SICO’s funds benefited from the improved performance of GCC stock markets during the first six months of the year, with the S&P GCC index increasing by 9.4% for the period. The UAE’s bourses were the best performers, with investors regaining confidence in the improving underlying fundamentals of the Emirates. Dubai increased by 37% and Abu Dhabi by 35%, while all other GCC markets increased by around 10%.
SICO’s Khaleej Equity Fund, which invests in GCC-listed equities, gained 17.2% and significantly outperformed its benchmark’s return of 9.4%. The fund’s core holdings in Saudi consumer-related stocks and UAE equities contributed to its strong performance. Graded ‘Gold’ by Standard & Poor’s Capital IQ, the Khaleej Equity Fund is one of only two funds in the MENA region to have been awarded a ‘Five-year Long-term’ grading by S&P Capital IQ.
The SICO Gulf Equity Fund, which invests in GCC-listed equities but excluding Saudi Arabia, delivered a return of 20.7% compared with a 12.1% rise by its benchmark. Graded ‘Gold’ by S&P Capital IQ, the funds strong performance was due primarily to its large exposure to the UAE bourses and highly-selective stock selection from other GCC markets.
Graded ‘Silver’ by S&P Capital IQ, the SICO Kingdom Equity Fund, which invests primarily in Saudi-listed equities, delivered a return of 20.9% compared with a 10.2% increase by its benchmark. Selective stock picking from within the consumer space enabled the fund to post such a strong performance.
The SICO Selected Securities Fund, which invests principally in Bahrain-listed equity and debt securities, achieved a return of 11.1% in line with its benchmark. Graded ‘Silver’ by S&P Capital IQ, the fund has one of the longest track records in its asset class.
In addition to these equity funds, the SICO Money Market Fund recorded a rise of 0.43% compared with a 0.14% rise by its benchmark. Launched in May 2010, the fund invests in short term government and investment grade bonds and also places fixed deposits with regional banks.
Adding to the Bank’s diversified fund portfolio, the SICO Fixed Income Fund was launched during the second quarter of 2013. This new fund actively invests in government and corporate fixed income, sukuk, and other fixed income-related instruments. The objective of the fund is to generate income and seek capital appreciation over the medium- to long-term.
“SICO’s clear and disciplined investment process has enabled us to deliver another strong performance for our clients during the first half of 2013. The combination of our regional insight and quality of research is a key factor in enabling SICO to provide consistent and stable long-term returns to our investors,” Anthony Mallis, Securities & Investment Company’s CEO, said.
“Looking ahead, GCC equities are predicted to continue generating interesting returns for the rest of the year, as regional and international long-term investors are likely to deploy additional funds into our regional markets; thanks in no small way to the recent lackluster performance of emerging markets. Reversing the trend from 2009 to 2012, GCC markets are now outperforming emerging markets, which fell by 11% during the first half of the year,” Tony added.
With total assets under management increasing by 13.6% to BD 256.7 million (USD 681 million) at the end of June 2013, from BD 226 million (USD 599 million) at the end of 2012, SICO maintained its status as a leading institutionally-focused GCC public markets asset manager.