Jadwa Saudi Riyal Murabaha Fund

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1 Jadwa Saudi Riyal Murabaha Fund 2016 Annual Report A Saudi Closed Joint Stock Company (registration no , Licensed by the Capital Market Authority under the license number Head Office: Phone Fax P.O.Box 60677, Riyadh 11555, Saudi Arabia شركة مساهمة سعودية مقفلة )رقم السجل التجاري ( مرخصة من قبل هيئة السوق المالية بموجب ترخيص رقم اإلدارة العامة هاتف فاكس ص.ب الرياض المملكة العربية السعودية Jadwa Saudi Riyal Murabaha Fund Annual Report is available upon request free of charge and on 1

2 Contents Investment Fund Information... 3 Fund Manager s Commentary... 5 Fund Performance... 7 Fund Expenses... 8 Disclosures... 9 Annex A: Custodian Statement Annex B: Auditor Statement and Financial Statements Jadwa Saudi Riyal Murabaha Fund Annual Report is available upon request free of charge and on 2

3 Investment Fund Information Fund Name Jadwa Saudi Riyal Murabaha Fund Benchmark One month SIBID net of management fee Inception Date June 30, 2007G Investment Objective and Policies To generate competitive market returns from short-term Murabaha based trade transactions that are compliant with Shariah principles. The fund aims to provide capital preservation and easy liquidity to its unit holders. Jadwa Saudi Riyal Murabaha Fund s assets are invested in diversified low risk trade transactions with counterparties of good reputation and sound financial backing. The average duration of the Fund s portfolio does not exceed one year. Distribution of Income and Gain Policy Dividends and/or income are reinvested in the Fund and not paid out or distributed to investors. Fund Manager Jadwa Investment A Saudi Closed Joint Stock Company (registration no , Licensed by the Capital Market Authority under the license number Head Office: P.O. Box 60677, Riyadh 11555, Saudi Arabia. Phone Fax Fund Custodian Jadwa Investment A Saudi Closed Joint Stock Company (registration no , Licensed by the Capital Market Authority under the license number Head Office: P.O. Box 60677, Riyadh 11555, Saudi Arabia. Phone Fax The custodian is responsible for taking custody and protecting fund assets on behalf of all unitholders and for taking all required administrative measures in regards to the custody of the fund s assets. Jadwa Saudi Riyal Murabaha Fund Annual Report is available upon request free of charge and on 3

4 Fund Auditor KPMG Al Fozan PO BOX Al Riyadh Kingdom of Saudi Arabia As of December st Net Asset Value 31 Net Asset Value per Unit Ending Highest Lowest Number of Units Expense Ratio (%) ,344, , ,359,503, ,398, ,053,556, ,376, Jadwa Saudi Riyal Murabaha Fund Annual Report is available upon request free of charge and on 4

5 Fund Manager s Commentary At Jadwa Investment, we are committed to our research-driven, high conviction approach to investing, which we believe can generate above-average risk-adjusted returns for our clients. Our investment strategy is based on long term views founded upon economic and interest rate outlook was a challenging year in capital markets globally, characterized by high levels of uncertainty. Oil prices collapsed at the start of the year and then more than doubled as global economic activity stabilized, US oil production levels declined and major oil producing nations stepped up efforts to reach supply cut agreements. Given oil is a major source of revenue for Saudi Arabia, low and volatile oil price along with uncertainty related to government spending affected investors risk appetite. Moreover, delay in government payments and periodic issuance of local government debt squeezed money supply from the system. As a result, the first three quarters of the year were marked by rising interbank rates and declining valuations of local risk assets. Towards year end, however, the interbank rates normalized driven by substantial improvement in money supply (due to successful debut international government bond issuance and measures taken by SAMA to ease system liquidity) and stabilization of oil prices at relatively higher levels. Money market further eased with improvement in economic outlook due to announcements of 2017 Budget, NTP 2020 and Balanced Budget 2020 which highlighted key government measures to reform the economy, and brought clarity regarding future direction of government policies. Jadwa Saudi Riyal Murabaha Fund had a 2.46% cumulative return for 12 months ended 31 December, 2016 taking the Fund s total annualized return since inception (on 30 June 2007) to 1.30%. In comparison, the Fund s benchmark achieved a total return of 1.23% for the 12 month period ended 31 December, The benchmark s total annualized return since the Fund s inception reached 0.76%. For more details on performance please refer to the Fund Performance section. Jadwa Saudi Riyal Murabaha Fund Annual Report is available upon request free of charge and on 5

