The Global GCC Large Cap Fund recorded a strong performance of 23.1% in the year 2010 becoming the best performing fund investing in the GCC according to Zawya’s database monitoring regional funds.
Following Qatar’s successful World Cup bid along with improving regional fundamentals underpinned by strong recovery in oil prices the previous year, the regional exchanges closed the year on a positive note with S&P GCC Large Cap Custom Capped Index returning 15.8% for the year. In comparison, the Global GCC Large Cap Fund returned 23.1% in 2010, recording significant outperformance to the benchmark.
The markets during the year were led by KWSE, DSM and TASI, which returned 25.5%, 24.8% and 7.8% respectively in 2010. With continuing weakness on the macro front in Dubai, DFM closed the year as the worst performing market returning negative 9.6% for the same period.
“We are pleased with the results the GCC Large Cap Fund has achieved," says Shahid Hameed (pictured), Head of GCC Asset Management at Global. "The fact that the fund was consistently ranked among the top performing GCC funds in the region throughout 2010 reflects our long-term commitment to our clients.”
The GCC Large Cap Fund seeks to achieve long-term capital appreciation by investing in a diversified portfolio of large cap stocks listed on the GCC stock exchanges. Global’s funds adhere to a well thought-out investment process based on a bottom-up stock selection methodology along with macroeconomic overlay to identify growth opportunities throughout the region. The fund invests in multiple sectors and growth/value categories.
“The regional markets have rebounded sharply since the Euro debt crises in May 2010, on the back of improving global backdrop, Fed’s Quantitative Easing (QE) measure and rising oil prices," says Hameed. "As of December end, the S&P GCC Large Cap Custom Capped Index was up 19% from its lows in May 2010. With Brent averaging USD85/bbl during 2010 well above the budget break-even level, the current oil price levels shall allow regional economies to continue with their expansionary policies.
"The region should continue to benefit from strong GDP growth, high government spending and favorable demographics in our view. In terms of asset allocation, Saudi and Qatar continue to remain our most preferred markets. We have strategically increased our exposure to Qatar following the country’s successful World Cup bid, which has further strengthened the country’s economic outlook. We have taken selective bets in Kuwait and Oman but continue to remain cautious on the outlook for UAE.”
