Blom Saudi Arabia Fund
Blom Saudi Arabia Fund
2016 Annual Fund Report
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Contents Investment Fund Information ................................................................................................................. 3 Fund Performance .................................................................................................................................. 4 Fund Expenses ........................................................................................................................................ 4 Fund Manager ......................................................................................................................................... 6 Custodian ................................................................................................................................................ 7 Auditor .................................................................................................................................................... 8 Financial Statements ............................................................................................................................... 8
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Investment Fund Information Fund Name Blom Saudi Arabia Fund Benchmark Tadawul all share index Investment Objectives and Policies The objective of the Fund is to generate long-term capital growth primarily through investing in equity securities listed on the Tadawul, either directly or through other funds or collective investment schemes established under the laws and regulations of Saudi Arabia with a primary focus on investments in equity securities listed on the Tadawul. The Fund will seek to mitigate risk and manage liquidity by also investing in short-term fixed income instruments and money markets funds, as well as cash and cash-equivalents. The performance of the Fund shall be measured by reference to the Tadawul index in order to supply investors with an indication of the performance of the Fund. Under normal market conditions, the Fund will comply with the following guidelines: The Fund will invest primarily in equity securities listed on the Tadawul or in units of funds or other collective investment schemes established under the laws and regulations of Saudi Arabia with a primary focus on investments in equity securities listed on the Tadawul. While the Fund Manager intends to hold 25 – 40 positions at any one time, the Fund may, at any particular time, hold a fewer or greater number of positions. The Fund will seek to mitigate risk and manage liquidity by also investing in short-term fixed income instruments, money markets funds and cash and cash-equivalents, such as time and on-demand deposit accounts. The Fund will allocate its assets among equities, fixed income and cash and cash-equivalents depending on investment opportunities, market conditions and liquidity requirements. The Fund may invest in securities issued by the Fund Manager or its affiliates organized in the KSA (if any); provided that such investments are made in accordance with the investment objective and restrictions of the Fund. Distribution of income and gain policy Dividends and/or income are reinvested in the Fund not paid our or distributed to investors. The Fund Reports are available upon request free of charge www.blom.sa
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Fund Performance 2014 33,995,154 1,585.87 1,349.272 1,945.26 21,436.256 2.23%
NAV at year-end (SAR) NAV/unit at year-end (SAR) Lowest NAV (SAR) Highest NAV(SAR) Units at year-end Distribution/ unit Expense Ratio
2015 20,244,218 1,270.15 1,212.79 1,762.90 15,938.470 2.59%
1 year
3 year
Total Return
Annual Total Return
3.68%
2011 -5.30%
2016 14,531,013 1,316.93 982.96 1,324.54 11,033.984 3.68%
5 year -1.70%
2012 7.46%
2013 31.65%
2014 18.38%
39.06%
2015 -19.91%
2016 3.68%
Fund Expenses Fee Type
Amount SAR 224,281 SAR 90,000 SAR 90,000 SAR 56,044 SAR 45,000 SAR 37,500 SAR 7,500 SAR 550,325
Management Expense Custodian Expense Administrator Expense Transaction Expense Audit Expense Fund Board Expense CMA Expense Total
The measures of performance have been consistently applied. Material changes that occurred during the period and that affected the performance of the fund No Material changes occurred during 2016 Exercise of annual voting rights The Fund Manager abstained from voting during 2016
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Pct. Of average NAV 1.50% 0.60% 0.60% 0.37% 0.30% 0.25% 0.05% 3.68%
Fund board meeting Board Resolution dated 30/08/2016 Discussion Topics a. b. c. d. e. f.
2016 performance review of the Fund Approving the financial statements (year-end 2015) Discussion of CMA findings during their audit (Jan 2016) Discussion of potential conflict of interest Review of third-party contracts Review of the Fund’s terms and conditions including financial disclosure
Resolutions a. The board recommended steps to address CMA’s findings b. The board decided there was no material conflict of interest
Board Resolution dated 01/11/2016 Discussion Topics a. b. c. d.
