Saudia (Global Saudia) announced Monday that Standard & Poor's (S&P) Fund Services has assigned an "A" fund management rating to the Global Saudi Equity Fund, the first time a Saudi Equities Fund is assigned such a highly recognized rating. The Global Saudi Equity Fund invests in stocks listed on the Saudi stock exchange and seeks to achieve long-term capital growth with predefined and controlled levels of risk. It aims to realize returns that exceed the average by benefiting from the expected economic growth in Saudi Arabia while maintaining a suitable level of diversification for fund assets and reduction of total risk by investing in different market sectors. The Fund was awarded an S&P "A" Fund Management rating after demonstrating high standards of quality based on its investment process and consistency of performance compared to its peers due to the Fund managers' sensible approach to portfolio construction, driven from the bottom up and incorporating a top-down/thematic overlay. Value screens, fundamental analysis and asset management research all help construct a focused portfolio of stocks where the managers feel intrinsic value is not recognized by the market. The managers are aware of the Fund's benchmark when constructing the portfolio, but are not constrained to it, leaving plenty of scope to add value through stock selection and asset allocation. Since its launch, the Global Saudi Equity Fund has consistently outperformed its benchmark and peers, with stock selection being the main driver. In 2010 the Fund achieved 15.2 percent returns compared to the benchmark return of 8.2 percent, outperforming the benchmark by more than 7 percent. Since the inception of the Fund in February 2009, the fund has achieved a return of 56.1 percent compared to the benchmark return of 38.2 percentoutperforming the benchmark by 17.9 percent. Standard & Poor's stated that the Fund's managers aim to outperform the benchmark index by 3 to 5 percent over five years with a focused portfolio of around 20 Saudi equities. The approach they follow is primarily bottom-up, although top-down factors are considered and can guide sector allocation.
