AL Mal UAE Equity Fund — Fund Information / Factsheet 2023

Feb 7, 2023

AZ Al Mal MENA Equity Fact Sheet January 2023

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NAV Per Unit: USD 6.96

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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 international markets had a good start to the year with S&P 500 rising by 6% and the tech-heavy Nasdaq Composite soaring by almost 11% in January 2023, the Nasdaq’s best month since July. Stocks moved higher as investors wait for a likely interest rate hike announcement from the Fed and press conference from Fed Chair Jerome Powell, along with the latest job openings which will show whether demand for workers remains high. Stocks have rallied this month due to hopes that inflation pressures are starting to abate. That should allow the Fed to issue smaller rate increases – and possibly even pause them later this year. Still, we believe a recession is likely to begin at some point later this year or in early 2024. Other experts argue that the Fed is likely to keep raising rates until it is certain inflation is no longer a problem.

				Fund Performance
		Performance1	Fund	Benchmark2	Alpha
		1 Month	3.0%	2.7%	0.3%
		YTD3 1 Year 3 Year	3.0% -2.7% 43.9%	2.7% -11.1% 21.7%	0.3% 8.4% 22.2%
		5 Year	42.6%	29.7%	12.9%
		Since Inc.	39.3%	17.7%	21.6%
	1Performance is net of fees; return is cumulative 2S&P Pan Arab Composite Index
	3As of 25thJanuary 2023 Holding			Top 5 Holdings	% of Fund
	Saudi National Bank				6.8
	Adnoc Drilling Company				6.2
	Al Rajhi Bank Qatar Gas Transport Qatar National Bank			Fund Analysis	5.8 4.3 4.2
		Matrix4		Fund	Benchmark
		Standard Deviation		13.8%	16.0%
		Tracking Error		5.9%
		Beta No. of Holdings		0.8 32

The GCC market showed mixed trends in Jan-2023 as Saudi market recorded a strong growth of 3% while the UAE market came under selling pressure and pressure as the Abu Dhabi Index resulted in decline of 3.9% while the Dubai market index recorded a decline of 1% in the first month of 2023.

On the economic front however, the reports and outlook remain strong as oil prices are at high levels. The GCC region continues to attract foreign investments. Saudi Arabia sovereign debt rose by about SAR 52bn to SAR 990bn in 2022 or 25% of GDP but still at comfortable levels as compared to other emerging markets. UAE aims to attract more foreign direct investment (FDI) into its economy this year on the back of new government policies to support businesses and industries. In GCC, after strong growth in IPOs in 2022, the pipeline remains strong led by KSA and UAE. UAE alone has 11 IPOs estimated to be worth USD 2.2bn in the pipeline.

Going into 2023, we continue to like banks benefiting from increased interest rates. Accordingly, we invest in banks showing NIM flexibility, however with strong deposit franchises and corporate activity to grow over the cycle on a tide of economic activity stimulated by fiscal surpluses. Also, petchem prices should see a recovery on China re-opening, and GCC producers are best positioned given a very favourable cost curve. From a bottom-up perspective, secular growth stories in the region should perform well, largely insulated from recession risks and the direction of rates.

• 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 Investment Advisers	Azimut (DIFC) Limited Al Mal Capital PJSC
	Fund Advisor	Faisal Hasan, CFA
	Inception Date	June 26, 2019
	Fund Size	USD 66 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

AZ Al Mal MENA Fund had a good start, and the fund was up 3% in Jan-2023 as compared to 2.7% growth in the benchmark S&P Pan Arab Composite Index. The fund is highly diversified both sectorally as well as geographically and the top-5 position account for only 27.3% of the fund. We are currently 7% in cash as we look at opportunities in the stocks on the fund manager’s watchlist. We see value in companies with high free cash flow yields with strong dividend paying capacity, and pricing power, especially as long-term rates remain controlled.

Sector Allocation

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29% - Financials
13% - Energy Currency USD
9% - Consumer Discretionary Subscription & Redemption Weekly
7% - Cash Min Subscription USD 1 (Retail) -250,000 (Institutional)
7% - Materials Bloomberg Code AZ3AZUA LX
7% - Consumer Staples Management Fee Up to 2.0%
6% - Utilities Benchmark Index S&P Pan Arab Composite
6% - Information Technology Fund Type Open Ended
6% - Communication Services Administrator & Custodian BNP Paribas
5% - Industrials 10Y Fund Strategy Performance
3% - Health Care
24
2% - Real Estate Al Mal MENA Equity Fund
22 S&P Pan Arab Composite Index (Rebased)
46% - Saudi Arabia 20 AZ Al Mal Equity Fund
28% - United Arab Emirates
18
11% - Qatar
16
7% - Cash
14
6% - 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 Jan-23
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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.