2016 performance review of the Fund
Approving the financial statements (semi-annual 2016) Compliance officer’s review of funds’ compliance with laws and regulations. Follow-up on CMA findings during their audit (Jan 2016)
Resolutions a. The board recommended monitoring compliance through utilizing the newly acquired IT system b. The board approved steps taken to address CMA comments
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Fund Manager Fund Manager BLOMINVEST Saudi Arabia, with its registered office at Al Oula Building, 3rd floor, King Fahad Road, Riyadh, P.O. Box 8151, Riyadh 11482, Saudi Arabia. Names and addresses of sub-manager and/or investment adviser The Fund Manager did not appoint a sub-manager or investment advisor Investment activities during the period Volatility throughout 2016 proved to be quite challenging; oil price retest of 2015 lows coupled with eventual austerity decisions and policies adopted by the government lead to a viscous cycle of liquidity tightening that dried up the system and severely affected the equity and real estate markets, SAR swap rates curve moved substantially higher in anticipation of the sharp increase in Saudi Interbank Offer Rate. In September the index revisited January Lows amid historically low average turnover. However, OPEC and the International Bond Issue coinciding in Q4 helped reverse the sentiment, and liquidity was back again bargain hunting for value. In a matter of two months, the TASI rallied a good 32% ending the year north of 7000 with a 5% year performance. Throughout the period, the fund maintained a rather elevated allocation to select Insurance names, and healthcare companies being underweight banks and chemical sector. In Q4, the fund has substantially increased allocation to hard hit sectors such as banks, cement, building & construction as well as discretionary retail. Investment fund’s performance during the period The Fund ended the year up 3.7% vs. 5% for the benchmark
Details of any material changes made during the period No material changes took place during the period Investment fund invests substantially in other investment funds The Fund did not invest in other mutual funds The Fund manager did not receive any special commission during 2016.
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Custodian Custodian HSBC Saudi Arabia Limited HSBC Building, Olaya Road, Al-Murooj l Riyadh 11413 l P.O. Box 9084, Saudi Arabia
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Auditor Auditor Ernst & Young Al Faisaliah Office Tower l King Fahad Road l P.O. Box 2732 l Riyadh 11461, Saudi Arabia
Financial Statements
8
2016 Annual Fund Report
1
Contents Investment Fund Information ................................................................................................................. 3 Fund Performance .................................................................................................................................. 4 Fund Expenses ........................................................................................................................................ 4 Fund Manager ......................................................................................................................................... 6 Custodian ................................................................................................................................................ 7 Auditor .................................................................................................................................................... 8 Financial Statements ............................................................................................................................... 8
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Investment Fund Information Fund Name Blom Saudi Arabia Fund Benchmark Tadawul all share index Investment Objectives and Policies The objective of the Fund is to generate long-term capital growth primarily through investing in equity securities listed on the Tadawul, either directly or through other funds or collective investment schemes established under the laws and regulations of Saudi Arabia with a primary focus on investments in equity securities listed on the Tadawul. The Fund will seek to mitigate risk and manage liquidity by also investing in short-term fixed income instruments and money markets funds, as well as cash and cash-equivalents. The performance of the Fund shall be measured by reference to the Tadawul index in order to supply investors with an indication of the performance of the Fund. Under normal market conditions, the Fund will comply with the following guidelines: The Fund will invest primarily in equity securities listed on the Tadawul or in units of funds or other collective investment schemes established under the laws and regulations of Saudi Arabia with a primary focus on investments in equity securities listed on the Tadawul. While the Fund Manager intends to hold 25 – 40 positions at any one time, the Fund may, at any particular time, hold a fewer or greater number of positions. The Fund will seek