AL Mal UAE Equity Fund — Fund Information / Factsheet 2023

Jan 6, 2023

AZ Al Mal MENA Equity Fact Sheet December 2022

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NAV Per Unit: USD 6.76

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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.

During December, the S&P 500 dropped 6.2%, while the Nasdaq tumbles 9.7%. The major indices are on pace for their biggest monthly declines since September. After a brutal year of inflation and recession fears, investors hoped to cap off 2022 on a positive note however bearish sentiment seems to be the name of the game at least until the Fed pivots. Obstacles such as the war between Russia and Ukraine, surging inflation, the Federal Reserve hiking rates for the first time since 2018, only instilled greater recession fears. Nonetheless, the labor market has remained resilient even as interest rates have risen. Yields in 2022 surged to their highest levels since 2008. Furthermore, the yield curve inversion between the 2-year and the 10-year Treasury notes hit their widest level in four decades.

Fund Performance

			Fund Performance
	Performance1	Fund	Benchmark2	Alpha
	1 Month	-2.2%	-4.0%	1.8%
	YTD3 1 Year 3 Year	-0.5% 0.0% 39.5%	-7.8% -7.4% 19.8%	7.3% 7.4% 19.7%
	5 Year	52.0%	34.3%	17.7%
	Since Inc.	35.1%	15.1%	20.0%

GDP in Saudi Arabia grew by 8.8% y/y and 2.1% q/q in Q3, supported by both oil and non-oil sector growth (14.2% y/y and 6% respectively). Within the non-oil sector, manufacturing posted the strongest gains. Saudi Arabia’s finance minister disclosed that nominal GDP is expected to rise to a record-high SAR 3.97trn (USD 1.05trn) this year and rise further to SAR 3.9-4trn in 2023. Saudi Arabia’s fiscal balance has moved into a surplus this year roughly 2.3% of GDP thanks to the increase in both oil and non-oil revenues. In 2023, revenues are estimated to drop by 8% y/y reducing the budget surplus by a tenth to SAR 9bn. Diversification efforts will support non-oil revenue generation in Saudi Arabia. Various financing tools have been mentioned in the Ministry’s report (including bonds, sukuk and loans), to support the rollout of strategic & developmental projects.

• 1 Performance is net of fees; return is cumulative

• 2 S&P Pan Arab Composite Index

	3As of 28thDecember 2022 Holding Saudi National Bank	Top 5 Holdings	% of Fund 7.2
	Saudi Aramco		6.8
	Tanmiah Food Company		4.6
	Adnoc Drilling Company		4.3
	Qatar National Bank		4.2
		Fund Analysis
	Matrix4 Standard Deviation	Fund 14.1%	Benchmark 16.2%
	Tracking Error	5.9%
	Beta	0.8
	No. of Holdings	36

Portfolio Holding Maaden announced the renewal of its five-year murabha revolver loan for five more years. The murabha revolver loan was financed by Saudi National Bank, Banque Saudi Fransi, Al Rajhi Bank, Saudi British Bank, Gulf International Bank, Riyad Bank, Bank Al Jazira and Arab National Bank, worth SAR11.25bn, raised from the previous SAR7.5bn. We appreciate the company’s efforts to proactively reduce the risk of commodity price downturn, strengthen the Company liquidity and support future growth projects.

The Communications, Space and Technology Commission (CST) announced that Portfolio Holding STC has won the auction for non-terrestrial networks (NTN), whereby it was bidding against three other companies on two spectrum blocks with a total bandwidth of 60MHz. The frequency spectrum will allow STC to carry out mobile satellite services (MSS) and extend its coverage of in-flight broadband internet access (through air-to-ground or A2G solution) to all regions of the Kingdom. The auction aims to extend coverage to areas lacking terrestrial network coverage and promote technological innovation through stimulating the deployment of NTNs. We continue to like STC given their diversified business lines, lion’s share of the market and numerous upside catalysts poised to unlock value.

• 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 Fund Advisor	Al Mal Capital PJSC Faisal Hasan, CFA
	Inception Date	June 26, 2019
	Fund Size	USD 64 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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29% - Financials
12% - Materials Currency USD
11% - Energy Subscription & Redemption Weekly
8% - Cash Min Subscription USD 1 (Retail) -250,000 (Institutional)
8% - Consumer Staples Bloomberg Code AZ3AZUA LX
8% - Communication Services Management Fee Up to 2.0%
7% - Consumer Discretionary Benchmark Index S&P Pan Arab Composite
5% - Industrials Fund Type Open Ended
4% - Utilities Administrator & Custodian BNP Paribas
4% - Information Technology 10Y Fund Strategy Performance
2% - Health Care
24
2% - Real Estate Al Mal MENA Equity Fund
22 S&P Pan Arab Composite Index (Rebased)
44% - Saudi Arabia 20 AZ Al Mal Equity Fund
28% - UAE
18
13% - Qatar
16
8% - Cash
14
5% - Kuwait
12
1% - Morocco
1% - Bahrain 10
8
6
Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 Jan-20 Jan-21 Jan-22
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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 MENA Equity Fact Sheet December 2022 NAV Per Unit: USD 10.53

