alkhabeer saudi equity fund - Alkhabeer Capital
ALKHABEER SAUDI EQUITY FUND Investor Report, 30 June 2016
FUND OBJECTIVE To achieve long-term capital appreciation by investing in Shari’a-compliant Saudi listed companies. FUND STRATEGY
14.3% 17.0% 19.5% 0%
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.
5%
10%
15%
20%
25%
TOP FIVE HOLDINGS 16%
13.9%
14%
11.1%
12%
FUND MANAGER’S COMMENTARY
10% 8%
The Fund increased by 6.68% in Q2 2016, underperforming the Benchmark by 2.62%. Energy & Utilities, Insurance and Industrial Investments were the best performing sectors, outperforming the Benchmark by 17%, 14% and 10%, respectively. Media, Investments and Telecom were the worst performing sectors, underperforming by 15%, 11% and 10%, respectively. Being underweight in Energy and Industrial sectors and having a high cash allocation and overweight in Hotels attributed to the Fund’s underperformance.
4.0%
3.7%
Saudi Telecom
Herfy
Ma'aden
2% 0%
Al Rajhi Bank
SABIC
FUND PERFORMANCE 20% 14.6% 15.8% 16.3% 13.2% 15% 9.3% 10% 6.7% 5% 0% -5% -4.8% -10% -6.1% -9.7% -8.3% -15% -11.9% -14.9% -20% -25% Since Inception Benchmark Returns
Net Fund Returns
80% 70% 60% 50% 40% 30% 20% 10% 0% -10% -20% -30%
Cum. Net Fund Returns
Q2 2016
Mar-16
Q1 2016
Dec-15
2015
Sep-15
2014
Jun-15
2013
Mar-15
Looking ahead, we see a mixed Q3 2016 as summer vacations in KSA will have a significant impact on business activity. At the same time, the Hajj season gives a boost to the retail sector along with food companies. The aftermath of Brexit makes Q3 a challenging phase in terms of orientation for global growth. However, the increase in non-oil exports and expected sovereign debt capital inflows (USD 15 billion) are providing the much needed breather in domestic markets. Oil markets, which are the key to domestic revenue, are depicting a challenging scenario where demand supply rebalancing outlook is not getting clear. We believe in a cautious approach with actively seeking value stocks based on our fundamental analysis.
4.3%
4%
Dec-14
Brent crude prices increased by 25% during Q2 2016, which was mainly driven by the unexpected demand growth in emerging economies due to low oil prices. Globally, Brexit was the most significant event which affected the investor sentiment negatively although its immediate domestic impact is considered minimal. Saudi inflation edged down during the quarter as the impact of lower energy prices was absorbed in Q1 2016. The focus was on reform as the government launched Vision 2030 and National Action Plan 2020. Within Real Estate sector, the government launched projects valued at USD 1.2 billion, imposed tax on undeveloped land and strived to improve transparency in the sector. Simultaneously, CMA initiated the process of amending QFI Rules and also allowed foreign participation in listed debt instruments. The non-oil growth during Q2 2016 surged along with the private sector credit and the foreign investment that supported the TASI move-up.
6%
Jun-14
ALKSAEQ AB
Sep-14
BLOOMBERG CODE
2.0% 2.7% 3.7% 4.7% 4.8% 5.4% 7.3% 9.3% 9.3%
Insurance Transport Industrial Investment Retail Cement Hotel & Tourism Telecom & IT Agriculture & Food Real Estate Dev. Petrochemical Banks Cash
Mar-14
SAR 1,132.3
Dec-13
NET UNIT PRICE
SECTOR ALLOCATION
Sep-13
Equity – Open Ended
Jul-13
FUND CATEGORY
Cum. Benchmark Returns
FUND FACTS FUND MANAGER
Alkhabeer Capital
INCEPTION DATE
July 1, 2013
CURRENCY
Saudi Arabian Riyal (SAR)
FUND SIZE
SAR 5.38 million
BENCHMARK
S&P Saudi Shariah Index
MINIMUM SUBSCRIPTION
SAR 10,000
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
DEALING DAYS
Days of Accepting Subscription / Redemption Requests
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. This fee will be exclusive 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
ALKHABEER SAUDI EQUITY FUND Investor Report, 30 June 2016
STATISTICAL ANALYSIS 2013
2014
2015
Q1 2016
Q2 2016
SINCE INCEPTION
P/E
-
13.75
14.43
12.53
15.25
-
ALPHA
23.1%
21.1%
3.1%
13.5%
-2.6%
19.2%
BETA
0.98
0.99
0.98
0.54
0.97
0.98
ANNUALIZED STD. DEVIATION
22.4%
25.5%
21.3%
29.2%
12.2%
22.1%
SHARP RATIO
1.2
0.6
-0.6
-0.7
1.0
0.3
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 OBJECTIVE To achieve long-term capital appreciation by investing in Shari’a-compliant Saudi listed companies. FUND STRATEGY
14.3% 17.0% 19.5% 0%
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.
