Saudi Arabia's economic fundamentals stay sound despite global economic uncertainties amid downturn and financial crisis that sent many a big company reeling. Zeyad Awad, head of Saudi Asset Management, Global Saudi Equity Fund, a conventional fund launched on Jan. 31, 2009, commenting on the strong performance of its fund, said the “Saudi stock market currently trades at attractive valuations and offers a strong potential for above-average returns over the long-run capitalizing on government foreign reserves, solid macroeconomic outlook and strong government support for the economy through various fiscal measures (particularly the expansion of spending on infrastructure projects).” In addition, the Saudi economy is set to strongly benefit from any recovery in international markets and the strengthening of oil prices, he added. He pointed out that investors should focus on the long-term fundamentals of the Saudi economy which remain very favorable. Carefully selected mutual funds should prove to be an effective means of investing in the Saudi market for the long term. In addition to solid research capability, professionally managed funds provide better diversification as their size and scale allow them to invest in a cautiously selected broad based portfolio of companies across various sectors with the objective of maximizing return and minimizing risk. He further said Saudi equities have witnessed annualized compounded returns exceeding 12 percent over the past 10 years despite the significant losses experienced in the Saudi market in the last several years. Awad said Global Saudi Equity Fund's “strong performance is attributable to the team's research driven investment approach and vast experience in managing equities in the Saudi market. Our value-oriented investment process has proven to be successful. Detailed analysis is conducted to identify attractive investment opportunities in an effort to outperform the market. The market volatility currently being witnessed has served to further reinforce the value of sound investment strategies followed by Global in the Saudi equity market and our commitment to long term investing.” Investing in equities for the long term has historically generated superior returns compared to other asset classes.” He said the Fund aims to achieving long-term capital growth with predefined and controlled levels of risk, by investing in stocks listed on the Saudi stock exchange. The Fund has recorded 24.8 percent since its inception till May 16, outperforming the Tadawul All Shares Index (TASI) by 2.2 percent. On the other hand, the Global Saudi Shariah- Compliant Equity Fund (Al-Noor) was launched on March 7, 2009 and invests in equities listed on the Saudi Stock Exchange that are Shariah compliant. The fund has recorded returns of 36 percent since its inception till May 16. There are 28 Shariah-compliant Saudi equity funds which are all listed on Tadawul website and managed by investment companies. __
