Al Murabaha Annual Fact Sheet 2016 - The Investor | For Securities
The Investor Saudi Riyal Murabaha Fund Annual report 2016
CONTENTS Investment Fund Information
3
Fund Performance
3
Fund Manager
4
Custodian
5
Auditor
5
Financial Statements
7
THE FUNDS REPORTS ARE AVAILABLE UPON REQUEST FREE OF CHARGE www.theinvestor.com.sa The Investor for Securities Company | Joint Stock Corporation | Authorized Capital SR400 million | Capital Market Authority License No. 0604737 - CR:1010249821 Kingdom of Saudi Arabia | PO. Box 67838 | Riyadh 11517 | Aljomaiah Tower 2nd floor | King Fahad Road | Tel: +966 11 2007002 | Fax: +966 11 210 2254
INVESTMENT FUND INFORMATION Fund Investment Objective The fund aims to provide capital preservation and generating reasonable return by investing in Shariah compliant instruments with a low level of risk exposure while maintaining adequate liquidity for the fund.
Fund Investment Policies 3
The fund invests in short term Murabaha (Money Market Deals) in Saudi Riyal and other GCC & Major currencies. The fund may invest in Sukuk and can invest in other funds.
Distribution of income and gain policy All profit will be re-invested in the fund, no income will be distributed to Unitholders.
FUND PERFORMANCE Comparision for the last three years Year 2016
Year 2015
Year 2014
Net Asset Value
30,337,744.86
23,741,942.61
77,740,185.41
Number of units at the end of the year
2,625,815.65
2,101,888.69
6,958,911.24
Net Asset Value Per Unit
11.5536
11.2955
11.1713
Highest Net Asset Value Per Unit during the year
11.5536
11.2955
11.1713
Lowest Net Asset Value Per Unit during the year
11.2969
11.1717
11.0713
Income Distributed during the year
-
-
-
Total Expenses
0.422%
0.790%
0.216%
Actual fees and fund expenses for 2016 Management Fee
76,222.32
0.251%
Audit Fee
20,000.00
0.066%
CMA Fee
7,500.00
0.025%
BOD Fee
12,431.69
0.041%
Tadawul Fee
5,000.00
0.016%
Total Expenses
128,154.01
0.422%
Cumulative Returns 12 Months
3 Years
5 years
Since Inception
Fund
2.41%
5.18%
8.66%
16.24%
Benchmark
2.13%
4.24%
6.25%
8.36%
Difference
0.28%
0.94%
2.40%
7.88%
The Investor for Securities Company | Joint Stock Corporation | Authorized Capital SR400 million | Capital Market Authority License No. 0604737 - CR:1010249821 Kingdom of Saudi Arabia | PO. Box 67838 | Riyadh 11517 | Aljomaiah Tower 2nd floor | King Fahad Road | Tel: +966 11 2007002 | Fax: +966 11 210 2254
Annual Returns Since Inception
4
Year on Year Performance
Year
Fund
Benchmark
2009
1.49%
0.32%
2010
3.39%
0.74%
2011
1.55%
0.70%
2012
1.78%
0.93%
1.50%
2013
1.59%
0.97%
1.00%
2014
1.40%
0.94%
2015
1.11%
0.92%
2016
2.27%
2.11%
4.00% 3.50% 3.00% 2.50% 2.00%
0.50% 0.00% 2009
2010
2011
2012
2013
2014
2015
2016
Fund
1.49%
3.39%
1.55%
1.78%
1.59%
1.40%
1.11%
2.27%
Benchmark
0.32%
0.74%
0.70%
0.93%
0.97%
0.94%
0.92%
2.11%
Disclosures There were no material changes during the period which effected the fund’s performance (other than the ones mentioned for terms and conditions). No voting rights were exercised during the year, given the nature of the Fund’s investments which are mainly in money market instruments
Fund Board The board of directors consist of the following members, who were appointed by the fund manager and approved by the Capital Market Authority: 1- Saad Falah Al Qahtani 2- Majid Al Thowaini 3- Abdul hamid Alamri 4- Riyad Alyami
(The Chairman / member) (Independent member) (Independent member) (Member)
Fund Board Meetings There were two meetings held during the year with the board during which the fund's performance was discussed. The fund board recommended that the external audit report was being delayed therefore the fund manager should look for alternatives. Considering the recommendation the Fund Manager sent out RFPs in response to which “RSM - Allied Accountants” were selected. During 2016 the fund managerwas fined for an investment in a DPM.
