alkhabeer saudi equity fund - Alkhabeer Capital
ALKHABEER SAUDI EQUITY FUND Investor Report, 31 December 2015
FUND CATEGORY
Equity – Open Ended
NET UNIT PRICE
SAR 1,175.5
BLOOMBERG CODE
ALKSAEQ AB
FUND OBJECTIVE To achieve long-term capital appreciation by investing in Shari’a-compliant Saudi listed companies. FUND STRATEGY To invest in Shari’a compliant Saudi listed securities with attractive valuations relative to their growth potential. Security selection is based on fundamental analysis and comprehensive due diligence, including research and analysis of the business and the industry in which the company operates, its competitive positioning and income growth potential.
SECTOR ALLOCATION 1.2% 3.3% 4.0% 4.7% 5.0% 5.0% 5.5% 6.6% 9.0% 9.2% 11.8% 11.8%
Energy & Utilities Cement Retail Real Estate Dev. Petrochemical Transport Industrial Investment Insurance Agriculture & Food Telecom & IT Banks Travel & Tourism Cash
22.8% 0%
5%
10%
15%
20%
25%
TOP FIVE HOLDINGS
FUND MANAGER’S COMMENTARY The Fund’s NAV declined by 0.54% in Q4 of 2015, outperforming the Benchmark by 4.58%. Media, Telecom and Multi Investments were the best performing sectors, outperforming the Benchmark by 167%, 9.4% and 8.0% respectively. Cement, Petrochemicals and Transport were the worst performing sectors, underperforming the Benchmark by 8.8%, 5.5% and 5.4% respectively. Mainly, the underweight in Cement and Petrochemicals along with the overweight in Industrial Investments and cash holdings attributed to the outperformance of the Fund. Brent crude prices fell 24%, during Q4, which put pressure on fiscal finances. Saudi announced a budget of SAR 840 billion, which includes a support provision of SAR 183 billion. This provision is a hedge against Brent price movements and if unutilized will result in an approximately 30% spending cut. Moreover, subsidies were almost halved on energy products to achieve fiscal targets for 2016 and tax on vacant lands was imposed in Saudi Arabia to support non-oil revenue. Globally, Yuan was devalued by 3.2% during Q4 and commodities slumped across the board. In addition, US FED increased rates by 25 bps. Hence as a result of various factors the regional stock markets remain depressed.
10%
9.0%
9%
7.8%
8% 7% 6%
5.0%
5%
4.7%
4.7%
SAVOLA
Al Tayyar
4% 3% 2% 1% 0%
Al Rajhi Bank
Saudi Telecom
SABIC
Looking ahead, we see a very challenging 2016 as the region embraces for reforms which generate a corrective phase in the medium term before delivering long term benefits. Efficiency and productivity improvements at the corporate level will be required to reap the fruits of these reforms. Therefore, stock selection would be focused on companies with robust governance, efficient operations and commitment to sustainability. FUND PERFORMANCE
FUND FACTS FUND MANAGER
Alkhabeer Capital
INCEPTION DATE
July 1, 2013
CURRENCY
Saudi Arabian Riyal (SAR)
FUND SIZE
SAR 6.01 million
BENCHMARK
S&P Saudi Shariah Index
15.8% 20% 16.3% 14.6% 15%
17.6% 9.4%
10%
3.8%
5% 0%
-0.5%
-5%
-4.8%
-10%
-5.1%
SAR 10,000
-20%
VALUATION DAY
Sunday and Tuesday of each week. When any such day is not a Business Day, the Valuation Day is the immediate following Valuation Day
-25%
DEALING DAYS
Days of Accepting Subscription / Redemption Requests
80%
CUT-OFF TIME FOR RECEIVING SUBSCRIPTION/REDEMPTION REQUESTS
Before twelve noon on the Business Day preceding the Valuation Day
SUBSCRIPTION FEE
Up to 1% of the subscription amount
MANAGEMENT FEE
1.25% per annum of the NAV
ADMINISTRATOR & CUSTODIAN FEE
Included in the Management Fee
AUDITOR
Ernst & Young
ADMINISTRATOR & CUSTODIAN
Alkhabeer Capital
-6.2%
-11.9%
-15%
MINIMUM SUBSCRIPTION
6.6%
0.7%
-14.9% 2013
2014
Q1 2015
-19.5% -19.4% Q2 Q3 Q4 2015 2015 2015
Net Fund Returns
2015
Since Inception
Benchmark Returns
70% 60% 50% 40% 30% 20% 10% Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15
0% -10%
Cum. Net Fund Returns
Cum. Benchmark Returns
ALKHABEER SAUDI EQUITY FUND Investor Report, 31 December 2015
STATISTICAL ANALYSIS 2013
2014
Q1 2015
Q2 2015
Q3 2015
Q4 2015
2015