5%
10%
15%
20%
25%
TOP FIVE HOLDINGS 16%
13.9%
14%
11.1%
12%
FUND MANAGER’S COMMENTARY
10% 8%
The Fund increased by 6.68% in Q2 2016, underperforming the Benchmark by 2.62%. Energy & Utilities, Insurance and Industrial Investments were the best performing sectors, outperforming the Benchmark by 17%, 14% and 10%, respectively. Media, Investments and Telecom were the worst performing sectors, underperforming by 15%, 11% and 10%, respectively. Being underweight in Energy and Industrial sectors and having a high cash allocation and overweight in Hotels attributed to the Fund’s underperformance.
4.0%
3.7%
Saudi Telecom
Herfy
Ma'aden
2% 0%
Al Rajhi Bank
SABIC
FUND PERFORMANCE 20% 14.6% 15.8% 16.3% 13.2% 15% 9.3% 10% 6.7% 5% 0% -5% -4.8% -10% -6.1% -9.7% -8.3% -15% -11.9% -14.9% -20% -25% Since Inception Benchmark Returns
Net Fund Returns
80% 70% 60% 50% 40% 30% 20% 10% 0% -10% -20% -30%
Cum. Net Fund Returns
Q2 2016
Mar-16
Q1 2016
Dec-15
2015
Sep-15
2014
Jun-15
2013
Mar-15
Looking ahead, we see a mixed Q3 2016 as summer vacations in KSA will have a significant impact on business activity. At the same time, the Hajj season gives a boost to the retail sector along with food companies. The aftermath of Brexit makes Q3 a challenging phase in terms of orientation for global growth. However, the increase in non-oil exports and expected sovereign debt capital inflows (USD 15 billion) are providing the much needed breather in domestic markets. Oil markets, which are the key to domestic revenue, are depicting a challenging scenario where demand supply rebalancing outlook is not getting clear. We believe in a cautious approach with actively seeking value stocks based on our fundamental analysis.
4.3%
4%
Dec-14
Brent crude prices increased by 25% during Q2 2016, which was mainly driven by the unexpected demand growth in emerging economies due to low oil prices. Globally, Brexit was the most significant event which affected the investor sentiment negatively although its immediate domestic impact is considered minimal. Saudi inflation edged down during the quarter as the impact of lower energy prices was absorbed in Q1 2016. The focus was on reform as the government launched Vision 2030 and National Action Plan 2020. Within Real Estate sector, the government launched projects valued at USD 1.2 billion, imposed tax on undeveloped land and strived to improve transparency in the sector. Simultaneously, CMA initiated the process of amending QFI Rules and also allowed foreign participation in listed debt instruments. The non-oil growth during Q2 2016 surged along with the private sector credit and the foreign investment that supported the TASI move-up.
6%
Jun-14
ALKSAEQ AB
Sep-14
BLOOMBERG CODE
2.0% 2.7% 3.7% 4.7% 4.8% 5.4% 7.3% 9.3% 9.3%
Insurance Transport Industrial Investment Retail Cement Hotel & Tourism Telecom & IT Agriculture & Food Real Estate Dev. Petrochemical Banks Cash
Mar-14
SAR 1,132.3
Dec-13
NET UNIT PRICE
SECTOR ALLOCATION
Sep-13
Equity – Open Ended
Jul-13
FUND CATEGORY
Cum. Benchmark Returns
FUND FACTS FUND MANAGER
Alkhabeer Capital
INCEPTION DATE
July 1, 2013
CURRENCY
Saudi Arabian Riyal (SAR)
FUND SIZE
SAR 5.38 million
BENCHMARK
S&P Saudi Shariah Index
MINIMUM SUBSCRIPTION
SAR 10,000
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
DEALING DAYS
Days of Accepting Subscription / Redemption Requests
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. This fee will be exclusive 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
ALKHABEER SAUDI EQUITY FUND Investor Report, 30 June 2016
STATISTICAL ANALYSIS 2013
2014
2015
Q1 2016
Q2 2016
SINCE INCEPTION
P/E
-
13.75
14.43
12.53
15.25
-
ALPHA
23.1%
21.1%
3.1%
13.5%
-2.6%
19.2%
BETA
0.98
0.99
0.98
0.54
0.97
0.98
ANNUALIZED STD. DEVIATION
22.4%
25.5%
21.3%
29.2%
12.2%
22.1%
SHARP RATIO
1.2
0.6
-0.6
-0.7
1.0
0.3
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.