to mitigate risk and manage liquidity by also investing in short-term fixed income instruments, money markets funds and cash and cash-equivalents, such as time and on-demand deposit accounts. The Fund will allocate its assets among equities, fixed income and cash and cash-equivalents depending on investment opportunities, market conditions and liquidity requirements. The Fund may invest in securities issued by the Fund Manager or its affiliates organized in the KSA (if any); provided that such investments are made in accordance with the investment objective and restrictions of the Fund. Distribution of income and gain policy Dividends and/or income are reinvested in the Fund not paid our or distributed to investors. The Fund Reports are available upon request free of charge www.blom.sa
3
Fund Performance 2014 33,995,154 1,585.87 1,349.272 1,945.26 21,436.256 2.23%
NAV at year-end (SAR) NAV/unit at year-end (SAR) Lowest NAV (SAR) Highest NAV(SAR) Units at year-end Distribution/ unit Expense Ratio
2015 20,244,218 1,270.15 1,212.79 1,762.90 15,938.470 2.59%
1 year
3 year
Total Return
Annual Total Return
3.68%
2011 -5.30%
2016 14,531,013 1,316.93 982.96 1,324.54 11,033.984 3.68%
5 year -1.70%
2012 7.46%
2013 31.65%
2014 18.38%
39.06%
2015 -19.91%
2016 3.68%
Fund Expenses Fee Type
Amount SAR 224,281 SAR 90,000 SAR 90,000 SAR 56,044 SAR 45,000 SAR 37,500 SAR 7,500 SAR 550,325
Management Expense Custodian Expense Administrator Expense Transaction Expense Audit Expense Fund Board Expense CMA Expense Total
The measures of performance have been consistently applied. Material changes that occurred during the period and that affected the performance of the fund No Material changes occurred during 2016 Exercise of annual voting rights The Fund Manager abstained from voting during 2016
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Pct. Of average NAV 1.50% 0.60% 0.60% 0.37% 0.30% 0.25% 0.05% 3.68%
Fund board meeting Board Resolution dated 30/08/2016 Discussion Topics a. b. c. d. e. f.
2016 performance review of the Fund Approving the financial statements (year-end 2015) Discussion of CMA findings during their audit (Jan 2016) Discussion of potential conflict of interest Review of third-party contracts Review of the Fund’s terms and conditions including financial disclosure
Resolutions a. The board recommended steps to address CMA’s findings b. The board decided there was no material conflict of interest
Board Resolution dated 01/11/2016 Discussion Topics a. b. c. d.
2016 performance review of the Fund
Approving the financial statements (semi-annual 2016) Compliance officer’s review of funds’ compliance with laws and regulations. Follow-up on CMA findings during their audit (Jan 2016)
Resolutions a. The board recommended monitoring compliance through utilizing the newly acquired IT system b. The board approved steps taken to address CMA comments
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Fund Manager Fund Manager BLOMINVEST Saudi Arabia, with its registered office at Al Oula Building, 3rd floor, King Fahad Road, Riyadh, P.O. Box 8151, Riyadh 11482, Saudi Arabia. Names and addresses of sub-manager and/or investment adviser The Fund Manager did not appoint a sub-manager or investment advisor Investment activities during the period Volatility throughout 2016 proved to be quite challenging; oil price retest of 2015 lows coupled with eventual austerity decisions and policies adopted by the government lead to a viscous cycle of liquidity tightening that dried up the system and severely affected the equity and real estate markets, SAR swap rates curve moved substantially higher in anticipation of the sharp increase in Saudi Interbank Offer Rate. In September the index revisited January Lows amid historically low average turnover. However, OPEC and the International Bond Issue coinciding in Q4 helped reverse the sentiment, and liquidity was back again bargain hunting for value. In a matter of two months, the TASI rallied a good 32% ending the year north of 7000 with a 5% year performance. Throughout the period, the fund maintained a rather elevated allocation to select Insurance names, and healthcare companies being underweight banks and chemical sector. In Q4, the fund has substantially increased allocation to hard hit sectors such as banks, cement, building & construction as well as discretionary retail. Investment fund’s performance during the period The Fund ended the year up 3.7% vs. 5% for the benchmark
Details of any material changes made during the period No material changes took place during the period Investment fund invests substantially in other investment funds The Fund did not invest in other mutual funds The Fund manager did not receive any special commission during 2016.
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Custodian Custodian HSBC Saudi Arabia Limited HSBC Building, Olaya Road, Al-Murooj l Riyadh 11413 l P.O. Box 9084, Saudi Arabia
7
Auditor Auditor Ernst & Young Al Faisaliah Office Tower l King Fahad Road l P.O. Box 2732 l Riyadh 11461, Saudi Arabia
Financial Statements
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