SINCE INCEPTION
P/E
-
13.75
16.5
18.72
16.3
14.43
14.43
-
ALPHA
23.1%
21.1%
-3.1%
2.8%
-0.6%
4.6%
3.1%
23.7%
BETA
0.98
0.99
0.98
0.99
0.99
0.96
0.98
0.98
ANNUALIZED STD. DEVIATION
22.4%
25.5%
18.6%
18.9%
25.7%
19.9%
21.3%
22.0%
SHARP RATIO
1.2
0.6
0.1
0.9
-1.6
-0.1
-0.6
0.4
FOR FURTHER INFORMATION:
IMPORTANT NOTICE
ALKHABEER CAPITAL PO Box 128289, Jeddah 21362 Kingdom of Saudi Arabia Tel: +966 12 658 8888 Fax: +966 12 658 6663 CR No: 4030177445 CMA License No: 07074-37
The report is made available for informational purposes only and shall not supersede or replace the Statements of Accounts, which the latter shall prevail in case of any conflicts. The report may not be copied, reproduced, or distributed in any way or for any purpose whatsoever. The report is provided “as is” without any guarantee, representation, condition or warranty of any kind, either express, implied, or statutory by AKC, its directors, staff or affiliates. This document does not constitute an offer to buy or subscribe or participate in any way in the Fund, nor shall it (or any part of it) form the basis of or be relied on in connection with or act as inducement to enter into any contract whatsoever. This document is confidential in nature and is only intended for investors.
alkhabeer.com
If you have mistakenly received this document, you are hereby requested to disregard its contents and return it to AlKhabeer Capital or destroy it. Past performance is no guarantee of future results. The value of the units, dividends, the prices and currencies of the funds, can go down as well as up. Investors may get back less than what they originally invested. Changes in currency rates may have an adverse effect on the value, price or income of the security. For an illiquid security, it may be difficult for the investor to sell or realize the security and to obtain reliable information about its value or the extent of the risks to which it is exposed.
FUND CATEGORY
Equity – Open Ended
NET UNIT PRICE
SAR 1,175.5
BLOOMBERG CODE
ALKSAEQ AB
FUND OBJECTIVE To achieve long-term capital appreciation by investing in Shari’a-compliant Saudi listed companies. FUND STRATEGY To invest in Shari’a compliant Saudi listed securities with attractive valuations relative to their growth potential. Security selection is based on fundamental analysis and comprehensive due diligence, including research and analysis of the business and the industry in which the company operates, its competitive positioning and income growth potential.
SECTOR ALLOCATION 1.2% 3.3% 4.0% 4.7% 5.0% 5.0% 5.5% 6.6% 9.0% 9.2% 11.8% 11.8%
Energy & Utilities Cement Retail Real Estate Dev. Petrochemical Transport Industrial Investment Insurance Agriculture & Food Telecom & IT Banks Travel & Tourism Cash
22.8% 0%
5%
10%
15%
20%
25%
TOP FIVE HOLDINGS
FUND MANAGER’S COMMENTARY The Fund’s NAV declined by 0.54% in Q4 of 2015, outperforming the Benchmark by 4.58%. Media, Telecom and Multi Investments were the best performing sectors, outperforming the Benchmark by 167%, 9.4% and 8.0% respectively. Cement, Petrochemicals and Transport were the worst performing sectors, underperforming the Benchmark by 8.8%, 5.5% and 5.4% respectively. Mainly, the underweight in Cement and Petrochemicals along with the overweight in Industrial Investments and cash holdings attributed to the outperformance of the Fund. Brent crude prices fell 24%, during Q4, which put pressure on fiscal finances. Saudi announced a budget of SAR 840 billion, which includes a support provision of SAR 183 billion. This provision is a hedge against Brent price movements and if unutilized will result in an approximately 30% spending cut. Moreover, subsidies were almost halved on energy products to achieve fiscal targets for 2016 and tax on vacant lands was imposed in Saudi Arabia to support non-oil revenue. Globally, Yuan was devalued by 3.2% during Q4 and commodities slumped across the board. In addition, US FED increased rates by 25 bps. Hence as a result of various factors the regional stock markets remain depressed.
