Fund Manager's Strategy & Outlook - EFG Hermes
EFG-Hermes “Hasaad” Freestyle Saudi Equity Fund August 2016
Fund Manager’s Strategy & Outlook
Objective
The Saudi market resumed its drop in July with the S&P Saudi Sharia TR
The principal objective of the Fund is medium to long term capital appreciation by investing in Sharia compliant equities listed on the Tadawul exchange.
efg.Fund Manager’s Strategy & Outlook
Index losing 2.3% for a YTD loss of 4.9%. The Fund lost 3.3% during the MEDA monthFund and added is now5.1% downin 8.7% YTD.toTurnover fellatfurther The December close 2007 50.4%, MoM while with registering its sixth consecutive year of positive returns. The Investment daily traded value averaging SAR 2.9 billion as the summer period has Manager’s decision to overweight the GCC markets at the start of the year benefited theseen Fundslower as the activity. majority of the attribution for the 2007 returns historically came from the GCC. The MENA markets closed the year on a strong note, with Saudi market leading way for theguidelines second consecutive wtih and Thethe market regulator hastheapproved on bookmonth building an 18% return for December. The UAE markets also performed well with allocation for Dhabi IPOs advancing which will11% become effective at the start of 2017. The Dubai and Abu and 9.5%, respectively. new regulation also gives foreign investors access to IPOs.
The
In North Africa, the Egyptian market maintained its strong momentum regulator an also8% stated the marketThe is on courseservices to joinsector the MSCI registering returnthat in December. financial was EM among the standout performers, and the Fund’s holdings benefited from this Index in 2018. This is a positive, but we still remain cautious on sectors rally. Moreover, the Fund continues to retain a minor exposure to the Jordanian and Moroccan markets. with exposure to the government and government spending.
In the GCC markets, the Saudi Arabian market displayed a strong All TASI sectors were down in August, except for multi-investment, performance throughout the month. The rally was broad based with the banking and petrochemical sectors leading the way. Speculation about and petrochemicals and energy/ utilities which gained 1.0%, 1.2% opening the market to foreign investors in the near future coupled with the 2.5%, restoration respectively. Media, Insurance, cement were gradual of retail investor confidenceand has helped drive thatamong market the higher. The Investment Manager has reshuffled the Fund’s positions to worst performing sectors losing 17.4%, 9.4%, and 8%, respectively. capitalize on the strong two-month rally.
Banks outperformed losing 3.4%.
Fund Performance Hasaad -3.3% -8.7% -13.3% -21.1%
Month to Date* YTD 2015 Inception to Date**
1
Difference 2 -1.0% -3.8% -1.7% 6.0%
* MTD figures reflect performance between July 31, 2016 and August 31, 2016 **Fund’s inception date was July 1, 2015 1 S&P Saudi Sharia TR Index 2 For comparative purposes only; the fund is managed on an absolute return basis
Fund Characteristics No. of Holdings Weighted Market Cap Dividend Yield* P/E Ratio 16
20 SAR 57.2 billion 5.6% 12.4
*Figure reflects the weighted average yield of a dividend-bearing security in the fund
Fund Metrics Hasaad 16.3% 0.65
Volatility Beta *
S&P TR 23.7% -
**Calculated vs. the S&P Saudi Sharia TR Index since the Fund’s inception
The Investment Manager increased
In the UAE,tothe estate sector was sector among and the top performing sectors. exposure thereal Food & Agriculture decreased cash to 36.9% The Fund was well positioned to benefit from this rally and we maintain a at month end. positive view on the Dubai and Abu Dhabi markets given the attractive valuations and compelling earnings growth outlook.
Brent gained 10.8% in August to end the month at USD 47.04/barrel.
The Investment Manager maintains a positive outlook on the MENA markets Saudiinto Arabia Russia IPO agreed to cooperate in the oilvaluations markets.and There going 2008.and Increased and M&A activity, attractive earnings growth rates, coupled with the currency revaluation possibility was no action plan or decision on output cuts, but the fact that these should be the supporting drivers for 2008. Furthermore, ongoing structural changes with respect to corporate governance should result in an increased two countries are willing to negotiate / cooperate, provides a floor to oil interest from foreign institutional investors who were instrumental in driving prices in the short the markets higher in term. 2007.
