In this, the second week of our new data and analysis section, we turn our attention to the world of Islamic fund management by starting our fortnightly review with the output from Zawya Investor's Funds Monitor service.
This week we kick-off with a look at the GCC Equity Fund sector. We decided to look at all the Middle East-based, Shari'ah compliant funds currently monitored by the service that have a mandate to invest in the equity markets of the six GCC nations.
In this segment there are 28 funds with the most popular domicile being Saudi Arabia with 13 funds, followed by Bahrain with six funds. Kuwait boasts five funds while the UAE and Qatar have two each.
The funds range from fairly chunky [for the MENA region] funds like the $93.2m Al Rajhi GCC Equity fund down to the tiny $0.5m Akar fund, both from Saudi Arabia.
It has, according to the data compiled, been a bad year for GCC Equity investors, with nearly all the funds analysed offering negative returns over the last three months and since the beginning of the year. In fact, the only fund that offered a positive return of any kind over the year-to-date was the $7.2m Al-Qasr GCC Real Estate And Construction Equity Trading fund managed by Saudi Fransi, which offered a +2.38% return. It also offered investors a +6.99% return over the last three months, surpassing the only other two positive returns by the Al Rajhi GCC Equity fund (+1.64%) and the $7m Jadwa GCC Equity fund (+1.41%).
The success of the Al-Qasr fund has reflected investment trend in the GCC region that has seen investors eschew equity investment for aggressive property investment, according to a recent survey by investment manger Invesco.
The survey of 108 investment managers found that equity managers were finding slim pickings among wealthy nationals from Gulf states. Gulf nationals were most likely to invest in property, which accounted for 87% of total portfolio values, according to Invesco.
Gulf nationals were also more likely to be short-term investors, with investment horizons of two years compared with six to seven years for western investors. Investors from the Gulf and India sought the highest target returns of 11%, compared to lower target returns of 7% for western expatriates.
Next week: Bahrain domiciled (excl-sovereign) Sukuk
The Islamic Globe 2011