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Fund Manager Commentary

During December, the S&P 500 dropped 6.2%, while the Nasdaq tumbles 9.7%. The major indices are on pace for their biggest monthly declines since September. After a brutal year of inflation and recession fears, investors hoped to cap off 2022 on a positive note however bearish sentiment seems to be the name of the game at least until the Fed pivots. Obstacles such as the war between Russia and Ukraine, surging inflation, the Federal Reserve hiking rates for the first time since 2018, only instilled greater recession fears. Nonetheless, the labor market has remained resilient even as interest rates have risen. Yields in 2022 surged to their highest levels since 2008. Furthermore, the yield curve inversion between the 2-year and the 10-year Treasury notes hit their widest level in four decades.

GDP in Saudi Arabia grew by 8.8% y/y and 2.1% q/q in Q3, supported by both oil and non-oil sector growth (14.2% y/y and 6% respectively). Within the non-oil sector, manufacturing posted the strongest gains. Saudi Arabia’s finance minister disclosed that nominal GDP is expected to rise to a record-high SAR 3.97trn (USD 1.05trn) this year and rise further to SAR 3.9-4trn in 2023. Saudi Arabia’s fiscal balance has moved into a surplus this year roughly 2.3% of GDP thanks to the increase in both oil and non-oil revenues. In 2023, revenues are estimated to drop by 8% y/y reducing the budget surplus by a tenth to SAR 9bn. Diversification efforts will support non-oil revenue generation in Saudi Arabia. Various financing tools have been mentioned in the Ministry’s report (including bonds, sukuk and loans), to support the rollout of strategic & developmental projects.

Portfolio Holding Maaden announced the renewal of its five-year murabha revolver loan for five more years. The murabha revolver loan was financed by Saudi National Bank, Banque Saudi Fransi, Al Rajhi Bank, Saudi British Bank, Gulf International Bank, Riyad Bank, Bank Al Jazira and Arab National Bank, worth SAR11.25bn, raised from the previous SAR7.5bn. We appreciate the company’s efforts to proactively reduce the risk of commodity price downturn, strengthen the Company liquidity and support future growth projects.

The Communications, Space and Technology Commission (CST) announced that Portfolio Holding STC has won the auction for non-terrestrial networks (NTN), whereby it was bidding against three other companies on two spectrum blocks with a total bandwidth of 60MHz. The frequency spectrum will allow STC to carry out mobile satellite services (MSS) and extend its coverage of in-flight broadband internet access (through air-to-ground or A2G solution) to all regions of the Kingdom. The auction aims to extend coverage to areas lacking terrestrial network coverage and promote technological innovation through stimulating the deployment of NTNs. We continue to like STC given their diversified business lines, lion’s share of the market and numerous upside catalysts poised to unlock value.

Sector Allocation

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28% - Financials
12% - Materials
11% - Energy
10% - Consumer Discretionary
8% - Consumer Staples
7% - Communication Services
7% - Cash
5% - Industrials
4% - Information Technology
4% - Utilities
2% - Health Care
2% - Real Estate
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Geographic Allocation

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44% - Saudi Arabia
28% - UAE
12% - Qatar
7% - Cash
5% - Kuwait
2% - Morocco
2% - Bahrain
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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%	-4.0%	1.8%
	YTD3 1 Year 3 Year	-1.1% -0.1% 38.8%	-7.8% -7.1% 22.8%	6.7% 7.0% 16.0%
	5 Year	53.1%	37.5%	15.6%
	Since Inc.	32.9%	-23.3%	56.2%

• 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 December 2022

	Holding Saudi National Bank	Top 5 Holdings	% of Fund 6.9
	Saudi Aramco Co.		5.9
	Tanmiah Food Company		4.4
	Qatar Gas Transport		4.1
	Adnoc Drilling Company		4.1
		Fund Analysis
	Matrix4	Fund	Benchmark
	Standard Deviation	14.0%	16.0%
	Tracking Error	5.6%
	Beta	0.8
	Dividend Yield 2022	4.0%
	No. of Holdings	36

Fund Information

	Fund Manager Inception Date Fund Manager Inception Date	Sherif El Haddad 15th June 2008 Faisal Hasan, CFA 15th June 2008
	Fund Size Fund Size	USD 28 million USD 22 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

