The EFG-Hermes Saudi Arabia Equity Fund September 2014 The ...
The EFG-Hermes Saudi Arabia Equity Fund September 2014 Fund Manager’s Strategy & Outlook
Objective
The Saudi market had a limited pullback in September with the Tadawul All Share Index losing 2.3% for a YTD return of 27.2%. The Fund Manager’s Strategy & Outlook Fund lost 3.1% during the month and is now up 48.2% YTD. Turnover was slightly lower with daily traded value averaging USD 2.56 billion in The MEDA Fund added 5.1% in December to close 2007 at 50.4%, while August. its sixth consecutive year of positive returns. The Investment registering
The principal objective of the Fund is medium and long term capital appreciation through investing in Saudi Arabian equity and equity related securities.
Manager’s decision to overweight the GCC markets at the start of the year Saudi Arabian Monetary Agencyof(SAMA) issued for revised regulations benefited the Fund as the majority the attribution the 2007 returns for came the GCC.lending. The MENA closed the year onimposing a strong note, banksfrom consumer Themarkets key changes included limits on with Saudi market the way for the the right second loanthe processing feesleading and giving SAMA to consecutive cap banks month consumer wtih an 18% for December. The UAE also performedeffect well on lending at itsreturn discretion. We believe this markets will have a negative with Dubai and Abu Dhabi advancing 11% and 9.5%, respectively. banks fee income, especially the ones that have significant revenue
contribution from retail banking.
In North Africa, the Egyptian market maintained its strong momentum registering an 8% return in December. The financial services sector was Elsewhere, Saudi Arabia’s purchasing manager’s index (PMI)from gained among the standout performers, and the Fund’s holdings benefited more than 1 pointthe MoM in September record a reading of 62 points, this rally. Moreover, Fund continues to to retain a minor exposure to the Jordanian and level Moroccan markets. its highest since June 2011. All the underlying data reflected
strength, with output coming at just under 70 points – its second In the GCC markets, the Saudi Arabian market a strongmore highest reading on record, and new orders at 71 displayed points – gaining performance throughout than one point MoM. the month. The rally was broad based with the banking and petrochemical sectors leading the way. Speculation about opening the market to foreign investors in the near future coupled with the All sectors were of down September excepthashotels, gradual restoration retailin investor confidence helpedinsurance, drive that and retail higher. – which 10.6%, 9.4%, and 0.5%therespectively. Banks market Thegained Investment Manager has reshuffled Fund’s positions losing 5.5%rally.while petrochemicals slightly tounderperformed capitalize on the strong two-month
outperformed losing 2.0%. The Investment Manager reduced exposure
In UAE, the real estate sector was and among the top performing tothe banks, industrial investment, petrochemicals andsectors. increased The Fund was well positioned to real benefit fromcompanies this rally and we maintain a exposure to retail, food, and estate during the month. positive view on the Dubai and Abu Dhabi markets given the attractive valuations and compelling earnings growth outlook.
