Manama, Kingdom of Bahrain, 25 January 2015: Securities & Investment Company (SICO), licensed by the Central Bank of Bahrain as a conventional wholesale bank, announced today that its Fixed Income Fund outperformed its respective benchmark and peers during 2014.
In its first full year of operations, the Fund delivered a return of 8.7 per cent compared with 6.9 per cent by its benchmark, the Barclays Emerging Markets GCC Bond Index. Since inception, the return has been 7.8 per cent, outperforming the index by 1.4 per cent net of fees. The Fund paid its first dividend in 2014 at US$ 2.25 per unit.
Launched in April 2013 as the first of its kind to be managed by a Bahrain-based bank, the SICO Fixed Income Fund " Expert Fund "actively invests in government and corporate fixed income, sukuk, repo, money market instruments, and other fixed income-related instruments. Its primary objective is to generate income and seek capital appreciation over the medium- to long-term.
Although registered as a conventional fund, Sharia-compliant holdings in the form of sukuk comprised 38 per cent of the portfolio at the end of 2014. The Sharia-compliant mandates managed by SICO on a discretionary basis have also outperformed their benchmarks.
During the year, SICO received approval from the Central Bank of Bahrain for the Fund to launch a new 'C' share class to cater for smaller ticket sizes. The new share class has a minimum subscription of US$ 10,000 for individual and institutional investors, compared with the previous minimum ticket size of US$ 100,000.
Commenting on the Fund's performance, SICO's chief executive officer Ms. Najla M. Al Shirawi said: "Our prudent investment style has enabled us to deliver another strong performance for our clients in 2014. SICO's success stems from its disciplined investment strategy, conservative approach, and the quality of its comprehensive research capability. These differentiating factors have supported the development of SICO into a leading and highly-respected institutionally-focused GCC and MENA public markets asset manager, providing investors with stable long-term returns that have consistently outperformed benchmarks and peers," Ms. Al Shirawi added.
With a growing product range, including advisory, discretionary management and non-discretionary services, SICO has developed into a full-fledged conventional and Sharia-compliant regional fixed income player. Its growing strength in this area stems from its in-house research capability, and its cost-effective, one-stop-shop service that provides end-to-end solutions for an increasing number of sukuk and fixed income investors.
According to Mr. Ali Marshad, Head of Fixed Income at SICO: "The Fund's performance is mainly attributable to our Bahrain-based exposure; as well as outside the GCC region in Turkey, which posted an encouraging performance during 2014. This was a challenging year for the fixed income market, with volatility intensifying during the last two months.
"SICO Fixed Income Fund has successfully navigated the ongoing volatile investment environment. Going forward, we will be looking to add floating rate bonds to our exposure; and capitalise on declining oil prices by taking exposures in those regions which are net beneficiaries," Mr. Marshad added.
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© Press Release 2015