6 Allocation % of Net Assets 31-Dec-2015 % of Net Assets 31-Dec-2016 Murabaha 99.74% Murabaha 86.66% Cash 0.26% Cash 13.34% Total % Total % Top 3 Exposures Sector % of Net Assets 31-Dec-2015 Sector % of Net Assets 31-Dec-2016 SABB 14.72% Bank al Jazira 9.49% SABB 14.72% Bank al Jazira 9.49% GIB 14.71% Bank al Jazira 9.49% Jadwa Saudi Riyal Murabaha Fund Annual Report is available upon request free of charge and on 6

7 Fund Performance 1-Year 3-Year 5-Year Since Inception Fund 2.46% 1.22% 1.02% 1.30% Benchmark 1.23% 0.58% 0.58% 0.76% Annualized Returns Fund Benchmark % 3.87% % 2.09% % 0.36% % 0.15% % 0.14% % 0.27% % 0.31% % 0.18% % 0.33% Annualized Returns % 1.23% Jadwa Saudi Riyal Murabaha Fund Annual Report is available upon request free of charge and on 7

8 Fund Expenses Expenses for 2016 (SAR) Management Fees 7,813, Fund Board 17, Auditing Fees 20, Custodian's Fees - Legal Expenses - Cost of Sharia-compliant finance (when required) - Registration / Fees of Unit Processing - Other expenses 8, Total 7,858, Cost/Average Assets Ratio 0.34% Jadwa Saudi Riyal Murabaha Fund Annual Report is available upon request free of charge and on 8

9 Disclosures Material Changes The Fund s auditor changed from Deloitte to KPMG For additional information please refer to the Terms & Conditions available on Kindly refer to Annex A & B for custodian and auditor statements regarding the Fund. Fund Board Meeting Jadwa Head Office, Riyadh, 18 th December 2016 Discussion Topics Approval of minutes for previous meeting held on 22 nd June 2016 Compliance officer s review of funds compliance with laws and regulations MLRO s report on anti-money laundering activities Disclosures of investors with holdings greater than 5% of fund assets Economic and Market Outlook 2016 YTD performance review of the fund Fund Board s self-review: number of investment funds supervised Jadwa Head Office, Riyadh, 22nd June 2016 Discussion Topics Approval of Minutes of Meeting held on 20 December 2015 Approval of appointment of KPMG Al-Fozan & Partners as Fund Auditor for the Fund Considering proposal for custody and fund administration for Jadwa funds from HSBC Saudi Arabia Jadwa Saudi Riyal Murabaha Fund Annual Report is available upon request free of charge and on 9

10 Resolutions Appointing KPMG Al-Fozan & Partners as Fund Auditor of the Fund. Appointment of HSBC Saudi Arabia as 3 rd party sub-custodian and sub-administrator of Jadwa s public funds Authorizing the Fund Manager's Head of Asset Management to make decisions on behalf of the Fund. Additional Information to Unitholders Please refer to the Fund s Terms & Conditions. Jadwa Saudi Riyal Murabaha Fund Annual Report is available upon request free of charge and on 10

11 Annex A: Custodian Statement Jadwa Saudi Riyal Murabaha Fund Annual Report is available upon request free of charge and on 11

13 Annex B: Auditor Statement and Financial Statements Jadwa Saudi Riyal Murabaha Fund Annual Report is available upon request free of charge and on 13

27 Disclaimer: Jadwa Investment or its directors, staff, or affiliates makes no warranty, representation or undertaking whether expressed or implied, nor does it assume any legal liability, whether direct or indirect, or responsibility for the accuracy, completeness, or usefulness of any information that is contained in this material. It is not the intention of this material to be used or deemed as an advice, option or for any action that may take place in future. Unless otherwise stated, all information contained in this material shall not be reproduced, in whole or in part, without the specific written permission of Jadwa Investment. The content of this document is for information purposes only. Jadwa Investment does not hold itself out as providing legal, financial or other advice via this document. Investments in Jadwa's products are governed by their Terms and Conditions. Some products are exposed to foreign currencies and changes in currency exchange rates may have an adverse effect on the value and price. The product's value is subject to fluctuations and the investor may not receive the full amount that is originally invested. The information provided in this document may be changed at any time without prior notice. Past performance is not indicative of future returns. Jadwa Investment is authorized and regulated by the Capital Market Authority of Saudi Arabia.

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