Third quarter earnings will be reported in October, which will include a week-long break for Eid Al Adha holiday. Results areMENA expected to be The Investment Manager maintains a positive outlook on the markets strong and the IPO Investment Manager maintains his and positive going intooverall 2008. Increased and M&A activity, attractive valuations outlook growth on the market in the medium long term. earnings rates, coupled with the to currency revaluation possibility should be the supporting drivers for 2008. Furthermore, ongoing structural changes with respect to corporate governance should result in an increased interest from foreign institutional investors who were instrumental in driving EFG-Hermes Saudi Arabia Equity Fund Tadawul All Share Index the markets higher in 2007. 80%
Fund Performance TASI1 -2.3% 27.2% 25.5% 6.0% -3.1% 8.2% 27.5% 10.6%
Saudi Fund -3.1% 48.2% 48.8% 11.2% 1.8% 12.7% 22.4% 66.5%
Month to Date** Year to Date 2013 2012 2011 2010 2009 Inception to Date*
Difference -0.8% 21.0% 23.3% 5.2% 4.9% 4.5% -5.1% 55.9%
*Fund’s inception date was June 17th, 2008 ** MTD figures reflect performance between August 31, 2014 and 30 September, 2014 1 TASI is a price return index
Fund Characteristics No. of Holdings Weighted Market Cap Dividend Yield* P/E Ratio 15
30 SAR 73.7 billion 2.0% 12.4
*Figure reflects the weighted average yield of a dividend-bearing security in the fund
Fund Metrics Saudi Fund 22.7% 1.0
Volatility Beta *
TASI 21.8% -
**Calculated vs. the Tadawul All Share Index (TASI) since the Fund’s inception
Top Three Equity Holdings Holding SABIC Al Rajhi Bank SAMBA
Sector Petrochemical Industries Banks & Financial Services Banks & Financial Services
% of NAV 9.2% 7.8% 6.5%
Fund Data NAV per Share Management Fee Minimum Subscription Subscription / Redemption Inception Date
SAR 16.65 2% SAR 50,000 Twice Weekly June 17, 2008
60% 40%
Fund Identifiers ISIN Code Bloomberg Ticker Reuters Code
20% 0%
XC000A1W4DX3 EFGSAUD AB LP65122906
-20%
Allocation by Economic Sector
-40% -60%
EFG-Hermes Asset Management Tel: 9714-363 4047 / Fax: 9714-362 1171 e-mail : [email protected]
Aug-14
Feb-14
May-14
Nov-13
Aug-13
Feb-13
May-13
Nov-12
Aug-12
Feb-12
May-12
Nov-11
Aug-11
Feb-11
May-11
Nov-10
Aug-10
Feb-10
May-10
Nov-09
Aug-09
Feb-09
May-09
Nov-08
Aug-08
-80%
Agriculture & Food Industries 3.3%
Building & Construction 1.1%
Real Estate Development 6.2%
Insurance 2.5% Banks & Financial Services 28.8%
Hotel & Tourism 1.8% Industrial Investment 5.3% Transport 2.1% Telecom 8.1% Retail 15.2%
Cash 1.0%
Cement 3.5%
Petrochemical Industries 21.1%
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 Saudi Arabia 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.
Objective
The Saudi market had a limited pullback in September with the Tadawul All Share Index losing 2.3% for a YTD return of 27.2%. The Fund Manager’s Strategy & Outlook Fund lost 3.1% during the month and is now up 48.2% YTD. Turnover was slightly lower with daily traded value averaging USD 2.56 billion in The MEDA Fund added 5.1% in December to close 2007 at 50.4%, while August. its sixth consecutive year of positive returns. The Investment registering
The principal objective of the Fund is medium and long term capital appreciation through investing in Saudi Arabian equity and equity related securities.
Manager’s decision to overweight the GCC markets at the start of the year Saudi Arabian Monetary Agencyof(SAMA) issued for revised regulations benefited the Fund as the majority the attribution the 2007 returns for came the GCC.lending. The MENA closed the year onimposing a strong note, banksfrom consumer Themarkets key changes included limits on with Saudi market the way for the the right second loanthe processing feesleading and giving SAMA to consecutive cap banks month consumer wtih an 18% for December. The UAE also performedeffect well on lending at itsreturn discretion. We believe this markets will have a negative with Dubai and Abu Dhabi advancing 11% and 9.5%, respectively. banks fee income, especially the ones that have significant revenue
contribution from retail banking.