January 2023 NAV Per Unit: USD 10.88

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Al Mal MENA Equity Fact Sheet

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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 international markets had a good start to the year with S&P 500 rising by 6% and the tech-heavy Nasdaq Composite soaring by almost 11% in January 2023, the Nasdaq’s best month since July. Stocks moved higher as investors wait for a likely interest rate hike announcement from the Fed and press conference from Fed Chair Jerome Powell, along with the latest job openings which will show whether demand for workers remains high. Stocks have rallied this month due to hopes that inflation pressures are starting to abate. That should allow the Fed to issue smaller rate increases – and possibly even pause them later this year. Still, we believe a recession is likely to begin at some point later this year or in early 2024. Other experts argue that the Fed is likely to keep raising rates until it is certain inflation is no longer a problem.

Fund Performance

			Fund Performance
	Performance1	Fund	Benchmark2	Alpha
	1 Month	3.2%	2.7%	0.5%
	YTD3 1 Year 3 Year	3.2% -2.9% 38.1%	2.7% -11.1% 18.8%	0.5% 8.2% 19.3%
	5 Year	48.2%	33.3%	14.9%
	Since Inc.	37.4%	-21.5%	58.9%

The GCC market showed mixed trends in Jan-2023 as Saudi market recorded a strong growth of 3% while the UAE market came under selling pressure and pressure as the Abu Dhabi Index resulted in decline of 3.9% while the Dubai market index recorded a decline of 1% in the first month of 2023.

• 1 Performance is net of fees; return is cumulative

2 S&P Pan Arab Composite Index

3 As of 25th January 2023

	Holding	Top 5 Holdings	% of Fund
	Saudi National Bank		6.5
	Adnoc Drilling Company		6.1
	Al Rajhi Bank Qatar Gas Transport Qatar National Bank	Fund Analysis	5.6 4.1 4.1
	Matrix4	Fund	Benchmark
	Standard Deviation	14.0%	16.0%
	Tracking Error Beta Dividend Yield 2022	5.6% 0.8 4.0%
	No. of Holdings	32

On the economic front however, the reports and outlook remain strong as oil prices are at high levels. The GCC region continues to attract foreign investments. Saudi Arabia sovereign debt rose by about SAR 52bn to SAR 990bn in 2022 or 25% of GDP but still at comfortable levels as compared to other emerging markets. UAE aims to attract more foreign direct investment (FDI) into its economy this year on the back of new government policies to support businesses and industries. In GCC, after strong growth in IPOs in 2022, the pipeline remains strong led by KSA and UAE. UAE alone has 11 IPOs estimated to be worth USD 2.2bn in the pipeline.

Going into 2023, we continue to like banks benefiting from increased interest rates. Accordingly, we invest in banks showing NIM flexibility, however with strong deposit franchises and corporate activity to grow over the cycle on a tide of economic activity stimulated by fiscal surpluses. Also, petchem prices should see a recovery on China re-opening, and GCC producers are best positioned given a very favourable cost curve. From a bottom-up perspective, secular growth stories in the region should perform well, largely insulated from recession risks and the direction of rates.

Al Mal MENA Equity Fund had a good start, and the fund was up 3.2% in Jan-2023 as compared to 2.7% growth in the benchmark S&P Pan Arab Composite Index. The fund is highly diversified both sectorally as well as geographically and the top5 position account for only 26.4% of the fund. We are currently 7% in cash as we look at opportunities in the stocks on the fund manager’s watchlist. We see value in companies with high free cash flow yields with strong dividend paying capacity, and pricing power, especially as long-term rates remain controlled.

Fund Information

	Fund Manager Fund Manager	Sherif El Haddad Faisal Hasan, CFA
	Inception Date Inception Date	15th June 2008 15th June 2008
	Fund Size Strategy Size Fund Size Strategy Size	USD 28 million USD 250 million USD 22 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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29% - Financials Subscription & RedemptionSubscription & Redemption Weekly Weekly
13% - Energy Min Subscription Min Subscription USD 250,000 USD 250,000
9% - Consumer Discretionary Bloomberg CodeBloomberg Code MALMENE BIMALMENE BI
8% - Materials Management FeeManagement Fee 1.75%1.75%
7% - Cash Benchmark IndexBenchmark Index S&P Pan Arab CompositeS&P Pan Arab Composite
7% - Consumer Staples Fund TypeFund Type Open EndedOpen Ended
6% - Utilities AdministratorAdministrator ApexApex
6% - Communication Services
CustodianCustodian Standard CharteredStandard Chartered
5% - Information Technology
5% - Industrials
3% - Health Care 24 10Y Fund Strategy Performance
2% - Real Estate 22 Al Mal MENA Equity Fund Benchmark
20
45% - Saudi Arabia
18
27% - UAE
11% - Qatar 16
7% - Cash 14
6% - Kuwait 12
2% - Bahrain 10
2% - Morocco
8
6
Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 Jan-20 Jan-21 Jan-22 Jan-23
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Geographic Allocation