FUND MANAGER The Investor for Securities is the fund manager for The Investor Saudi Riyal Murabaha Fund and there is no sub-manager and/or investment advisor. The Investor for Securities Company Capital Market Authority License No. 0604737 - CR:1010249821 Kingdom of Saudi Arabia PO. Box 67838 | Riyadh 11517 Aljomaiah Tower 2nd floor | King Fahad Road | Tel: +966 11 2007002 | Fax: +966 11 210 2254.
Investment activities During the year the fund entered into various money market deals after considering multiple opportunities. Fund manager compared the indicative rates from few of the best banks in the Saudi as well as GCC markets and selected the banks based on our due diligence. With the money market rates on the higher side the fund was able to generated exceptional returns during the year.
Funds performance during the year During the year the money market rates increased and because of a well diversified portfolio held by the fund it was able to outperform the benchmark by 0.16%. The fund manager continues to strive to select the best possible investments while at the same time trying to reduce the over all costs to the fund. The auditor was changed during the year to reduce the cost which would improve the performance of the fund further. The fund manager would keep an eye on the developments in the markets to continue achieving above benchmark returns. The Investor for Securities Company | Joint Stock Corporation | Authorized Capital SR400 million | Capital Market Authority License No. 0604737 - CR:1010249821 Kingdom of Saudi Arabia | PO. Box 67838 | Riyadh 11517 | Aljomaiah Tower 2nd floor | King Fahad Road | Tel: +966 11 2007002 | Fax: +966 11 210 2254
Details of material changes In September 2016 the fund's T&Cs were amended and the following were included in the revised T&Cs which are available on the company's website: - the fund's auditor was changed to RSM - Allied Accountants. - following the revised regulations the fees and expenses of the fund were capped at 3%. - amedment in the subscription and redemption procedures and risks related to the same.
Investments in other funds 5
Amount invested in the other fund (including the accrued profit)
1,733,908.71
Proportion of total investments
6.12%
Management fee charged by the other fund
0.50%
Management fee charged by the fund manager
12% of net income not exceeding 1% of AUM
Special Commission No special commissions were received by the fund manager during 2016
CUSTODIAN The Investor for Securities is the custodian to the fund.
Custodian’s duties and responsibilities The custodian shall be responsible to the unit holders and fund manager for any losses caused to the fund due to its fraud negligence, misconduct or willful default. The custodian shall be responnsible for taking custody and protecting the fund’s assests on behalf of unitholders, and taking all necessary administrative measures in relation to the custody of the fund’s assests.
Custodian’s opinion The Investor for Securities hereby confirms that we issued, transfered and redeemed the units in accordance with the provision of the IFR and Fund T&Cs. The Investor for Securities hereby confirms that we valued and calculated the Unit price in accordance with the provisions of IFR and Fund T&Cs. The Investor for Securities hereby confirms that we have not breached any of the Investment Restrictions, Limitations and borrowing powers applocable to IFR (other than the one referred in the fund board meeting). The fund manager must appoint an independent authorized person as a custodian to take custudy of the assets of the fund before 01/04/2018.
AUDITOR 3rd Floor, Alsaif Center, King Abdullah Street, Riyadh, Saudi Arabia T:+966(11)456 2974 | Web: www.rsmksa.com
Auditor’s opnion The financial statments have been prepared and audited in accordance with SOCPA standards.
