Al Yusr Saudi Riyal Morabaha Fund
Al Yusr Saudi Riyal Morabaha Fund Fact Sheet
Investment Policy The fund’s objective is to provide investors with a Sharia-compliant investment for steady capital appreciation with a high degree of capital preservation, superior liquidity and no foreign exchange risk. The fund invests in Morabaha (trade finance) transactions executed in accordance with Sahriah principles. Morabaha encompasses the purchase of goods and commodities from approved suppliers against immediate payment & the selling of them to reputed organizations on deferred payment terms thus generating a profit. All the profits are reinvested in the Fund, thus increasing its unit price. The large size of the fund’s collective investment ensures diversification and thus lower risk. The performance of the fund is compared to the Saudi Riyal 1-Months Interbank Bidding Rate (SIBID).
Market Overview The Saudi economy has shown more signs of recovery during the past months compared to major economies, where a potential growth during 2014-2015 is more likely to match if not exceed that of major & developed economies. In addition, the Saudi Arabian Monetary Agency’s (SAMA) Reverse Repo Rate is reasonably related to the Federal Reserve’s (Fed) Target Rate, where the later might be hiked during 2014. Generally speaking economic activity is picking up where a spike might be showing during 2015. Moreover, the Saudi economy is a rather oil-based-economy, where prices are averaging above 95$/Barrel, which feeds the potential growth. Oil is expected to remain above 85$/Barrel for quite a while & with the mortgage law regulations & legislations Banks would have a newly legalized channel. As soon as the global economy starts moving during 2014/2015 interest rates should pick up. Where signals from the Euro region recovering and the consideration of hiking interest is rather likely. The Saudi Economy has slightly suffered from the political instability in the region, where its security stood still; however, the regional instability elevated the country’s risk profile. On the other hand, Saudi is benefiting from the consequent elevated oil prices due to the political instability in the region. The main concern is the globalization effects. Investment Review Despite low market rates & excess liquidity in the banking system, Saudi Hollandi Capital’s Al-Yusr SAR Morabaha Fund posted returns outperforming its Benchmark (1Months SIBID) overall. We believe interest rates might increase during the last quarter of 2015. This will, in combination with market conditions; alter the fund’s duration & will adjust accordingly.
Fund Characteristics Date of Inception Unit Price at Inception Fund’s Base Currency Fund’s Currency of Exposure Subscription Fee Annual Management Fee Redemption Fee Minimum Initial Subscription Min Required for Additional Subscription or Redemption Price Announcement Day Cut-off Time for Subscription & Redemption Redemption Payment Period from Announcement Day Benchmark
26-Dec-2001 SAR100 Saudi Riyal Saudi Riyal 0% 0.50% 0% SAR 5,000 SAR 2,000 Every Business Day 12 Noon Every Day 1 Business Day SAR 1-month SIBID
Key Benefits • • • •
Offers the investor Shariah-compliant investment High liquidity High degree of capital preservation No foreign exchange risk
YTD 1 Year 3 Years 5 Years Since Inception 26-Dec-2001 CAGR (3 Years)
Fund 0.20% 0.89% 2.47% 3.56% 29.77% 0.82%
Benchmark* 0.11% 0.51% 1.56% 2.08% 27.70% 0.52%
Alpha 0.09% 0.38% 0.92% 1.48% 2.07% 0.30%
Asset Allocation
Cash Morabaha Deposits Sukuk Structured Deposits
Glossary Net Asset Value (NAV) Value of an investment fund unit corresponding to the market value of the fund’s assets on a set reference date, minus liabilities and divided by the number of units outstanding. Benchmark Index against which an investment fund’s performance is measured. Also called a reference index. Alpha Alpha measures the difference between a portfolio’s actual returns and its benchmark’s return. A positive alpha means the fund has outperformed its benchmark. A negative alpha means that the fund has underperformed the benchmark. CAGR The year-over-year growth rate of an investment over a specified period of time. The compound annual growth rate is calculated by taking the n th root of the total percentage growth rate, where n is the number of years in the period being considered.
Disclaimer
Investor profile • Seeking Shariah-compliant investment • Investors with low risk profile • Short to medium term investment strategy
Fund Performance vs. Benchmark* 101 100.8 100.6 100.4 100.2 100 99.8 99.6 99.4
SAR Morabaha Fund
As of 07 Apr 2015
Fund Performance
Benchmark
Saudi Hollandi Capital is an authorized person under CMA license number 07077-37. This material is for information purpose only and is not to offer or solicitation to buy or sell any security, enter into any transaction or to participate in any trading activity. This brief statement cannot disclose all the risks and other significant aspects of the markets. Mentioned Figures refer to the past. Past performance is not a reliable indicator of the future results. It should not be assumed that the methods, techniques, or indicators presented herein will be profitable or that they will not result in losses. Investing in SHC funds is not the same as placing deposit with a bank, SHC has no obligation to redeem units at the subscription value of as the underlying net asset value can go down as well as up. SHC funds may invest in equities and therefore be subject to high fluctuations in value. Each fund's performance can deviate substantially from that of its benchmark. Focusing intentionally on individual sectors may entail additional risks. Investors may get back less than he or she originally invested. Fees mentioned in the T&C will be applied. Changes in currency rates may have an adverse effect on the value, price or income of this security. To ensure proper understanding of the fund and its suitability for you according to your risk tolerance, we recommend that you seek a specialized investment advisor. More information about the fund and the risk associated with investing in them are available in the terms and conditions applicable to that fund and should be read carefully before investing. These terms and conditions can be obtained from any of SHC’s branches or SHC’s website. Slide At any time SHC or its affiliates may have 1a position in the underlying securities or provide significant advice or securities business services to the issuer of those securities.