10%
9.0%
9%
7.8%
8% 7% 6%
5.0%
5%
4.7%
4.7%
SAVOLA
Al Tayyar
4% 3% 2% 1% 0%
Al Rajhi Bank
Saudi Telecom
SABIC
Looking ahead, we see a very challenging 2016 as the region embraces for reforms which generate a corrective phase in the medium term before delivering long term benefits. Efficiency and productivity improvements at the corporate level will be required to reap the fruits of these reforms. Therefore, stock selection would be focused on companies with robust governance, efficient operations and commitment to sustainability. FUND PERFORMANCE
FUND FACTS FUND MANAGER
Alkhabeer Capital
INCEPTION DATE
July 1, 2013
CURRENCY
Saudi Arabian Riyal (SAR)
FUND SIZE
SAR 6.01 million
BENCHMARK
S&P Saudi Shariah Index
15.8% 20% 16.3% 14.6% 15%
17.6% 9.4%
10%
3.8%
5% 0%
-0.5%
-5%
-4.8%
-10%
-5.1%
SAR 10,000
-20%
VALUATION DAY
Sunday and Tuesday of each week. When any such day is not a Business Day, the Valuation Day is the immediate following Valuation Day
-25%
DEALING DAYS
Days of Accepting Subscription / Redemption Requests
80%
CUT-OFF TIME FOR RECEIVING SUBSCRIPTION/REDEMPTION REQUESTS
Before twelve noon on the Business Day preceding the Valuation Day
SUBSCRIPTION FEE
Up to 1% of the subscription amount
MANAGEMENT FEE
1.25% per annum of the NAV
ADMINISTRATOR & CUSTODIAN FEE
Included in the Management Fee
AUDITOR
Ernst & Young
ADMINISTRATOR & CUSTODIAN
Alkhabeer Capital
-6.2%
-11.9%
-15%
MINIMUM SUBSCRIPTION
6.6%
0.7%
-14.9% 2013
2014
Q1 2015
-19.5% -19.4% Q2 Q3 Q4 2015 2015 2015
Net Fund Returns
2015
Since Inception
Benchmark Returns
70% 60% 50% 40% 30% 20% 10% Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15
0% -10%
Cum. Net Fund Returns
Cum. Benchmark Returns
ALKHABEER SAUDI EQUITY FUND Investor Report, 31 December 2015
STATISTICAL ANALYSIS 2013
2014
Q1 2015
Q2 2015
Q3 2015
Q4 2015
2015
SINCE INCEPTION
P/E
-
13.75
16.5
18.72
16.3
14.43
14.43
-
ALPHA
23.1%
21.1%
-3.1%
2.8%
-0.6%
4.6%
3.1%
23.7%
BETA
0.98
0.99
0.98
0.99
0.99
0.96
0.98
0.98
ANNUALIZED STD. DEVIATION
22.4%
25.5%
18.6%
18.9%
25.7%
19.9%
21.3%
22.0%
SHARP RATIO
1.2
0.6
0.1
0.9
-1.6
-0.1
-0.6
0.4
FOR FURTHER INFORMATION:
IMPORTANT NOTICE
ALKHABEER CAPITAL PO Box 128289, Jeddah 21362 Kingdom of Saudi Arabia Tel: +966 12 658 8888 Fax: +966 12 658 6663 CR No: 4030177445 CMA License No: 07074-37
The report is made available for informational purposes only and shall not supersede or replace the Statements of Accounts, which the latter shall prevail in case of any conflicts. The report may not be copied, reproduced, or distributed in any way or for any purpose whatsoever. The report is provided “as is” without any guarantee, representation, condition or warranty of any kind, either express, implied, or statutory by AKC, its directors, staff or affiliates. This document does not constitute an offer to buy or subscribe or participate in any way in the Fund, nor shall it (or any part of it) form the basis of or be relied on in connection with or act as inducement to enter into any contract whatsoever. This document is confidential in nature and is only intended for investors.
alkhabeer.com
If you have mistakenly received this document, you are hereby requested to disregard its contents and return it to AlKhabeer Capital or destroy it. Past performance is no guarantee of future results. The value of the units, dividends, the prices and currencies of the funds, can go down as well as up. Investors may get back less than what they originally invested. Changes in currency rates may have an adverse effect on the value, price or income of the security. For an illiquid security, it may be difficult for the investor to sell or realize the security and to obtain reliable information about its value or the extent of the risks to which it is exposed.