In North Africa, the Egyptian market maintained its strong momentum registering an 8% return in December. The financial services sector was Elsewhere, Saudi Arabia’s purchasing manager’s index (PMI)from gained among the standout performers, and the Fund’s holdings benefited more than 1 pointthe MoM in September record a reading of 62 points, this rally. Moreover, Fund continues to to retain a minor exposure to the Jordanian and level Moroccan markets. its highest since June 2011. All the underlying data reflected
strength, with output coming at just under 70 points – its second In the GCC markets, the Saudi Arabian market a strongmore highest reading on record, and new orders at 71 displayed points – gaining performance throughout than one point MoM. the month. The rally was broad based with the banking and petrochemical sectors leading the way. Speculation about opening the market to foreign investors in the near future coupled with the All sectors were of down September excepthashotels, gradual restoration retailin investor confidence helpedinsurance, drive that and retail higher. – which 10.6%, 9.4%, and 0.5%therespectively. Banks market Thegained Investment Manager has reshuffled Fund’s positions losing 5.5%rally.while petrochemicals slightly tounderperformed capitalize on the strong two-month
outperformed losing 2.0%. The Investment Manager reduced exposure
In UAE, the real estate sector was and among the top performing tothe banks, industrial investment, petrochemicals andsectors. increased The Fund was well positioned to real benefit fromcompanies this rally and we maintain a exposure to retail, food, and estate during the month. positive view on the Dubai and Abu Dhabi markets given the attractive valuations and compelling earnings growth outlook.
Third quarter earnings will be reported in October, which will include a week-long break for Eid Al Adha holiday. Results areMENA expected to be The Investment Manager maintains a positive outlook on the markets strong and the IPO Investment Manager maintains his and positive going intooverall 2008. Increased and M&A activity, attractive valuations outlook growth on the market in the medium long term. earnings rates, coupled with the to currency revaluation possibility should be the supporting drivers for 2008. Furthermore, ongoing structural changes with respect to corporate governance should result in an increased interest from foreign institutional investors who were instrumental in driving EFG-Hermes Saudi Arabia Equity Fund Tadawul All Share Index the markets higher in 2007. 80%
Fund Performance TASI1 -2.3% 27.2% 25.5% 6.0% -3.1% 8.2% 27.5% 10.6%
Saudi Fund -3.1% 48.2% 48.8% 11.2% 1.8% 12.7% 22.4% 66.5%
Month to Date** Year to Date 2013 2012 2011 2010 2009 Inception to Date*
Difference -0.8% 21.0% 23.3% 5.2% 4.9% 4.5% -5.1% 55.9%
*Fund’s inception date was June 17th, 2008 ** MTD figures reflect performance between August 31, 2014 and 30 September, 2014 1 TASI is a price return index
Fund Characteristics No. of Holdings Weighted Market Cap Dividend Yield* P/E Ratio 15
30 SAR 73.7 billion 2.0% 12.4
*Figure reflects the weighted average yield of a dividend-bearing security in the fund
Fund Metrics Saudi Fund 22.7% 1.0
Volatility Beta *
TASI 21.8% -
**Calculated vs. the Tadawul All Share Index (TASI) since the Fund’s inception
Top Three Equity Holdings Holding SABIC Al Rajhi Bank SAMBA
Sector Petrochemical Industries Banks & Financial Services Banks & Financial Services
% of NAV 9.2% 7.8% 6.5%
Fund Data NAV per Share Management Fee Minimum Subscription Subscription / Redemption Inception Date
SAR 16.65 2% SAR 50,000 Twice Weekly June 17, 2008
60% 40%
Fund Identifiers ISIN Code Bloomberg Ticker Reuters Code
20% 0%
XC000A1W4DX3 EFGSAUD AB LP65122906
-20%
Allocation by Economic Sector
-40% -60%
EFG-Hermes Asset Management Tel: 9714-363 4047 / Fax: 9714-362 1171 e-mail : [email protected]
Aug-14
Feb-14
May-14
Nov-13
Aug-13
Feb-13
May-13
Nov-12
Aug-12
Feb-12
May-12
Nov-11
Aug-11
Feb-11
May-11
Nov-10
Aug-10
Feb-10
May-10
Nov-09
Aug-09
Feb-09
May-09
Nov-08
Aug-08
-80%
Agriculture & Food Industries 3.3%
Building & Construction 1.1%
Real Estate Development 6.2%
Insurance 2.5% Banks & Financial Services 28.8%
Hotel & Tourism 1.8% Industrial Investment 5.3% Transport 2.1% Telecom 8.1% Retail 15.2%
Cash 1.0%
Cement 3.5%
Petrochemical Industries 21.1%
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 Saudi Arabia 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.