Top Three Equity Holdings Holding Saudi Basic Industries Al Rajhi bank Saudi Telecom Co
implementation of the NTP 2020 and upcoming budget, the Investment Manager maintains his cautious view on the market in the short term.
EFG-Hermes Asset Management Tel: 966 11 293 8048/9 Fax: 966 11 293 8032 e-mail : [email protected]
% of NAV 7.8% 7.0% 5.6%
Fund Data 7.8859 1.25% SAR 10,000 Twice Weekly July 1st,2015
Fund Identifiers ISIN Code Bloomberg Ticker Reuters Code
XC000A14XYV2 EFGHFSE AB Equity LP 68330160
Allocation by Economic Sector
S&P Saudi Sharia TR Index SPSHSART
25% 15% 5% -5% -15% -25% -35% -45%
Sector Petrochemical Industries Banks & Financial Services Telecom & IT
NAV per Share Management Fee Minimum Subscription Subscription / Redemption Inception Date
With weak third quarter results expected, oil prices volatility, the
Hasaad Fund
S&P TR -2.3% -4.9% -11.6% -27.1%
Telecom & IT 5.6% Retail 15.4%
Transport 2.9%
Agriculture & Food Industries 4.1% Banks & Financial Services 10.4%
Petrochemical Industries 12.2%
Cash 36.9%
Insurance 2.5% Hotel & Tourism 4.2%
Energy & Utilities 1.3%
Cement 4.5%
This update does not constitute an offer of shares and should not be relied upon by any person acquiring or otherwise dealing in shares of the company. Subscription of shares in the company may only currently be made on the terms of the Information Memorandum of the company. It should be noted that investment in the fund is only suitable for sophisticated investors who are aware of the risks of investing in the EFG-Hermes “Hasaad” Freestyle Saudi Equity Fund and should be regarded as long term. Please remember that past performance is not necessarily a guide to the future. Market and currency movements may cause the value of shares and the income from them to fluctuate and you may get back less than you invested when you decide to sell your share.
Fund Manager’s Strategy & Outlook
Objective
The Saudi market resumed its drop in July with the S&P Saudi Sharia TR
The principal objective of the Fund is medium to long term capital appreciation by investing in Sharia compliant equities listed on the Tadawul exchange.
efg.Fund Manager’s Strategy & Outlook
Index losing 2.3% for a YTD loss of 4.9%. The Fund lost 3.3% during the MEDA monthFund and added is now5.1% downin 8.7% YTD.toTurnover fellatfurther The December close 2007 50.4%, MoM while with registering its sixth consecutive year of positive returns. The Investment daily traded value averaging SAR 2.9 billion as the summer period has Manager’s decision to overweight the GCC markets at the start of the year benefited theseen Fundslower as the activity. majority of the attribution for the 2007 returns historically came from the GCC. The MENA markets closed the year on a strong note, with Saudi market leading way for theguidelines second consecutive wtih and Thethe market regulator hastheapproved on bookmonth building an 18% return for December. The UAE markets also performed well with allocation for Dhabi IPOs advancing which will11% become effective at the start of 2017. The Dubai and Abu and 9.5%, respectively. new regulation also gives foreign investors access to IPOs.
The
In North Africa, the Egyptian market maintained its strong momentum regulator an also8% stated the marketThe is on courseservices to joinsector the MSCI registering returnthat in December. financial was EM among the standout performers, and the Fund’s holdings benefited from this Index in 2018. This is a positive, but we still remain cautious on sectors rally. Moreover, the Fund continues to retain a minor exposure to the Jordanian and Moroccan markets. with exposure to the government and government spending.
In the GCC markets, the Saudi Arabian market displayed a strong All TASI sectors were down in August, except for multi-investment, performance throughout the month. The rally was broad based with the banking and petrochemical sectors leading the way. Speculation about and petrochemicals and energy/ utilities which gained 1.0%, 1.2% opening the market to foreign investors in the near future coupled with the 2.5%, restoration respectively. Media, Insurance, cement were gradual of retail investor confidenceand has helped drive thatamong market the higher. The Investment Manager has reshuffled the Fund’s positions to worst performing sectors losing 17.4%, 9.4%, and 8%, respectively. capitalize on the strong two-month rally.