Investment Policy The fund’s objective is to provide investors with a Sharia-compliant investment for steady capital appreciation with a high degree of capital preservation, superior liquidity and no foreign exchange risk. The fund invests in Morabaha (trade finance) transactions executed in accordance with Sahriah principles. Morabaha encompasses the purchase of goods and commodities from approved suppliers against immediate payment & the selling of them to reputed organizations on deferred payment terms thus generating a profit. All the profits are reinvested in the Fund, thus increasing its unit price. The large size of the fund’s collective investment ensures diversification and thus lower risk. The performance of the fund is compared to the Saudi Riyal 1-Months Interbank Bidding Rate (SIBID).
Market Overview The Saudi economy has shown more signs of recovery during the past months compared to major economies, where a potential growth during 2014-2015 is more likely to match if not exceed that of major & developed economies. In addition, the Saudi Arabian Monetary Agency’s (SAMA) Reverse Repo Rate is reasonably related to the Federal Reserve’s (Fed) Target Rate, where the later might be hiked during 2014. Generally speaking economic activity is picking up where a spike might be showing during 2015. Moreover, the Saudi economy is a rather oil-based-economy, where prices are averaging above 95$/Barrel, which feeds the potential growth. Oil is expected to remain above 85$/Barrel for quite a while & with the mortgage law regulations & legislations Banks would have a newly legalized channel. As soon as the global economy starts moving during 2014/2015 interest rates should pick up. Where signals from the Euro region recovering and the consideration of hiking interest is rather likely. The Saudi Economy has slightly suffered from the political instability in the region, where its security stood still; however, the regional instability elevated the country’s risk profile. On the other hand, Saudi is benefiting from the consequent elevated oil prices due to the political instability in the region. The main concern is the globalization effects. Investment Review Despite low market rates & excess liquidity in the banking system, Saudi Hollandi Capital’s Al-Yusr SAR Morabaha Fund posted returns outperforming its Benchmark (1Months SIBID) overall. We believe interest rates might increase during the last quarter of 2015. This will, in combination with market conditions; alter the fund’s duration & will adjust accordingly.
Fund Characteristics Date of Inception Unit Price at Inception Fund’s Base Currency Fund’s Currency of Exposure Subscription Fee Annual Management Fee Redemption Fee Minimum Initial Subscription Min Required for Additional Subscription or Redemption Price Announcement Day Cut-off Time for Subscription & Redemption Redemption Payment Period from Announcement Day Benchmark
26-Dec-2001 SAR100 Saudi Riyal Saudi Riyal 0% 0.50% 0% SAR 5,000 SAR 2,000 Every Business Day 12 Noon Every Day 1 Business Day SAR 1-month SIBID
Key Benefits • • • •
Offers the investor Shariah-compliant investment High liquidity High degree of capital preservation No foreign exchange risk
YTD 1 Year 3 Years 5 Years Since Inception 26-Dec-2001 CAGR (3 Years)
Fund 0.20% 0.89% 2.47% 3.56% 29.77% 0.82%
Benchmark* 0.11% 0.51% 1.56% 2.08% 27.70% 0.52%
Alpha 0.09% 0.38% 0.92% 1.48% 2.07% 0.30%
Asset Allocation
Cash Morabaha Deposits Sukuk Structured Deposits
Glossary Net Asset Value (NAV) Value of an investment fund unit corresponding to the market value of the fund’s assets on a set reference date, minus liabilities and divided by the number of units outstanding. Benchmark Index against which an investment fund’s performance is measured. Also called a reference index. Alpha Alpha measures the difference between a portfolio’s actual returns and its benchmark’s return. A positive alpha means the fund has outperformed its benchmark. A negative alpha means that the fund has underperformed the benchmark. CAGR The year-over-year growth rate of an investment over a specified period of time. The compound annual growth rate is calculated by taking the n th root of the total percentage growth rate, where n is the number of years in the period being considered.
Disclaimer
Investor profile • Seeking Shariah-compliant investment • Investors with low risk profile • Short to medium term investment strategy
Fund Performance vs. Benchmark* 101 100.8 100.6 100.4 100.2 100 99.8 99.6 99.4
SAR Morabaha Fund
As of 07 Apr 2015
Fund Performance
Benchmark
Saudi Hollandi Capital is an authorized person under CMA license number 07077-37. This material is for information purpose only and is not to offer or solicitation to buy or sell any security, enter into any transaction or to participate in any trading activity. This brief statement cannot disclose all the risks and other significant aspects of the markets. Mentioned Figures refer to the past. Past performance is not a reliable indicator of the future results. It should not be assumed that the methods, techniques, or indicators presented herein will be profitable or that they will not result in losses. Investing in SHC funds is not the same as placing deposit with a bank, SHC has no obligation to redeem units at the subscription value of as the underlying net asset value can go down as well as up. SHC funds may invest in equities and therefore be subject to high fluctuations in value. Each fund's performance can deviate substantially from that of its benchmark. Focusing intentionally on individual sectors may entail additional risks. Investors may get back less than he or she originally invested. Fees mentioned in the T&C will be applied. Changes in currency rates may have an adverse effect on the value, price or income of this security. To ensure proper understanding of the fund and its suitability for you according to your risk tolerance, we recommend that you seek a specialized investment advisor. More information about the fund and the risk associated with investing in them are available in the terms and conditions applicable to that fund and should be read carefully before investing. These terms and conditions can be obtained from any of SHC’s branches or SHC’s website. Slide At any time SHC or its affiliates may have 1a position in the underlying securities or provide significant advice or securities business services to the issuer of those securities.
