“SICO’s prudent investment approach, characterised by superior stock picking and asset allocation, has enabled the Firm to deliver another strong performance for our clients in 2010, despite significant market volatility,” Anthony Mallis, CEO, SICO said while commenting on the performance of funds.
“We believe the recent declines in the GCC and MENA markets offer a good entry point for long terms investors. The regional markets currently are significantly undervalued and offer attractive returns to long term investors, as we forecast in our recent GCC Market Overview research report. The combination of our regional insight and the quality of our research are key factors in enabling SICO to provide consistent and stable long term returns to our investors,” he said.
“In addition to this, our asset allocation and disciplined investment and risk management process has enabled us to preserve capital during downturns and periods of volatility. Our strong performance during downturns of 2006 and 2008 and periods of volatility has been one of the main contributors to our overall outperformance of market and other competing regional funds,” he added.
In latest report released on Sunday, the bank said that its regional equity funds yielded exceedingly well in 2010.
“Despite substantial volatility during the year, the funds continued performing strongly. Significantly, the high ratings (‘AA’ and ‘A’) assigned to the SICO’s funds by Standard & Poor’s, were re-affirmed by the leading international rating agency,” the report said.
“SICO’s flagship, the Khaleej Equity Fund – rated ‘AA” by S&P, and which invests in equities listed on the six GCC stock markets – achieved a return of 14.1% for the year, against a 12.8% appreciation in its benchmark, the S&P GCC Composite Index. The fund achieved one of the best risk-adjusted returns among its peer group over the medium-to-long term. Since the fund’s inception in March 2004, the fund’s annualized return is 12.2% against a 4.6% return for the benchmark. This has been achieved despite having a significantly lower volatility than that of the S&P GCC Composite Index. The Khaleej Equity Fund was also ranked ‘First’ in the GCC Equity Fund category by Zawya Funds Ranking during their latest quarterly review,” it added.
The SICO Gulf Equity Fund, also rated “AA” by S&P, invests in GCC listed equities although it excludes Saudi Arabia, delivered a return of 11.6% for 2010. The fund has one of the best risk-adjusted returns since its inception in March 2006, with an annualised return of 2.2% against a negative 10% return for its benchmark, the S&P GCC ex Saudi Index. SICO Gulf Equity Fund ranked ‘Second’ in the GCC Equity Fund category by Zawya Funds Ranking during its latest quarterly review.
The SICO Arab Financial Fund, rated “A” by S&P, invests primarily in MENA region financial sector equities, appreciated by 25.2% in 2010 compared to 9.6% increase in its benchmark, S&P GCC Financial Sector Index. The fund completed its third year in 2010. Since its inception in Aug 2007, the fund’s annualized return is 5.9% against a negative 10.2% benchmark return. At the MENA Fund Managers Awards 2010, the fund was rated the best MENA Equity Fund of the year and was also recognized as the Best Specialist Fund of the Year.
The SICO Selected Securities Fund, also rated “A” by S&P, and investing principally in Bahrain Bourse listed equities, delivered a return of 4.8% compared to a negative 1.8% return for its benchmark, BSE All Share Index. The fund’s annualised return since inception (May 1998) is 6.2% versus 1.0% for the benchmark.
SICO credits this strong performance to its active asset allocation and stock picking capabilities. The firm in parallel adopts a top down approach to risk management by closely monitoring company, country and sector exposures. The buy side research team, along with the portfolio managers, focus on identifying companies that are undervalued and fundamentally strong.
All funds’ have independent administrators and custodians, ensuring that their records are accurate, adding credibility to the overall fund structure.