As we have seen recently, the outlook for regional equity markets is becoming increasingly optimistic in the wake of a fragile global economic recovery. The Saudi and the broader GCC's economies have managed to generate positive growth, thanks in part to oil prices remaining relatively elevated.
So far in 2012, stocks daily volume trading in the Saudi market has been at significantly higher levels compared to the previous three years. In fact, over the past few sessions, the daily value traded has been in excess of SR15bn with this reaching a 5 year high.
Furthermore, Saudi Arabia's share of GCC value traded has averaged around 70% over the past few years, however during the past few months; this has increased to around 90%. Real Estate, Petrochemical, Insurance and Telecoms account for much of this growth.
GCC Growth and Income Fund invests in high quality companies, operating in these sectors and beyond, which offer high cash flow and income visibility. Such companies have historically showed more resilience in down markets and large upside potential in recovering markets.
Further, our research showed that this strategy has the ability to generate higher total returns compared to the overall market. Thus, GCC Growth and Income Fund is structured to capitalize on the longer term merits of this theme by investing in companies with reliable dividend stream, high return on capital, consistent operating history, and favorable long term prospects. Furthermore, the fund aims to distribute dividend twice a year as a steady income stream for investors. In fact, the fund's next dividend distribution payment is scheduled early May - yet another reason making this fund so attractive.
We believe our strategy is working! Although the fund was launched in November 2011, it has generated a very robust return as of date, outperforming both its benchmark and the S&P GCC Shariah Index. For more information on return, please click here to view the fund's fact sheet.
For more details about this Fund please refer to the Fund's Terms and Conditions.