pan Arab Composite Index

3 As of 29th Sept 2021

In KSA, September was a busy month for IPOs, seeing the listing of portfolio holding STC solutions and the conclusion of the institutional book building process for ACWA Power. STC solutions listed on Tadawul on the 30th of September after an extremely successful book building process, with the retail and institutional offerings oversubscribed by 2,365% and 13,004%, respectively, raising SAR 471bn. Saudi Utility giant, Acwa Power, received bids worth 258 times of what they issued, receiving orders worth USD 300bn from institutional investors. IPOs will unlikely slow down in the near-term, with the CMA indicating a backlog of 45 listings pending approval.

Portfolio holding LabelVie reported Q2 2021 revenues of MAD 2.7bn, an increase of 9.6% y/y, driven mainly by new store openings as the retail sector in Morocco continues to show room for privatization growth. H1 revenues were down y/y, as expected, as the base year includes extraordinary stockpiling purchases amidst the pandemic. Nevertheless, LfL store sales are actually up +4% y/y, which we view positively as management delivers on its store ramp up guidance. With 16 new store openings in H1 2021, management is well positioned to meet its 24 new stores target in FY 21.

	Holding	Top 5 Holdings	% of Fund
	Al Rajhi Bank		9.9
	Mouwasat Medical Services Co		5.7
	United Electronics Co		5.0
	Saudi National Bank		4.5
	Saudi Basic Industries		3.7
		Fund Analysis
	Matrix4	Fund	Benchmark
	Standard Deviation	13.1%	14.9%
	Tracking Error	5.1%
	Beta	0.8
	Dividend Yield 2020	4.0%
	No. of Holdings	46

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
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42% - Financials
11% - Consumer Discretionary
11% - Materials
7% - Communication Services
7% - Consumer Staples
6% - Industrials
6% - Health Care
3% - Real Estate
3% - Cash
2% - Energy
2% - Information Technology
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	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 32 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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10Y Fund Strategy Performance
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Disclaimer

Geographic Allocation

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20
18 Al Mal MENA Equity Fund Benchmark
52% - Saudi Arabia
16
15% - UAE
14
11% - Egypt
9% - Qatar 12
5% - Kuwait
10
4% - Morocco
3% - Cash 8
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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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 September 2021 NAV Per Unit: AED 1.46

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Fund Manager Commentary

The Central Bank of the UAE revised its expectations for GDP growth downwards from 2.4% to 2.1%, yet raised its growth projections for 2022 from 3.8% to 4.2%. The revision of 2022’s growth prospects is a culmination of “continued public spending, bank’s credit outlook, higher employment and better business sentiment”. In addition, infection rates across the UAE have dropped below the 400 mark helped by the Country’s fastest vaccination campaigns globally. With Expo 2020 having begun as of time of writing, we remain positive on an economic recovery for the UAE.

Economic reforms continue in the UAE as the country launched a series of initiatives and a budget of AED 24bn to give citizens access to 75,000 private sector jobs over the next five years. The UAE also eased residency guidelines, allowing for expats to apply for work without employer sponsorship, and extending residencies for those unemployed to 180 days from termination date. This should further aid in boosting the Country’s population along with getting closer to the nation’s USD 150bn FDI target over the next nine years. Also in September, the ADX announced it will cut commissions by 50% and extend trading hours from 1 September with the intention to boost liquidity in the market. The fee will be reduced to 2.5 bps from 5 bps and the market will open at 10am and close at 3pm.

Portfolio Holding, Agthia announced the acquisition of BMB group for a reported value of AED 686m. Launched in 2007, the BMB group is a conglomerate food company with chocolate, Mediterranean sweets, healthy snacks and healthy food brands with two state of the art food production facilities based in Dubai, operating in 23+ countries. BMB operates under the brands Freakin’ Healthy, Recipe No 7, Smart Gourmet, Asateer, Simply BKLVA, Petit Gourmet and Melly’s to name a few. BMB distributes over 2,000 SKUs globally, with countries including the UAE, Saudi Arabia and USA.

Portfolio holding Emaar Properties and its shopping malls unit Emaar Malls received final regulatory approval to merge. The joint statement from the two entities noted that the statutory merger will give Emaar Malls shareholders 0.51 Emaar Properties shares for every 1 Emaar Mall share. Another portfolio holding in the UAE, Etisalat, announced they secured regulatory approval to increase its FoL of its share capital to 49%. We view this positively for foreign inflows and liquidity.

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	-1.2%	-0.4%	-0.8%
	YTD3	20.1%	29.6%	-9.5%
	1 Year 3 Year	37.3% 22.8%	47.2% 10.3%	-9.9% 12.5%
	5 Year	41.3%	7.8%	33.5%
	Since Inc.	77.2%	-33.1%	110.3%

1 Performance is net of fees; return is cumulative

2 S&P UAE Composite Index

3 As of 29th Sept 2021

Top 3 Holdings

		Top 3 Holdings
	Holding		% of Fund
	First Abu Dhabi Bank		9.9
	Abu Dhabi Commercial Bank		9.5
	Emirates NBD		9.4
		Fund Analysis
	Matrix4	Fund	Benchmark
	Standard Deviation	16.9%	23.1%
	Tracking Error Beta Dividend Yield 2020	11.1% 0.7 4.5%
	No. of Holdings	19

4 Calculated using 3-year weekly data

Fund Information

	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

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Sector Allocation
40% - Financials
14% - Communication Services
13% - Real Estate
11% - Consumer Staples
10% - Industrials
4% - Consumer Discretionary
4% - Health Care
3% - Cash
1% - Information Technology
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10Y Fund Strategy Performance
Al Mal UAE Equity Fund Benchmark
24
22
20
18
16
14
52% - Abu Dhabi
12
37% - Dubai 10
8% - KSA 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.