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 January 2023

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NAV Per Unit: AED 1.60

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Fund Manager Commentary

Objective

The international markets had a good start to the year with S&P 500 rising by 6% and the tech-heavy Nasdaq Composite soaring by almost 11% in January 2023, the Nasdaq’s best month since July. Stocks moved higher as investors wait for a likely interest rate hike announcement from the Fed and press conference from Fed Chair Jerome Powell, along with the latest job openings which will show whether demand for workers remains high. Stocks have rallied this month due to hopes that inflation pressures are starting to abate. That should allow the Fed to issue smaller rate increases – and possibly even pause them later this year. Still, we believe a recession is likely to begin at some point later this year or in early 2024. Other experts argue that the Fed is likely to keep raising rates until it is certain inflation is no longer a problem.

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	1.9%	1.1%	0.8%
	YTD3 1 Year 3 Year	1.9% 6.6% 50.1%	1.1% 1.8% 26.7%	0.8% 4.8% 23.4%
	5 Year	41.1%	13.9%	27.2%
	Since Inc.	111.3%	-26.9%	138.2%

The local markets did not have a great start to the year and came under selling pressure as Abu Dhabi Index resulted in decline of 3.9% while Dubai market index recorded a decline of 1% in the first month of 2023. The financial sector was amongst the major decliner which dragged the markets down. Trading activity also recorded a decline in the markets as investors remained in “wait and watch” mode.

1 Performance is net of fees; return is cumulative

2 S&P Pan Arab Composite Index

3 As of 25th January 2023

Top 3 Holdings

		Top 3 Holdings
	Holding Adnoc Drilling Company		% of Fund 7.7
	Abu Dhabi Ports		7.2
	Emirates NBD		6.9
		Fund Analysis
	Matrix4	Fund	Benchmark
	Standard Deviation	16.5%	23.8%
	Tracking Error Beta Dividend Yield 2022	10.4% 0.6 4.0%
	No. of Holdings	20

However, economic outlook remains strong as the UAE aims to attract more foreign direct investment (FDI) into its economy this year on the back of new government policies to support businesses and industries. The primary market will remain active, taking over from the strong growth seen last year as UAE has 11 IPOs estimated to be worth USD 2.2bn in the pipeline.

Among the portfolio holdings, DIB reported net profit of AED1.43bn for 4Q22, +3.8% q/q and +7.2% y/y. The bank’s profit for 2022 was AED5.47bn, up 25% y/y, on higher NII and lower provisioning. ADCB’s profit is up 2% q/q . ADCB reported Q422 net profit of AED1.79bn, up 12% q/q and 24% y/y, 5% ahead of Bloomberg consensus. Another portfolio company Multiply Group has acquired 80% of International Energy Holding LLC. International Energy Holding recently acquired a 50% stake in Kalyon Enerji Yatrimlari A. Ş ., a market leading clean and renewable energy company based in Turkey. Multiply Group had recently invested AED 10 billion in a 7.3% stake in the Abu Dhabi National Energy Company (TAQA).

4 Calculated using 3-year weekly data

In the first month, despite the negative market sentiments, the fund continued its good performance as registered outperformance of 0.8% as compared to its benchmark S&P UAE Domestic 10% Capped Index. The fund is currently well diversified with financials accounting for 34% allocation and top-3 stocks account for only 21.8% of the fund portfolio. The fund is sitting on 11% cash as it looks at opportunities in the stocks on the fund manager’s watchlist.

Fund Information

	Fund Manager	Faisal Hasan, CFA
	Fund Size	AED 57 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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Sector Allocation
34% - Financials
15% - Industrials
13% - Real Estate
11% - Cash
11% - Utilities
8% - Energy
6% - Consumer Discretionary
2% - Communication Services
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10Y Fund Strategy Performance

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Al Mal UAE Equity Fund Benchmark
33
30
27
24
21
18
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 Jan-23
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Geographic Allocation

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53% - Abu Dhabi
36% - Dubai
11% - Cash
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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.