Banks outperformed losing 3.4%.
Fund Performance Hasaad -3.3% -8.7% -13.3% -21.1%
Month to Date* YTD 2015 Inception to Date**
1
Difference 2 -1.0% -3.8% -1.7% 6.0%
* MTD figures reflect performance between July 31, 2016 and August 31, 2016 **Fund’s inception date was July 1, 2015 1 S&P Saudi Sharia TR Index 2 For comparative purposes only; the fund is managed on an absolute return basis
Fund Characteristics No. of Holdings Weighted Market Cap Dividend Yield* P/E Ratio 16
20 SAR 57.2 billion 5.6% 12.4
*Figure reflects the weighted average yield of a dividend-bearing security in the fund
Fund Metrics Hasaad 16.3% 0.65
Volatility Beta *
S&P TR 23.7% -
**Calculated vs. the S&P Saudi Sharia TR Index since the Fund’s inception
The Investment Manager increased
In the UAE,tothe estate sector was sector among and the top performing sectors. exposure thereal Food & Agriculture decreased cash to 36.9% The Fund was well positioned to benefit from this rally and we maintain a at month end. positive view on the Dubai and Abu Dhabi markets given the attractive valuations and compelling earnings growth outlook.
Brent gained 10.8% in August to end the month at USD 47.04/barrel.
The Investment Manager maintains a positive outlook on the MENA markets Saudiinto Arabia Russia IPO agreed to cooperate in the oilvaluations markets.and There going 2008.and Increased and M&A activity, attractive earnings growth rates, coupled with the currency revaluation possibility was no action plan or decision on output cuts, but the fact that these should be the supporting drivers for 2008. Furthermore, ongoing structural changes with respect to corporate governance should result in an increased two countries are willing to negotiate / cooperate, provides a floor to oil interest from foreign institutional investors who were instrumental in driving prices in the short the markets higher in term. 2007.
Top Three Equity Holdings Holding Saudi Basic Industries Al Rajhi bank Saudi Telecom Co
implementation of the NTP 2020 and upcoming budget, the Investment Manager maintains his cautious view on the market in the short term.
EFG-Hermes Asset Management Tel: 966 11 293 8048/9 Fax: 966 11 293 8032 e-mail : [email protected]
% of NAV 7.8% 7.0% 5.6%
Fund Data 7.8859 1.25% SAR 10,000 Twice Weekly July 1st,2015
Fund Identifiers ISIN Code Bloomberg Ticker Reuters Code
XC000A14XYV2 EFGHFSE AB Equity LP 68330160
Allocation by Economic Sector
S&P Saudi Sharia TR Index SPSHSART
25% 15% 5% -5% -15% -25% -35% -45%
Sector Petrochemical Industries Banks & Financial Services Telecom & IT
NAV per Share Management Fee Minimum Subscription Subscription / Redemption Inception Date
With weak third quarter results expected, oil prices volatility, the
Hasaad Fund
S&P TR -2.3% -4.9% -11.6% -27.1%
Telecom & IT 5.6% Retail 15.4%
Transport 2.9%
Agriculture & Food Industries 4.1% Banks & Financial Services 10.4%
Petrochemical Industries 12.2%
Cash 36.9%
Insurance 2.5% Hotel & Tourism 4.2%
Energy & Utilities 1.3%
Cement 4.5%
This update does not constitute an offer of shares and should not be relied upon by any person acquiring or otherwise dealing in shares of the company. Subscription of shares in the company may only currently be made on the terms of the Information Memorandum of the company. It should be noted that investment in the fund is only suitable for sophisticated investors who are aware of the risks of investing in the EFG-Hermes “Hasaad” Freestyle Saudi Equity Fund and should be regarded as long term. Please remember that past performance is not necessarily a guide to the future. Market and currency movements may cause the value of shares and the income from them to fluctuate and you may get back less than you invested when you decide to sell your share.