The Investor for Securities Company | Joint Stock Corporation | Authorized Capital SR400 million | Capital Market Authority License No. 0604737 - CR:1010249821 Kingdom of Saudi Arabia | PO. Box 67838 | Riyadh 11517 | Aljomaiah Tower 2nd floor | King Fahad Road | Tel: +966 11 2007002 | Fax: +966 11 210 2254
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The Investor for Securities Company | Joint Stock Corporation | Authorized Capital SR400 million | Capital Market Authority License No. 0604737 - CR:1010249821 Kingdom of Saudi Arabia | PO. Box 67838 | Riyadh 11517 | Aljomaiah Tower 2nd floor | King Fahad Road | Tel: +966 11 2007002 | Fax: +966 11 210 2254
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CONTENTS Investment Fund Information
3
Fund Performance
3
Fund Manager
4
Custodian
5
Auditor
5
Financial Statements
7
THE FUNDS REPORTS ARE AVAILABLE UPON REQUEST FREE OF CHARGE www.theinvestor.com.sa The Investor for Securities Company | Joint Stock Corporation | Authorized Capital SR400 million | Capital Market Authority License No. 0604737 - CR:1010249821 Kingdom of Saudi Arabia | PO. Box 67838 | Riyadh 11517 | Aljomaiah Tower 2nd floor | King Fahad Road | Tel: +966 11 2007002 | Fax: +966 11 210 2254
INVESTMENT FUND INFORMATION Fund Investment Objective The fund aims to provide capital preservation and generating reasonable return by investing in Shariah compliant instruments with a low level of risk exposure while maintaining adequate liquidity for the fund.
Fund Investment Policies 3
The fund invests in short term Murabaha (Money Market Deals) in Saudi Riyal and other GCC & Major currencies. The fund may invest in Sukuk and can invest in other funds.
Distribution of income and gain policy All profit will be re-invested in the fund, no income will be distributed to Unitholders.
FUND PERFORMANCE Comparision for the last three years Year 2016
Year 2015
Year 2014
Net Asset Value
30,337,744.86
23,741,942.61
77,740,185.41
Number of units at the end of the year
2,625,815.65
2,101,888.69
6,958,911.24
Net Asset Value Per Unit
11.5536
11.2955
11.1713
Highest Net Asset Value Per Unit during the year
11.5536
11.2955
11.1713
Lowest Net Asset Value Per Unit during the year
11.2969
11.1717
11.0713
Income Distributed during the year
-
-
-
Total Expenses
0.422%
0.790%
0.216%
Actual fees and fund expenses for 2016 Management Fee
76,222.32
0.251%
Audit Fee
20,000.00
0.066%
CMA Fee
7,500.00
0.025%
BOD Fee
12,431.69
0.041%
Tadawul Fee
5,000.00
0.016%
Total Expenses
128,154.01
0.422%
Cumulative Returns 12 Months
3 Years
5 years
Since Inception
Fund
2.41%
5.18%
8.66%
16.24%
Benchmark
2.13%
4.24%
6.25%
8.36%
Difference
0.28%
0.94%
2.40%
7.88%
The Investor for Securities Company | Joint Stock Corporation | Authorized Capital SR400 million | Capital Market Authority License No. 0604737 - CR:1010249821 Kingdom of Saudi Arabia | PO. Box 67838 | Riyadh 11517 | Aljomaiah Tower 2nd floor | King Fahad Road | Tel: +966 11 2007002 | Fax: +966 11 210 2254
Annual Returns Since Inception
4
Year on Year Performance
Year
Fund
Benchmark
2009
1.49%
0.32%
2010
3.39%
0.74%
2011
1.55%
0.70%
2012
1.78%
0.93%
1.50%
2013
1.59%
0.97%
1.00%
2014
1.40%
0.94%
2015
1.11%
0.92%
2016
2.27%
2.11%
4.00% 3.50% 3.00% 2.50% 2.00%
0.50% 0.00% 2009
2010
2011
2012
2013
2014
2015
2016
Fund
1.49%
3.39%
1.55%
1.78%
1.59%
1.40%
1.11%
2.27%
Benchmark
0.32%
0.74%
0.70%
0.93%
0.97%
0.94%
0.92%
2.11%
Disclosures There were no material changes during the period which effected the fund’s performance (other than the ones mentioned for terms and conditions). No voting rights were exercised during the year, given the nature of the Fund’s investments which are mainly in money market instruments
Fund Board The board of directors consist of the following members, who were appointed by the fund manager and approved by the Capital Market Authority: 1- Saad Falah Al Qahtani 2- Majid Al Thowaini 3- Abdul hamid Alamri 4- Riyad Alyami
(The Chairman / member) (Independent member) (Independent member) (Member)
Fund Board Meetings There were two meetings held during the year with the board during which the fund's performance was discussed. The fund board recommended that the external audit report was being delayed therefore the fund manager should look for alternatives. Considering the recommendation the Fund Manager sent out RFPs in response to which “RSM - Allied Accountants” were selected. During 2016 the fund managerwas fined for an investment in a DPM.
