SICO’s equity funds deliver strong performance in 2009

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Securities & Investment Company (SICO) released today performance results for its four regional equity funds in 2009. Despite significant regional market turmoil caused by the global financial crisis, the funds continued to perform strongly. Significantly, the high ratings (‘AA’ and ‘A’) assigned to the Firm’s funds in 2008 by Standard & Poor’s, were re-affirmed by this leading international rating agency during the year.
 
SICO’s flagship Khaleej Equity Fund, rated ‘AA” by S&P, and which invests in equities listed on the six GCC stock markets, achieved a return of 16.9% for the year. The fund achieved one of the best risk-adjusted returns amongst its peer group over the medium-to-long term. For a five-year period the fund’s annualised return is 8.5% against  a negative 3.5% return of the MSCI GCC Index benchmark. This has been achieved despite having a significantly lower volatility than that of the benchmark. Khaleej Equity Fund was ranked ‘First’ in the GCC Equity Fund category by Zawya Funds Ranking during their latest quarterly review.

Also rated “AA” by S&P, the SICO Gulf Equity Fund invests in equities listed on the GCC stock markets excluding Saudi Arabia. In 2009, the Fund delivered a return of 12.9% while its MSCI GCC Ex-Saudi Index benchmark remained flat. The fund has one of the best risk-adjusted returns over a three-year period, with an annualised return of 2.4% against  a negative 10.5% return for the benchmark. SICO Gulf Equity Fund ranked ‘Second’ in the GCC Equity Fund category by Zawya Funds Ranking during their latest quarterly review, and was also recognised as the Best GCC Fund at the MENA Fund Managers Awards 2009.

The SICO Arab Financial Fund, rated “A” by S&P, which invests primarily in financial sector equities in the MENA region, grew by 14.8% in 2009 compared to its S&P GCC Financial Sector Index benchmark of 3.4%. The Fund was ‘Highly Commended’ for the Sector Fund of the Year category at the MENA Fund Managers Awards 2009.

The SICO Selected Securities Fund, also rated “A” by S&P, and investing principally in equities listed on the Bahrain Stock Exchange, delivered a negative return of 9.9% compared to its BSE All Share Index benchmark of  a negative 19.2%.  The fund’s annualised return over a 10 year period is 7.3% versus 1.4% for the benchmark.

SICO attributes this strong performance to its active asset allocation and superior stock picking capabilities. At the same time, SICO also 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 fundamentally strong, and that are trading at less than their fair values.  All fund’s have independent administrators and custodians who ensure that the fund records are accurate which adds credibility to the overall fund structure.

Commenting on these results, Anthony Mallis, Securities & Investment Company’s CEO, said: “SICO’s prudent investment approach, characterised by conservative asset allocation, has enabled the Firm to deliver another strong performance for our clients in 2009, despite significant market turmoil due to the ongoing financial crisis during the year.

“We believe the GCC and MENA regions offer the potential for superior returns for investors during 2010, 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 returns for investors. These factors will continue to form the keystones of our investment approach, utilising highly selective stock-picking to deliver substantially higher than benchmark medium and long term returns to our clients, and which we have achieved during the past five years.” he added.