Imran Ahmed, managing director, asset management, Mashreq, talks about the Makaseb Arab Tigers Fund.
What is the name of your fund?
Makaseb Arab Tigers Fund.
The Total Expense Ratio is carefully monitored, to ensure that it is kept competitive.
When was it launched, and what has been its performance to date?
The Makaseb Arab Tigers Fund was launched in November 22, 2005. The fund has outperformed its benchmark MSCI Arabian by 32.6% in 2006 and its performance in 2007 to date is 17.2% (in absolute terms).
Is it focused on any particular industries, markets or geographical regions?
It is focused on large to mid-cap companies listed on the stock exchanges of the Middle East and North Africa region. It employs a bottom-up approach where the focus is on quantitative (organic growth, quality of earnings, valuation screens), and qualitative (franchise strength, scarcity value, quantity of disclosure) factors. The equity markets targeted by MATF include Saudi Arabia, UAE, Kuwait, Qatar, Egypt, Jordan, Morocco, Oman, Bahrain, Lebanon and Tunisia.
Is it part of a family of funds?
Makaseb Arab Tigers Fund is a part of the Makaseb Funds family. The Makaseb fund family includes Makaseb Emirates Equity Fund, Makaseb Emirates Opportunity Fund, Makaseb Kuwait Equity Fund, Makaseb Qatar Equity Fund, and the Makaseb Income Fund. The Makaseb funds are sponsored by the largest privately owned commercial bank based in the UAE, Mashreq. Mashreq has inculcated a ‘fiduciary culture’ within the Asset Management team. This culture ensures greater transparency, and the Asset Management team is held accountable to the highest global industry standards.
Where is the fund domiciled, and why?
The fund is domiciled in Bahrain and is regulated by the Central Bank of Bahrain (CBB). The CBB is regarded as a regulator of international standards and has a long history within the GCC region. The CBB has a world-class regulatory system that ensures Bahrain’s financial institutions operate on equal standards to those in place in major international financial centres. The Collective Investment Undertakings provides a clear framework for the operation of mutual funds and ensures investor interests are protected.
If it uses an external administrator or custodian, who are they?
The fund uses Gulf Investment Corporation (GIC) as an external administrator & custodian. GIC is a leading financial institution considered amongst the best in the Gulf Cooperation Council (GCC) region. GIC is an entity owned by the government of six member states of the Gulf Cooperation Council (GCC): Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE. GIC was assigned an ‘A’ rating from Fitch Ratings in September 2006.
What is the benchmark for the fund, and how has it performed in comparison?
The MSCI Arabian Index is used as a benchmark for the fund. Since its inception the fund has had a return of -0.8%. During the first seven months of 2007, MATF earned a return of 17.2%, and has outperformed its benchmark by 32% since inception.
What is the minimum subscription, and whom does the fund target?
The minimum subscription amount is US$10,000. Despite having characteristics and structure of an institutional investment vehicle the fund is ideal for both institutional and retail investors.
When can investors enter or exit?
There are two dealings days per week, i.e. Monday and Thursday. It is fair to state here, that most regional funds have a monthly redemption cycle.
What management fees are payable?
The management fees are 2% p.a. of the NAV of the Fund. The Total Expense Ratio is carefully monitored, to ensure that it is kept competitive. All returns are stated net of fees.
What advantages does your fund have over other similar funds available?
MATF is a unique “one stop” investment vehicle designed to provide access to the dynamic and growing regional economies. It has a very low co-relation with other emerging and developed markets and can act as a good diversifier especially in times of stress in the global markets. Through its geographical distribution across several countries, it has been able to control individual market and portfolio risk, while still benefiting from the returns associated with a concentrated stock portfolio. This is evident from the fund’s significant out performance of -8.19% in 2006, during a period of significant equity market turmoil when the regional markets were down by 40.7%.
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