FUND MANAGER The Investor for Securities is the fund manager for The Investor Saudi Riyal Murabaha Fund and there is no sub-manager and/or investment advisor. The Investor for Securities Company Capital Market Authority License No. 0604737 - CR:1010249821 Kingdom of Saudi Arabia PO. Box 67838 | Riyadh 11517 Aljomaiah Tower 2nd floor | King Fahad Road | Tel: +966 11 2007002 | Fax: +966 11 210 2254.
Investment activities During the year the fund entered into various money market deals after considering multiple opportunities. Fund manager compared the indicative rates from few of the best banks in the Saudi as well as GCC markets and selected the banks based on our due diligence. With the money market rates on the higher side the fund was able to generated exceptional returns during the year.
Funds performance during the year During the year the money market rates increased and because of a well diversified portfolio held by the fund it was able to outperform the benchmark by 0.16%. The fund manager continues to strive to select the best possible investments while at the same time trying to reduce the over all costs to the fund. The auditor was changed during the year to reduce the cost which would improve the performance of the fund further. The fund manager would keep an eye on the developments in the markets to continue achieving above benchmark returns. The Investor for Securities Company | Joint Stock Corporation | Authorized Capital SR400 million | Capital Market Authority License No. 0604737 - CR:1010249821 Kingdom of Saudi Arabia | PO. Box 67838 | Riyadh 11517 | Aljomaiah Tower 2nd floor | King Fahad Road | Tel: +966 11 2007002 | Fax: +966 11 210 2254
Details of material changes In September 2016 the fund's T&Cs were amended and the following were included in the revised T&Cs which are available on the company's website: - the fund's auditor was changed to RSM - Allied Accountants. - following the revised regulations the fees and expenses of the fund were capped at 3%. - amedment in the subscription and redemption procedures and risks related to the same.
Investments in other funds 5
Amount invested in the other fund (including the accrued profit)
1,733,908.71
Proportion of total investments
6.12%
Management fee charged by the other fund
0.50%
Management fee charged by the fund manager
12% of net income not exceeding 1% of AUM
Special Commission No special commissions were received by the fund manager during 2016
CUSTODIAN The Investor for Securities is the custodian to the fund.
Custodian’s duties and responsibilities The custodian shall be responsible to the unit holders and fund manager for any losses caused to the fund due to its fraud negligence, misconduct or willful default. The custodian shall be responnsible for taking custody and protecting the fund’s assests on behalf of unitholders, and taking all necessary administrative measures in relation to the custody of the fund’s assests.
Custodian’s opinion The Investor for Securities hereby confirms that we issued, transfered and redeemed the units in accordance with the provision of the IFR and Fund T&Cs. The Investor for Securities hereby confirms that we valued and calculated the Unit price in accordance with the provisions of IFR and Fund T&Cs. The Investor for Securities hereby confirms that we have not breached any of the Investment Restrictions, Limitations and borrowing powers applocable to IFR (other than the one referred in the fund board meeting). The fund manager must appoint an independent authorized person as a custodian to take custudy of the assets of the fund before 01/04/2018.
AUDITOR 3rd Floor, Alsaif Center, King Abdullah Street, Riyadh, Saudi Arabia T:+966(11)456 2974 | Web: www.rsmksa.com
Auditor’s opnion The financial statments have been prepared and audited in accordance with SOCPA standards.
The Investor for Securities Company | Joint Stock Corporation | Authorized Capital SR400 million | Capital Market Authority License No. 0604737 - CR:1010249821 Kingdom of Saudi Arabia | PO. Box 67838 | Riyadh 11517 | Aljomaiah Tower 2nd floor | King Fahad Road | Tel: +966 11 2007002 | Fax: +966 11 210 2254
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The Investor for Securities Company | Joint Stock Corporation | Authorized Capital SR400 million | Capital Market Authority License No. 0604737 - CR:1010249821 Kingdom of Saudi Arabia | PO. Box 67838 | Riyadh 11517 | Aljomaiah Tower 2nd floor | King Fahad Road | Tel: +966 11 2007002 | Fax: +966 11 210 2254
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