Dec 07 2011
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Shari'ah compliant funds of funds sector analysis
This week we analyze the Shari'ah compliant fund of funds sector, as compiled by Zawya Investor.
Although Zawya only covers Middle East-based funds, the sector is popular especially in Saudi Arabia, where 22 of the 24 funds listed are domiciled. The other two funds are from Kuwait and Bahrain respectively.
Marketed as an investment one-stop shop, multi-manager funds first came to light in the 1980s but became more prominent as an investment model in the 1990s. They are a very popular optionamongst both retail and institutional investors in the US and UK. The funds aredesigned to make an investor's life easier by bringing together a range of specialist managers into a single fund.
The funds we deal with this week arefunds of funds. Although the majority of funds covered have Saudi Arabia astheir focus (54.2%), there is also a lot of interest in global Shari'ahcompliant funds-of-funds (41.7%).
However, propping up the wrong end ofthe table was another Saudi Hollandi offering, the $0.7m Al Yusr Global Emerging Markets Equity fund, which returned -9.6% over three months and -18.3%YTD to November 30.
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