Sico flagship fund posts 204pc return
Manama, June 12, 2014
Securities and Investment Company (Sico), a Bahrain-based regional investment bank, yesterday announced its Khaleej Equity Fund has achieved a return of 203.9 per cent since its inception 10 years ago.
The Sico flagship fund outperformed its benchmark, the S&P GCC Composite Index, for the past seven consecutive years, with the index delivering returns of 77.4 per cent, reported the Gulf Daily News, our sister publication.
The fund seeks long-term capital appreciation by investing principally in equity securities listed on GCC stock markets.
Its annualised return over the past 10 years has been 11.7 per cent versus 5.9 per cent by the index, and it has consistently ranked in the top quartile of its peers.
At the end of its first 10-year period, the fund posted its highest-ever net asset value of $303.89.
Saudi Arabia and the UAE comprised 70 per cent of the fund's allocation to GCC countries.
Sico asset management head Shakeel Sarwar said he expected the positive momentum in GCC markets to remain intact for the rest of the year.
"As measured by the S&P GCC Index, (NAV) Gulf markets have increased 15 per cent during the first five months, compared with 25 per cent for the whole of last year," Sarwar said.
"Although we believe that valuations of small and mid-cap companies in the region are stretched, we expect further upside potential among the large blue chip names, particularly in the UAE and Saudi Arabia.
"The UAE real estate market is experiencing a resurgence due to increased tourist arrivals and fund flows from regional economies such as India, Pakistan and Egypt.
"UAE banks and large real estate developers such as Emaar stand to benefit from this trend. Earnings of companies listed in Saudi Arabia will be driven primarily by government spending and increased personal consumption," he added.
"The Saudi government embarked upon an aggressive 10-year spending programme five years ago and, with oil prices currently at elevated levels, we expect government spending to remain healthy.
"Increased personal consumption in Saudi Arabia is driven by favourable demographics and initiatives taken by the kingdom to increase employment of Saudi nationals," Sarwar added.
Rated regularly since 2007 by leading international agencies, the Khaleej Equity Fund has achieved the highest ratings in the region.
It has also been recognised by numerous industry awards including prestigious Lipper Awards in 2008 and 2011.
The fund has also been cited by industry analysts for its stylistic consistency adapted as part of a disciplined investment process, supported by a strong and stable management team, robust risk monitoring procedures, positive returns symmetry, and above-average information ratio.
"The proven track record of the Khaleej Equity Fund results from Sico's unique conservative asset allocation and prudent bottom-up stock picking, which focusses on the long-term potential of underlying equities rather than on short-term momentum-driven rallies," Sico chief executive Najla Al Shirawi said.
"In addition, our regional insight, quality of research, and knowledge of investee companies are other key factors that have enabled Sico to provide consistent and stable long-term returns to our investors," she added. – TradeArabia News Service