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24 10Y Fund Strategy Performance
22 Al Mal MENA Equity Fund Benchmark
20
18
16
14
12
10
8
6
Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 Jan-20 Jan-21 Jan-22
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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 December 2022

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NAV Per Unit: AED 1.58

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Fund Manager Commentary

Objective

The DFM General Index rose 0.36% in the month of December. Dubai’s economy grew 4.6% y/y in the first nine months of 2022. Growth slowed to 2.3% y/y in Q2 but then picked up again to 6.0% y/y in Q3. Manufacturing and utilities output growth has accelerated in Q3 on an annual basis, as has wholesale and retail trade. Overall however, wholesale and retail trade GDP growth has slowed this year relative to 2021, but this is likely also due to base effects post-pandemic. The ADX fell -2.46% in December on weaker oil prices, although it was 2022's best performer among the Gulf Cooperation Council countries. The index finished the year with a more than 20% gain, after hitting an all-time high in early November.

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

	Performance1	Fund	Fund Performance Benchmark2	Alpha
	1 Month	-2.8%	-3.4%	0.6%
	YTD3 1 Year 3 Year	6.6% 6.4% 51.3%	2.6% 3.3% 28.1%	4.0% 3.1% 23.2%
	5 Year Since Inc.	50.3% 108.2%	18.1% -27.1%	32.2% 135.3%

The UAE issued the Federal Decree Law No 47 of 2022 on Taxation of Corporations and Businesses: a standard rate of 9% will be levied on companies’ taxable profits exceeding AED 375,000 (USD 102,000). The tax will be charged on earnings for financial years starting on or after June 1, 2023. In recognition of the fundamental role of free trade zones in driving the nation’s economic transformation, the existing free zone entities will be eligible to benefit from a 0 percent Corporate Tax rate on qualifying income.

1 Performance is net of fees; return is cumulative

2 S&P UAE Domestic 10% Capped Index

3 As of 28th December 2022

Top 3 Holdings

	Holding	% of Fund
	Abu Dhabi Ports	6.9
	Emaar Properties	6.8
	Emirates NBD	6.3

Portfolio Holding Abu Dhabi Ports Group signed an agreement to launch a joint venture with Kazakh National Oil Company's subsidiary, an offshore logistics and services company. The JV aims to offer offshore and shipping services for energy companies in the Caspian Sea, such as offshore support vessels and integrated offshore logistics and subsea solutions. The company also intends to tender projects with approximate maritime contracts valued at USD780mn. Both Ad Ports and KMTF signed a 7-year contract for pool tanker services, pertaining the provision of a few tankers that will transport crude oil internationally. Furthermore, KMTF and SAFEEN will work together to carry 8-10m tonnes of crude oil annually.

	Fund Analysis	Fund Analysis
	Matrix4	Fund	Benchmark
	Standard Deviation	16.7%	23.9%
	Tracking Error Beta Dividend Yield 2022	10.5% 0.6 4.0%
	No. of Holdings	21

Portfolio Holding ADNOC Drilling signed a USD200m contract to acquire two highspecification offshore jack-up rigs. The company also signed sale and purchase agreements in November for three rigs, May for two rigs, June for one rig and August for one rig, as part of its three-year capex guidance for its fleet expansion plans. The capex will be recorded in 2022 and 2023, while the financial impact will be reflected subsequently.

4 Calculated using 3-year weekly data

		Fund Information
	Fund Manager	Faisal Hasan, CFA
	Fund Size	AED 56 million
	Domicile	UAE
	Currency	AED
	Subscription & Redemption Min Subscription	Weekly AED 40,000
	Management Fee	1.50%
	Performance Fee	20% over 10% hurdle with high watermark
	Financial Year End	31st December
	Benchmark Index	S&P UAE Domestic 10% Capped Index
	Fund Type	Open Ended
	Administrator & Custodian	Standard Chartered

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Currency AED
Subscription & Redemption Weekly
Sector Allocation
34% - Financials Min Subscription AED 40,000
Management Fee 1.50%
14% - Industrials
13% - Real Estate Performance Fee 20% over 10% hurdle with highwatermark
8% - Utilities Financial Year End 31st December
7% - Communication Services Benchmark Index S&P UAE Domestic 10% Capped Index
6% - Energy Fund Type Open Ended
6% - Materials Administrator & Custodian Standard Chartered
5% - Consumer Discretionary
5% - Cash
2% - Consumer Staples 10Y Fund Strategy Performance
Al Mal UAE Equity Fund Benchmark
33
Geographic Allocation 30
55% - Abu Dhabi 27
34% - Dubai 24
6% - KSA 21
18
5% - Cash
15
12
9
6
Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 Jan-20 Jan-21 Jan-22
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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.