15 January 2018

Global Saudi Equity Fund outperforms TASI and ranks among top 5 best performing funds in the Kingdom in 2017

Global Saudi Equity Fund has reported another successful year in 2017 and was ranked amongst the top 5 best performing conventional equity funds in the Saudi market and the second largest fund with assets under management of SAR 502 million (USD 134 million).

Global Saudi Equity Fund, a conventional fund launched in January 2009 with the aim to achieve long term capital growth with predefined and controlled levels of risk by investing in stocks listed on the Saudi stock exchange, has outperformed the respective benchmark Tadawul All Shares Index (“TASI”) reporting 120.8% since inception (TASI: 50.9%) and 5.8% in 2017 (TASI: 0.2%). In 2017, the fund was ranked among the top 5 best performing conventional equity funds in the Saudi market.


Bader Al-Ghanim, Chief Investment Officer at Global Saudi said: “The fund’s robust performance is attributable to the team’s research driven investment approach and vast experience in managing equities in the Saudi market. Our value-oriented investment process has proven to be successful.”


Last December, the asset management team at Global issued their outlook on the GCC equity markets for the year 2018 with a generally optimistic view ranging from slightly negative to moderately bullish across the board supported by more accommodative fiscal policies and undemanding valuations.


Husain Thaker, Senior Fund Manager at Global Saudi said: “While we were neutral to slightly positive on Saudi for the year 2017, we turned more bullish on the kingdom for the current year on the back of expansionary budget, underpinned by higher oil and non-oil revenues, and potential index inclusion by FTSE and MSCI.”


The Saudi government has taken a series of measures to alleviate the pressure resulting from the proposed reform agenda including implementation of VAT, increases to expat levies, upward revision in electricity tariffs and fuel prices. These measures include revising the fiscal framework by extending the balanced budget target date from 2020 to 2023, launching a USD19bn private sector stimulus package, introducing a cash transfer scheme to citizens, outlining a clear timeline for gradual energy subsidy reforms through to 2025, and planning debt issuance to diversify the financing source.


Al-Ghanim concluded: “With better fiscal flexibility, we expect Tadawul to lead and outperform other GCC markets supported by potential inclusion by FTSE and MSCI in their respective Emerging market indices. Given the reversal in interest rate cycle and stability in oil prices, we expect financials and petrochemicals sectors to be potential outperformers.


It is worth noting that over a 3 years and 5 years window, the Fund performance was -7.2% and 37.5% respectively compared to -13.3% and 6.3% respectively for TASI (The benchmark returns do not reflect dividends for the respective periods).

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